Why is it more important to search for unrecorded notes payablethan for unrecorded notes receivable? Suggest audit procedures that the auditor can useto uncover unrecorded notes payable.
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Why is it more important to search for unrecorded notes payable
than for unrecorded notes receivable? Suggest
to uncover unrecorded notes payable.
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- What are the risks associated with auditing accounts payable? Can you explain the process of auditing accounts payable using confirmations.Confirmations of bank accounts may help the auditor to determine if material amounts of accounts receivable have been sold to the bank on a recourse basis. True FalseIt is common practice to audit the balance in notes payable inconjunction with the audit of interest expense and interest payable. Explain theadvantages of this approach.
- To gather audit evidence related to accounts receivable, the client should mail the confirmation requests. TRUE OR FALSE? WHY?What is the process of confirming accounts receivable balances. Why is it important for auditors to understand revenue recognition rules?Which internal controls should the auditor be most concernedabout in the audit of notes payable? Explain the importance of each.
- Which of the following tests of details most likely would help an auditor determine whether accounts payable have been misstated?a. Examining reported purchase returns that appear too low. b. Examining vendor statements for amounts not reported as purchases. c. Searching for customer-returned goods that were not reported as returns. d. Reviewing bank transfers recorded as cash received from customers.Which type of evidence is considered more reliable and relevant by the auditor? accounts receivable confirmation O minutes from management meetings O internally generated evidence O copy of cash receiptHow can fraud be detected in the financial statements?
- if the auditor want to assure that Receivables have not been sold. What assertion he or she want to test : Select one: a. Existence b. Completeness c. Rights and obligations d. Valuation and allocation1. Which of the following may be considered to be primary objective of the auditor in the examination of accounts receivables? a. Determine the approximate time of collectability of receivables b. Determine the relationship of receivables to sales c. Determine the reasonableness of the sales figure d. Establish validity and collectability of receivables 2. In determining the validity of accounts receivable, which of the following would the auditor consider most reliable? a. Direct telephone communication between the auditor and debtor b. Confirmation replies received directly from customers c. Credits to accounts receivable from the cash receipts book after the close of business at year end d. Documentary evidence that supports the accounts receivable balance 3. An auditor should perform alternative procedures to substantiate the existence of accounts receivable when a. Pledging of the receivables is probable b. No reply to a negative confirmation request is received c. No reply to a…MULTIPLE CHOICE: 1. Which of the following may be considered to be a primary objective of the auditor in the examination of accounts receivable? A. Establish validity and collectability of receivables B. Determine the approximate time of collectability of receivables C. Determine the relationship of receivables to sales D. Determine the reasonableness of the sales amount 2. Which of the following is not a procedure used by an auditor in the examination of accounts receivable? A. Confirmation B. Reconciliation C. Inquiry D. Physical count and inspection 3. In determining validity of accounts receivable, which of the following would the auditor consider most reliable ? A. Direct telephone communication between the auditor and debtor B. Confirmation replies received directly from customers C. Credits to accounts receivable from the cash receipts book after the close of business at year end D. Documentary evidence that supports the accounts receivable balance 4. Which of the following…