Scrutiny of Record for Audit Purpose
while vouching, how will the auditor ensure himself that all credit sales transactions have been recorded by the entity
examining cutoff points
matching entries in the sales book against renumbered sales invoices and goods outward notes
counting the number of invoices and matching the number with entries on sales book
both (a) and (b)
both (a) and (b)
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Which of the following statement is not true regard to auditor’s attendance at stock takingA. auditor should attend physical stock taking only if inventory is material
B. auditor may not attend physical verification of stock by management, if he does not find it Appropriate to rely on it
C. if inventory is material, even when the auditor is not placing reliance on the physical Verification by the management, he should attend it
D. the primary objective of an auditor’s observation of an entity’s observation of an entity’s Stock take is to obtain direct knowledge that the stock and has been property counted
While vouching wages, auditor should examine whether there is proper segregation of duties. Which of the following activities should not be done by same department
A. maintaining personnel records and approving changing in wages rates
B. proposing pay roll summary and disbursement of wages
C. making salary statements and filing tax returns
D. comparing time clock records with time reports prepared by supervisors and preparing List of workers employed along with the units of production for each one of them
While observing a client’s annual physical inventory, an auditor conducted test counts for certain test counts were higher than the recorded quantities in the client’s perpetual records. This situation could be the result of the client’s failure to record
A. purchase returns
B. sales returns
C. goods with consignor
D. purchase discounts
In order to vouch, which of the expenses, the auditor will examine bill of entry
A. custom
B. excise duties
C. sales tax
D. income tax
the balance of cash in often between one to five percent of total assets. Tick the most appropriate statement with regard to verification of cash in context of this
A. cash in always material as materiality is qualitative concept
B. no audit of cash is needed when, in auditor’s opinion, cash is immaterial. Materiality is a Relative concept
C. the cash balance need only be audited if the balance is in overdraft
D. cash is to be verified if control risk is assessed as high
The auditor has noticed existence of recurring losses sales of fixed assets this indicates
A. depreciation charges are insufficient
B. policy of sale or disposal of fixed assets needs to be reviewed
C. the sale of assets has not been properly authorized
D. accounting errors
Which of the following financial statements assertions are addressed by testing the cutoff of plant asset addition?
A. Existence and ownership
B. Valuation and disclosure
C. Possession and ownership
D. Completeness and valuation
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