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For proper controls over accounts payable, who should match and compare the purchase order and the receiving report? Purchasing Receiving Shipping Store manager

For the risk of duplicate recording of purchases, what is the most likely internal control weakness? Inadequate segregation of duties in accounts payable Inadequate training for accounts payable employees Ineffective controls for matching disbursement documents Ineffective controls for review of supporting documents

Which audit assertion is met when testing repair and maintenance accounts associated with PP&E? Allocation Completeness Existence Presentation

For the risk of recording unearned revenue, what is the most likely internal control weakness? Ineffective controls for testing billing information Ineffective input validation checks on shipping dates Ineffective processes in the receiving department Ineffective shipping department cutoff policy

For the risk of erroneous timing recognition of inventory purchases, what is the most likely internal control weakness? Ineffective accounting procedures for reconciliation Ineffective physical controls over inventory Ineffective segregation in receiving Ineffective technology for inventory counts

For the risk of inaccurate recording of disbursements, what is the most likely internal control weakness? Inadequate segregation of duties in accounts payable Inadequate training for accounts payable employees Ineffective controls for matching shipping documents Ineffective controls for review of supporting documents

When auditing unclaimed wages, what is the auditor least likely trying to verify? Debits equal only authorized employee payments Debits equal transfers back to general funds Credits equal all unclaimed wages Credits equal required state payments

For proper controls over purchasing, which condition is optional for issuing a purchase order? Determining that the item is necessary Obtaining competitive bids Obtaining financial department approval Proving the item has consumer demand

For proper controls over accounts payable, who should prepare and approve a purchase requisition? Purchasing Receiving Shipping Store manager

Which of the following risks is inapplicable in evaluating the effectiveness of confirmations? Risk of nonresponse on erroneous accounts Risk of inaccuracy or inattention Risk of differences and exceptions Risk of omitting erroneous balances for testing

For the risk of failing to record cash sales, what is the most likely internal control weakness? Inadequate cash register security Inadequate security of deposits Ineffective segregation of duties Ineffective register tape reconciliation

Which audit assertion is met when testing credit approval on sales before shipment? Completeness Existence Presentation Rights

Which of the following items would an auditor test using the methods for verifying accrued liabilities? Commissions Customer deposits Federal income tax Unclaimed wages

Which audit assertion is met when performing cash audit tests that reconcile cash balances to the general ledger? Completeness Existence Presentation Rights

For proper internal controls over issuing merchandise, who should maintain perpetual inventory records of finished goods? Accountant Inventory manager Storekeeper Warehouse manager

In which situation would a positive confirmation be used to test the validity of a client's assets? Large number of small balances Low exception rate expected Low risk of material misstatement Small volume of large balances

Which of the following internal controls helps ensure all cash receipts received are accounted for and deposited by the company? Batch total Control listing Data interchange Voucher system

Which audit assertion is met when testing prenumbered shipping and billing documents? Completeness Existence Rights Valuation

Which audit assertion is met when testing for unrecorded accounts payable? Cutoff Existence Occurrence Valuation

How is goodwill valued on an annual basis? Amortized per schedule Depreciated per schedule Tested for impairment Value remains unchanged

What type of intangible asset describes when the price paid in acquisition exceeds the fair value of the net assets acquired? Franchise Goodwill Leasehold Trademark

Which step in calculating the overall reasonableness test for annual depreciation is incorrect? Add one-half of the asset additions. Add one-half of the salvage values. Deduct all fully depreciated assets. Subtract one-half of the asset retirements.

For proper controls over inventory conversion, which document is generated to authorize creation of specific products? Job ticket Materials requisition ticket Production order Purchase order

When a customer does not respond to a positive confirmation request, which auditor response would be incorrect? Apply alternative procedures to accounts No action if enough other responses were received Send additional confirmations on similar accounts Send second or third confirmation requests

For proper controls over PP&E, what should be in place for acquiring new capital assets? Board authorization Capital expenditure forms Capital revenue forms Capital work orders

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