If the client's internal control for recording sales returns and allowances is evaluated as ineffective:
Which of the following is likely to be determined first when performing tests of details for accounts receivable?
Because of its central role in auditing of accounts receivable, which of the following would normally be one of the first items tested?
The understatement of sales and accounts receivable is best uncovered by:
For most audits, a proper cash receipts cutoff is less important than the sales cutoff because the improper cutoff of cash:
When designing tests of details of balances, an important point to remember is:
An auditor selects a sample from the file of shipping documents to determine whether invoices were prepared. This test is to satisfy the audit objective of:
The audit procedure that provides the auditor with the most appropriate evidence when performing test of details of balances for accounts receivable is:
When do most companies record sales returns and allowances?
Which of the following most likely would be detected by a review of a client's sales cutoff?
A listing of the balances in the accounts receivable master file at the balance sheet date, by total balance outstanding and by the amount of time the component parts have been outstanding, is the:
Cutoff misstatements occur:
A positive confirmation is more reliable evidence than a negative confirmation because:
Which of the following audit procedure would normally be included in the audit plan when auditing the allowance for doubtful accounts?
Communication addressed to the debtor requesting him or her to confirm whether the balance as stated on the communication is correct or incorrect is a:
You are auditing Nelson and Company and determined that the sample results support a conclusion that the account is materially misstated, when in fact it was not misstated. This illustrates the risk of:
If acceptable audit risk is increased, acceptable risk of incorrect acceptance should be:
The most commonly used method of statistical sampling for tests of details of balances is:
If an auditor desires a greater level of assurance in auditing a balance, the acceptable risk of incorrect acceptance:
Which of the following is not a type of statistical method that provides results in dollar terms?
If an auditor concludes that internal controls are likely to be effective, the preliminary assessment of control risk can be reduced, leading to which of the following impacts on the acceptable risk of incorrect acceptance?
One of the steps involved in planning the sample for the tests of details of balances is to:
The word below that best explains the relationship between required sample size and the acceptable risk of incorrect acceptance is:
If the population is not considered acceptable, one step the auditor is likely to take is to:
The appropriate assumption to make regarding the overall percent of error in those population items containing an error is:
The final step in the evaluation of the audit results is the decision to:
The allowance for sampling risk when no misstatements are found in the sample is:
The method used to measure the estimated total error amount in a population when there is both a recorded value and an audited value for each item in the sample is:
The auditor is concerned with the audited value rather than the error amount of each item in the sample when using:
As the amount of misstatements expected in the population approaches tolerable misstatement, the planned sample size will: