1.The auditor will most likely perform extensive tests for possible understatement of
a.Revenue
b.Assets
c.Liabilities
d.Equity
2.In auditing accounts payable, an auditor’s procedures most likely will focus primarily
on management’s assertion of
a.Existence
b. Completeness
c.Presentation and disclosure
d.Valuation and allocation
3.Which of the following audit procedures is not appropriate for addressing the
assertion of valuation?
a.Confirm with creditors
b.Test for unrecorded liabilities
c.Perform analytical procedures
d. Verify accounts payable trial balance
4.Which of the following is a substantive test that an auditor an auditor most likely
would perform to verify the existence and valuation of recorded accounts payable?
a.Vouching selected entries in the accounts payable subsidiary ledger to purchase
orders and receiving reports.
b.Confirming accounts payable balances with known suppliers who have zero
balances.
c.Investigating the open purchase order file to ascertain that prenumbered purchase
orders are used and accounted for
d.Receiving the client’s mail, unopened, for a reasonable period of time after the year-
end to search for unrecorded vendor’s invoices
5.Auditor confirmation of accounts payable balances at the balance sheet date may be
unnecessary because:
a.This is a duplication of cutoff tests
b.Accounts payable balances at the balance sheet date may not be paid before the audit
is completed
c.Correspondence with the audit client's attorney will reveal all legal action by vendors
for nonpayment
d.There is likely to be other reliable external evidence available to support the balances
6. To identify whether accounts payable are complete, an auditor performs a test to verify
that all merchandise received is recorded. The population of documents for this test
consists of all
a.Payment vouchers
b.Receiving reports
c. Purchase requisitions
d.Vendors’ invoices
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Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?
A. Vouch a sample of accounts payable entries recorded just before year-end to the unmatched receiving report file.
B. Compare a sample of purchase orders issued just after
year-end with the year-end accounts payable trial balance.
C. Vouch a sample of cash disbursements recorded just after year-end to receiving reports and vendor invoices.
D. Scan the cash disbursements entries recorded just before year-end for indications of unusual transactions.
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