Question 1

Discuss the procedures involved in, and the purpose of, a surprise payroll audit.

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Question 2

State each of the six specific transaction-related audit objectives for acquisitions, and, for each objective, describe one common substantive test of transactions.

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Question 3

State five specific balance-related audit objectives for physical inventory observation, and, for each objective, describe one common test of details of balances related to that objective.

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Question 4

The basis for the auditor's verification of inventory pricing and compilation is the substantive testing performed in that area.What is the purpose of each group of tests?

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Question 5

State each of the eight specific balance-related audit objectives for accounts payable, and, for each objective, describe one common test of details of balances.

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Question 6

Discuss the key documents used in the processing of purchase orders and receiving goods and services functions in the acquisitions and payment cycle.

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Question 7

Identify three analytical procedures commonly used when auditing accounts in the inventory and warehousing cycle.

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Question 8

State five specific balance-related audit objectives for inventory pricing and compilation, and, for each objective, describe one common test of details of balances related to that objective.

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Question 9

Discuss each of the four business functions in a typical payroll and personnel cycle.

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Question 10

Describe the audit procedures typically used to test for out-of-period liabilities (also referred to as the search for unrecorded accounts payable).

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Question 11

Discuss each of the primary documents and records used in the personnel and employment function in the payroll and personnel cycle.

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Question 12

Identify the analytical procedures for the payroll and personnel cycle to test for possible misstatements.

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Question 13

Discuss the two most common ways in which employees can defraud a company in the payroll area.

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Question 14

State each of the six specific transaction-related audit objectives for cash payments, and, for each objective, describe one common substantive test of transactions.

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Question 15

Discuss the four aspects of the audit of cost accounting with which the auditor is most concerned.

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Question 16

State the six specific transactions-related audit objectives as related to payroll, and, for each objective, state one common substantive test of transactions that can be used to test the objective.

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Question 17

Describe the methodology for designing tests of details of balances for accounts payable.

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Question 18

Match between columns
                        Premises: a document that specifies the details of an acquisition transaction and amount of money owed to the vendor for an acquisition
a document indicating a reduction in the amount owed to a vendor because of returned goods or an allowance granted
a document used to establish a formal means of recording and controlling acquisitions, including a cover sheet and a package of relevant documents
a listing of the amount owed to each vendor at a point in time
a document prepared by the purchasing department indicating the description, quantity, and related information for goods and services that the company intends to purchase

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Quiz 15: Audit of transaction cycles and financial statement balances I