Audit 2 Self Assessment Week 1

Front 1

True or False?
The payroll processing function is responsible for paying employees for services and benefits.

Back 1

False--see chapter 16

Front 2

True or False?
Assertions are representations by management, either expressed or implied, that are reflected in an organization's financial statements.

Back 2

True--see chapter 5

Front 3

T or F?
Tests of account balances detect errors or fraud in individual transactions.

Back 3

False--see ch. 14

Front 4

What internal control objectives are common to revenue, purchasing, and payroll cycles?
check all that apply:
a. validity and authorization
b. Completeness and assurance
c. Timeliness and correctness
d. Validation and compilation
e. Classification and recording

Back 4

a. see chapters 14 and 16

Front 5

What is the process for covering a shortage in cash by using cash from one customer's accounts receivable against another customer's accounts receivable?
a. Hiding
b. Recording
c. Borrowing
d. Lapping
e. Switching

Back 5

d. see ch. 14

Front 6

What is a common substantive test used to satisfy the validity auditing objective?
a. Correctness
b. Recording
c. Assurance
d. Timeliness
e. Confirmation

Back 6

e. ch. 14

Front 7

Analyzing the misstatements discovered through the application of substantive tests of transactions, analytical procedures, and test of account balances provides:
a. Proof of fraud
b. A method of balancing accounts
c. The ultimate audit answer
d. the imbalance of related accounts
e. Additional evidence on control risk

Back 7

e. ch.14