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1. Which of the following controls will most likely justify a reduced assessed level of control risk for the existence assertion for equipment?
a. Internal auditors periodically select equipment items in the fixed assets master file and locate the related equipment on company premises.
b. Department heads are asked to provide information to the accounting department each quarter about any equipment no longer in use or somewhat damaged
c. All contracts of equipment purchases are reviewed by both the controller and attorney to verify that legal title transfers to the client and that none represent operating leases
d. As part of quarterly and annual inventory physical counts, factory equipment is listed and subsequently reconciled to the fixed asset master file.
1. Equipment acquisitions that are misclassified as maintenance expense most likely would be detected by an internal control that provides for
a. Segregation of duties of employees in the accounts payable department
b. Authorization by the board of directors of significant equipment acquisitions
c. Investigations of variances within a formal budgeting system
d. Independent verification of invoices for disbursements recorded as equipment acquisitions
1. Which of the following controls will most likely justify a reduced assessed level of control risk for the existence assertion related to the equipment account?
a. As purchases of equipment are recorded in the purchases journal, the system automatically posts the item to the equipment master file
b. Internal auditors physically examine equipment on a periodic basis and verify that the equipment is included in the equipment master file
c. All additions to the equipment account must be supported by a valid receiving report
d. Assignment of general ledger account coding is reviewed by the accounts payable supervisor as purchases are recorded in the purchases journal
1. Which of the following comparisons will be most useful to an auditor in auditing an entity’s income and expense accounts
a. Prior year accounts payable to current year accounts payable
b. Prior year payroll expense to budgeted current year payroll expense
c. Current year revenue to budgeted current year revenue
d. Current year warranty expense to current year contingent liabilities
1. The controller of Excello Manufacturing, Inc., wants to use analytical procedures to identify the possible existence of idle equipment or the possibility that equipment has been disposed of without having been written off. Which of the following ratios will best accomplish this objective?
a. Depreciation expense/book value of manufacturing equipment
b. Accumulated depreciation/book value of manufacturing equipment
c. Repairs and maintenance cost/direct labor costs
d. Gross manufacturing equipment cost/units produced
1. Which of the following analytical procedures might suggest that certain repairs and maintenance expenses have been inappropriately capitalized?
a. The ratio of additions to equipment divided by the beginning balance in the equipment account is significantly lower than the same ratio from the prior three years.
b. The balance in the repairs and maintenance expense account is noticeably lower than amounts recorded in the past several years
c. The balance in the gross equipment account has decreased this year compared to the prior year
d. The ratio of depreciation expense divided by gross equipment is higher in the current year compared to prior years
1. In testing for unrecorded disposals of equipment, an auditor most likely will
a. Select items of equipment from the accounting records and then locate them during the plant tour
b. Compare depreciation journal entries with similar prior year entries in search of fully depreciated equipment
c. Inspect items of equipment observed during the plant tour and then trace them to the equipment master file
d. Scan the general journal for unusual equipment additions and excessive debits to repairs and maintenance expense
1. When there are numerous property and equipment transactions during the year, an auditor who plans to assess control risk at a low level usually performs
a. Analytical procedures for property and equipment balances at the end of the year
b. Analytical procedures for current year property and equipment transactions
c. Tests of controls and limited tests of current year property and equipment transactions
d. Tests of controls and extensive tests of property and equipment balances at the end of the year
1. In connection with the audit of the prepaid insurance account, which of the following procedures is usually not performed by the auditor?
a. Recomputed the portion of the premium that expired during the year
b. Prepare excerpts of the insurance policies for audit documentation
c. Confirm premium rates with an independent insurance broker
d. Examine support for premium payments
1. The auditor may note that annual depreciation expense is too low for a class of assets by noting
a. Insured values greatly in excess of carrying amounts
b. Large numbers of fully depreciated assets are still in sue
c. Continuous trade-ins of relatively new assets
d. Excessive recurring losses on assets retired
1. An auditor’s principal objective in analyzing repairs and maintenance expense accounts is to
a. Determine that all obsolete property, plant, and equipment assets were written off before the year end
b. Verify that all recorded property, plant, and equipment assets actually exists
c. Discover expenditures that were expensed but should have been capitalized
d. Identify property, plant, and equipment assets that cannot be repaired and should be written off
1. Before expressing an opinion concerning the audit of income and expenses, the auditors will best proceed with the audit of the income statement by
a. Applying a rigid measurement standard designed to test for understatement of net income
b. Analyzing the beginning and ending balance sheet inventory amounts
c. Making net income comparisons to published industry trends and ratios
d. Auditing income statement accounts concurrently with the related balance sheet accounts
1. Which of the following controls will most likely justify a reduced assessed level of control risk for the occurrence assertion for purchases of inventory?
a. Receiving reports for inventory additions are account for and entry of received goods into the purchases system is verified by accounting clerks
b. The purchases system automatically updates the perpetual inventory master file when transactions are entered into the purchases journal.
c. The perpetual inventory system will not allow an addition of inventory to be posted without entry of a valid receiving report number.At the close of each day, the system reconciles the perpetual inventory master file to the inventory general ledger account and generates an exception report when differences exist
1. For control purposes, the quantities of materials ordered may be omitted from the copy of the purchase order that is
a. Returned to the requisitioned
b. Forwarded to the receiving department
c. Forwarded to the accounting department
d. Retained in the purchasing department’s files
1. Which of the following procedures will best detect the theft of valuable items from an inventory that consists of hundreds of different items selling for $1-$10 and a few items selling for hundreds of dollars?
a. Maintain a perpetual inventory master file of only the more valuable items with frequent periodic valuation of the validity of the perpetuals.
b. Have an independent CPA firm prepare an internal control report on the effectiveness of the administrative and accounting controls over inventory
c. Have separate warehouse space for the more valuable items with sequentially numbered tags
d. Require an authorized officer’s signature on all requisitions for the more valuable items
1. Which of the following internal control procedures most likely would be used to maintain accurate inventory records?
a. Perpetual inventory records are periodically compared with the current cost of individual inventory items
b. A just-in-time inventory ordering system keeps inventory levels to a desired minimum
c. Requisitions, receiving reports, and purchase orders are independently matched before payment is approvedPeriodic inventory counts are used to adjust the perpetual inventory records
1. When an auditor tests a client’s cost accounting records, the auditor’s tests are primarily designed to determine that
a. Costs have been correctly assigned to finished goods, work in process, and costs of goods sold
b. Quantities on hand have been computed based on acceptable cost accounting techniques that reasonably approximate actual quantities on hand
c. Physical inventories are in substantial agreement with book inventoriesThe internal controls are in accordance with accounting standards and are functioning as planned
1. Which of the following sets of duties related to inventory and warehousing causes the greatest concern about inadequate segregation of duties?
a. Individuals in charge of approving disbursements related to inventory purchases have “read-only” ability to view the list of vendors in the pre-approved vendor master file
b. Purchasing agents who arrange for shipment of raw materials from vendors are responsible for verifying actual receipt of the inventory items at the receiving dock
c. The receiving department has access to copies of the purchase orders that exclude information about quantities ordered
d. Accounts payable personnel have access to receiving reports and purchase orders in addition to vendor invoices for inventory purchases
1. An auditor selected items for test counts while observing a client’s physical inventory. The auditor traced the test counts to the client’s inventory listing. This procedure likely obtained evidence about which balance-related audit objective for inventory?
b. Rights and obligations
d. Realizable value
1. Which of the following procedures is the auditor least likely to perform on the actual date the physical inventory count is observed?
a. Examine inventory to make sure that it is tagged by client count teams
b. Watch for inventory items that are rust-or dust-covered or otherwise damaged
c. Observe client count teams to determine if they are conducting the physical inventory count in accordance with client policies and procedures
d. Examine documentation supporting the acquisition of highly material inventory items on hand at the count date
1. An inventory turnover analysis is useful to the auditor because it may detect
a. Inadequacies in inventory pricing
b. Methods of avoiding cyclical holding costs
c. The existence of obsolete merchandiseD. The optimum automatic reorder points
1. When auditors examine vendors’ statements or receive confirmations, there must be a reconciliation of the statement or confirmation with the
a. Accounts payable list
b. Vendors’ invoices
c. Purchase orders
d. Receiving reports
1. Vendors’ statements and vendors’ invoices are both relatively reliable evidence because they
a. Come directly to the auditor without being in the client’s possession
b. Original from a third party
c. Validate the effectiveness of the control system
d. Are compared to and reconciled with sales invoices
1. Which of the following audit procedures would be the most correct in determining the audit objective of existence for the equipment account in the fixed asset master file?
a. Examine vendor invoices and receiving reports
b. Review transactions near the balance sheet date
c. Recalculate vendor invoices
d. Examine vendor invoices for correct accounting treatment
1. The test of details of balances procedure to “examine vendors’ invoices of closely related accounts such as repairs to uncover items that should be property, plant, and equipment” satisfies the audit objective of:
b. Detail tie-in
1. Which of the following accounts would normally not be a part of the acquisition and payment cycle of prepaid insurance?
b. Insurance payable
c. Insurance expense
d. Prepaid insurance
1. When an auditor recomputes the unexpired portion of prepaid insurance, they are satisfying which audit objective?
c. Accuracy and detail tie-in
1. The inventory and warehousing cycle can be thought of as having two separate but closely related systems, one involving the actual physical flow of goods, and the other the:
a. Related costs
b. Storage of the goods
c. Internal control over those goods
d. Prevention of waste, obsolescence, and theft
1. Which of the following is a significant audit concern related to the transfer of inventory from one location to another?
a. Transfers represent efficient movement of assets
b. Transfers were properly transported
c. Transfers were properly planned
d. Recorded transfers occurred
1. Which one of the following analytical procedures would be most useful in alerting the auditor to the possibility of obsolete inventory?
a. Compare gross margin percentage with previous years’
b. Compare unit costs of inventory with previous years’
c. Compare inventory turnover ratio with previous years’
d. Compare current year manufacturing costs with previous years’
1. Boxes or other containers holding inventory should also be opened during test counts to determine the ___________ of the inventory.
b. Detail tie-in
d. Realizable value
1. Control risk is the risk that a material misstatement in an account will not be prevented or detected on a timely basis by the client’s internal controls. The best control to prevent or detect fictitious payroll transactions is to:
a. Use and account for prenumbered payroll checks
b. Obtain authorization from human resources for hiring, pay rate, job status and termination
c. Verify internally authorized pay rates, computations, and agreement with the payroll register
d. Conduct periodic independent bank reconciliations of the payroll bank account
1. A factory foreman at Steblecki Corporation discharged an hourly worker but did not notify the human resources department. The foreman then forged the worker’s signature on time cards and work tickets and, when giving out the checks, diverted the payroll checks drawn from the discharged worker to his own use. The most effective procedure for preventing this activity is to
a. Require written authorization for all employees added to or removed from the payroll
b. Have a paymaster who has no other payroll responsibility distribute the payroll checks
c. Have someone other than persons who prepare or distribute the payroll obtain custody of unclaimed payroll checks
d. From time to time, rotate person distributing the payroll
1. An auditor found that employee time records in one department are not properly approved by the supervisor. Which of the following could result?
a. Duplicate paychecks might be issued
b. The wrong hourly rate could be used to calculate gross pay
c. Employees might be paid for hours they did not work
d. Payroll checks might not be distributed to the appropriate employees
1. A common audit procedure in the audit of payroll transactions involves tracing selected items from the payroll journal to employee time cards that have been approved by supervisory personnel. This procedure is designed to provide evidence in support of the audit proposition that
a. Only proper employees worked and their pay was correctly computed
b. Jobs on which employees worked were charged with the appropriate labor cost
c. Internal controls over payroll disbursements are operating effectively
d. All employees worked the number of hours for which their pay was computed
1. In performing tests concerning the granting of stock options, an auditor should
a. Confirm the transaction with the Secretary of State in the state of incorporation
b. Verify the existence of option holders in the entity’s payroll records or stock ledgers
c. Determine that sufficient treasury stock is available to cover any new stock issued
d. Trace the authorization for the transaction to a vote of the board of directors
1. An auditor reviews the reconciliation of payroll tax forms that a client is responsible for filing to
a. Verify that payroll taxes are deducted from employees’ gross pay
b. Determine whether internal control activities are operating effectively
c. Uncover fictitious employees who are receiving payroll checks
d. Identify potential liabilities for unpaid payroll taxes
1. Which of the following would generally not be a component of the audit of the acquisition and payment cycle?
a. Adequacy of controls over acquisitions of long-lived assets
b. Tracing disposals of long-lived assets to the fixed asset master file
c. Re-performance of recorded depreciation expense
d. Determining the adequacy of the funds available for capital expenditures
1. You are auditing Manufacturing Company and testing the audit related objective of completeness for the equipment accounts. Which of the following audit procedures is most likely to achieve your objective?
a. Examine vendor invoices and receiving reports
b. Physically examine assets
c. Examine vendor invoices of closely related accounts such as repairs and maintenance
d. Trace individual acquisitions to the fixed asset master file
1. Which type of audit procedure would normally be sufficient for purposes of auditing prepaid expenses and deferred charges?
a. Tests of controls
b. Tests of transactions
c. Tests of details of balances
d. Analytical procedures
1. Handling the receipt of ordered goods is a part of the ________ cycle.
b. Acquisition and payment
d. Inventory and warehousing
1. From which of the following evidence-gathering audit procedures would an auditor obtain most assurance concerning the existence of inventories?
a. Observation of physical inventory counts
b. Written inventory representations from management
c. Confirmation of inventories in a public warehouse
d. Auditor’s re-computation of inventory extensions
1. A common inventory observation procedure is to be alert for items that are damaged, rust- or dust- covered, or located in inappropriate places. The balance-related audit objective being achieved by this procedure is:
d. Realizable value
1. When auditors observe the client counting inventory, they should be careful to do all of the following except:
a. Inquire about items that are likely to be obsolete or damaged
b. Calculate the unit cost of the inventory items
c. Discuss with management the reasons for excluding any material items
d. Observe the counting of the most significant items
1. Which department should be authorized to add and delete employees from the payroll or change pay rates and deductions?
a. The supervising department
b. The accounting department
c. The human resources department
d. The treasurer’s department
1. Which of the following best describes the systems of internal control for payroll for large companies?
a. Loosely structured but well controlled
b. Loosely structured and loosely controlled
c. Highly structured and well controlled
d. Highly structured but loosely controlled
1. Which of the following is a major balance-related audit objective in testing payroll liabilities?
a. Payroll tax expense is properly recorded
b. Transactions in the payroll and personnel cycle are recorded in the proper period
c. Accrual of salaries in the same as the amounts paid on the payroll tax returns
d. Time records are recorded by supervisors
1. The accounting system will not post a sales transaction to the sales journal without a valid bill of lading number. This control is most relevant to which transaction-related objective for sales?
d. Posting and summarization
1. The accounting system automatically obtains the unit price based on scans of bar codes for merchandise sold. This control is most relevant to which transaction related objective for sales?
d. Posting and summarization
1. Which of the following controls would be most effective in detecting a failure to record cash received from customers paying on their accounts?
a. A person in accounting reconciles the bank deposit to the cash receipts journal
b. Transactions recorded in the cash receipts journal are posted on a real-time basis to the accounts receivable master file
c. Monthly statements are sent to customers and any discrepancies are resolved by someone independent of cash handling and accounting
d. Deposits of cash received are made daily
1. Proper authorization of write-offs of uncollectible accounts should be approved in which of the following departments?
a. Accounts receivable
c. Accounts payableTreasurer
1. A manufacturing company received a substantial sales return in the last month of the year, but the credit memorandum for the return was not prepared until after the auditors had completed their testing. The returned merchandise was included in the physical inventory. What control could have prevented?
a. Receiving reports are prepared for all materials received and such reports are accounted for on a timely basis.
b. Aged trial balance of accounts receivable is prepared
c. Credit memoranda are pre-numbered and all numbers are accounted for
d. A reconciliation of the trial balance of customers’ accounts with the general ledger control is prepared periodically
1. Which of the following controls most likely will be effective in offsetting the tendency of sales personnel to maximize sales volume at the expense of high bad debt write-offs?
a. Employees responsible for authorizing sales and bad debt write-offs are denied access to cash
b. Employees involved in the credit-granting function are separated from the sales function
c. Shipping documents and sales invoices are matched by an employee who does not have the authority to write off bad debts
d. Subsidiary accounts receivable records are reconciled to the control account by an employee independent of the authorization of credit
1. A sales invoice for $5200 was computed correctly but, by mistake, was entered as $2500 to the sales journal and posted to the accounts receivable master file. The customer remitted only $2500, the amount on his monthly statement. What control could have prevented?
a. Sales invoice numbers, prices, discounts, extensions, and footings are independently checked
b. The customers’ monthly statements are verified and mailed by a responsible person other than the bookkeeper who prepared them
c. Pre-listings and predetermined totals are used to control postings
d. Unauthorized remittance deductions made by customers or other matters in dispute are investigated promptly by a person independent of the accounts receivable function
1. Shipments occurring in December 2013 did not get recorded until the first few days of January 2014. What control could have prevented?
a. The system automatically assigns bill of lading numbers and ensures no duplicates are issued.
b. As goods leave the shipping dock, the system generates a bill of lading and associated sales invoice, which is automatically recorded in the sales journal
c. The accounting system requires entry of a valid bill of lading number provided by the shipping department before a sales transaction is accepted for entry
d. The system prevents the creation of a bill of lading without a customer order dated prior to the shipping date
1. An auditor is performing substantive tests of transactions for sales. One step is to trace a sample of debit entries from the accounts receivable master file back to the supporting duplicate sales invoices. What will the auditor intend to establish by this step?
a. Sales invoices represent existing sales
b. All sales have been recorded
c. All sales invoices have been correctly posted to customer accounts
d. Debit entries in the accounts receivable master file are correctly supported by sales invoices
1. Which audit procedure is most effective in testing credit sales for overstatement?
a. Trace a sample of postings from the sales journal to the sales account in the general ledger
b. Vouch a sample of recorded sales from the sales journal to shipping docs
c. Prepare an aging of account receivable
d. Trace a sample of initial sales orders to sales recorded in the sales journal
1. To determine whether internal control relative to the revenue cycle of a wholesaling entity is operating effectively in minimizing the failure to prepare sales invoices, an auditor would most likely select a sample of transactions from the population represented by the
a. Sales order file
b. Customer order file
c. Shipping doc file
d. Sales invoice file
1. As a result of analytical procedures, the auditor determines that the gross profit percentage has declined from 30% in the preceding year to 20% in the current year. The auditor should
a. Express a qualified opinion due to inability of the client company to continue as a going concern
b. Evaluate management’s performance in causing this decline
c. Require footnote disclosure
d. Consider the possibility of a misstatement in the financial statements
1. An auditor’s preliminary analysis of accounts receivable turnover revealed the following rates over these accounting periods:
2013 – 4.3
2012 – 6.2
2011 – 7.3
Which of the following is the most likely cause of the decrease in accounts receivable turnover?
a. Increase in the cash discount offered
b. Liberalization of credit policy
c. Shortening of due date terms
d. Increased cash sales
1. After a CPA has determined that accounts receivable have increased as a result of slow collections in a “tight money” environment, the CPA will be likely to
a. Increase the balance in the allowance for bad debt account
b. Review the going concern ramifications
c. Review the credit and collection policy
d. Expand tests of collectability
1. Which of the following procedures will an auditor most likely perform for year-end accounts receivable confirmations when the auditor did not receive replies to second requests?
a. Review the cash receipts journal for the month prior to year end
b. Intensify the study of internal control concerning the revenue cycle
c. Inspect the shipping records documenting the merchandise sold to the debtors
d. Increase the assessed level of detection risk for the existence assertion
1. The negative form of accounts receivable confirmation request is useful except when
a. Internal control surrounding accounts receivable is considered to be effective
b. A large number of small balances are involved
c. The auditor has reason to believe the persons receiving the requests are likely to give them consideration
d. Individual account balances are relatively large
1. The return of a positive confirmation of accounts receivable without an exception attests to the
a. Collectability of the receivable balance
b. Accuracy of the allowance for uncollectible accounts
c. Accuracy of the gaining of accounts receivable
d. Accuracy of the receivable balance
1. Which of the following will most likely provide the most assurance concerning the accuracy balance-related objective for accounts receivable?
a. Vouch amounts in the subsidiary ledger to details on shipping docs
b. Compare receivable turnover ratios with industry statistics for reasonableness
c. Inquire about receivables pledged under loan agreements
d. Assess the allowance for uncollectible accounts for reasonableness
1. Which of the following audit procedures will best uncover an understatement of sales and accounts receivable?
a. Test a sample of sales transactions, selectin the sample from pre-numbered shipping docs
b. Test a sample of sales transactions, selecting the sample from sales invoices recorded in the sales journal
c. Confirm accounts receivable
d. Review the aged accounts receivable trial balance
1. The confirmation of customers’ accounts receivable rarely provides reliable evidence about the completeness assertion because
a. Customers may not be inclined to report understatement errors in their accounts
b. Recipients usually respond only if they disagree with the info on the request
c. Many customers merely sign and return the confirmation without verifying details
d. There is likely to be reliable 3rd party evidence available
1. The audit step most likely to reveal the existence of contingent liabilities is
a. A review of vouchers paid during the month following year-end
b. Mortgage-note confirmation
c. Accounts payable confirmation
d. An inquiry directed to legal counsel
1. When a contingency is resolved subsequent to the issuance of audited financial statements, which correctly contained disclosure of the contingency in the footnotes based on info available at the date of issuance, the auditor should
a. Take no action regarding the event
b. Insist that the client issue revised financial statements
c. Inform the audit committee that the report cannot be relied on
d. Inform the appropriate authorities that the report cannot be relied on
1. Which of the following would be least likely to be included in a standard inquiry to the client’s attorney?
a. A list provided by the client of pending litigation or asserted or unasserted claims with which the attorney has had some involvement
b. A request for the attorney to opine on the correct accounting treatment associated with an outstanding claim or pending lawsuit outcome
c. A request that the attorney provide info about that status of pending litigation
d. A request for the attorney to identify any pending litigation or threatened legal action not identified on a list provided by the client
1. Which of the following is not a required item to be communicated by the auditor to the audit committee or others charged with governance?
a. Info about the auditor’s responsibility in an audit of financial statements
b. Info about the overall scope and timing of the audit
c. Recommendations for improving the client’s business
d. Significant findings arising from the audit
1. Written management representations obtained by the auditor in connection with a financial statement audit should include a
a. Summary of all corrected misstatements
b. Statement of management’s belief that any uncorrected misstatements are in fact not misstatements
c. Statement of management’s belief that the effects of uncorrected misstatements are not material
d. Summary of all uncorrected misstatements
1. A management letter
a. Is the auditor’s report on significant deficiencies and material weaknesses in internal control
b. Contains recommendations from the auditor designed to help the client improve
c. Is mandatory in all audits and must be dated the same date as the audit report
d. Contains management’s representations to the auditor documenting statements made by management to the auditor during the audit about matters affecting the financial statements
1. An audit report was dual-dated for a subsequent event discussed in the financial statements, which occurred after the completion of the evidence collection process but before the issuance of the financial statements. The auditor’s responsibility for events occurring subsequent to the completion of the evidence collection process was
a. Limited to include only events occurring before the date of the last subsequent event referred to
b. Extended to subsequent events occurring through the date of issuance of the financial statements
c. Limited to the specific events referred to
d. Extended to include all events occurring since the completion of the evidence collection process
1. Subsequent events for reporting purposes are defined as events that occur subsequent to the
a. Balance sheet date but before the date of the auditor’s report
b. Date of the auditor’s report
c. Balance sheet date
d. Date of the auditor’s report and concern contingencies that are not reflected in the financial statements
1. An example of an event occurring in the period of the auditor’s field work subsequent to the end of the year being audited that normally will not require disclosure in the financial statements or auditor’s report is
a. Serious damage to the company’s plant from a widespread flood
b. Issuance of a widely advertised capital stock issue with restrictive covenants
c. Settlement of a large liability for considerably less than the amount recorded
d. Decreased sales volume resulting from a general business recession
1. The form 10-K filed by management of a public company incudes a section on management’s discussion and analysis (MD&A) in addition to the annual financial statements. Which of the following best describes the auditor’s responsibility for the MD&A information?
a. The auditor must perform sufficient appropriate audit procedures to opine on the MD&A information
b. The auditor has no responsibilities related to the MD&A disclosures
c. The auditor must read the MD&A info to determine if there is any material inconsistency with the audited financial statements
d. The auditor must provide a disclaimer of opinion related to the MD&A info
1. Management of Thurman Corporation included additional supplementary info in documents that include the audited financial statements for the year ended Dec 31, 2013. Management has asked its audit firm, Wally, CPAs, whether they can report on the supplementary info. Which of the following conditions would preclude Wally from conducting this engagement?
a. The supplementary info is derived from the accounting records used to generate the basic financial statements
b. The supplementary info covers the period Jan 1 2013 – feb 15 2014
c. Wally’s opinion of the basic financial statements was unqualified
d. When evaluating supplementary info, Wally plans to use the same materiality threshold as that used in the audit of the basic financial statements.
1. Investment and property schedules are presented for purposes of additional analysis in a doc outside the basic financial statements. The schedules are not required supplementary info. When the auditor is engaged to report on whether the supplementary info is fairly stated in relation to the audited financial statements as a whole, the measurement of materiality is the
a. Greater of the individual schedule of investments or schedule of property by itself
b. Lesser of the individual schedule of investments or schedule of property by itself
c. Same as that used in forming an opinion on the basic financial statements as a whole
d. Combined total of both the individual schedules of investments and property as a whole
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