Auditing Chapter 13 Homework

Questão 1 de 30

1

Which of the following is the auditor’s primary objective when auditing debt?

Selecione uma das seguintes:

a. Proper presentation and disclosure, including important restrictions contained in the debt.
b. Understatement of the debt obligation focusing on the completeness assertion.
c. Valuation of gains or losses on refinancing debt.
d. Proper valuation of bond premium or bond discount, including amortization valuation.

Explicação

Questão 2 de 30

1

Which of the following is not a common debt covenant restriction?

Selecione uma das seguintes:

a. Specification of a maximum debt-equity ratio.
b. Maintenance of a minimum working-capital ratio.
c. Maintenance of a minimum level of retained earnings before dividends can be paid.
d. Specification of a minimum earnings per share.

Explicação

Questão 3 de 30

1

Which of the following results in a situation where an auditor has the least amount of difficulty in determining stock valuation?

Selecione uma das seguintes:

a. When stock is exchanged for another business.
b. When stock is issued for land.
c. When stock options are issued and exercises occur.
d. When stock is issued for cash.

Explicação

Questão 4 de 30

1

How would an auditor generally measure the value of a stock option expense?

Selecione uma das seguintes:

a. Appraised value.
b. All of these methods can be used.
c. By computing a weighted average value of all classes of stock authorized.
d. Fair value.

Explicação

Questão 5 de 30

1

When auditing the gains or losses on refinancing debt, the auditor primarily focuses on which assertion?

Selecione uma das seguintes:

a. Presentation and disclosure.
b. Existence.
c. Valuation.
d. Completeness.

Explicação

Questão 6 de 30

1

When auditing the premium or discount on bonds (including amortization), the auditor primarily focuses on which assertion?

Selecione uma das seguintes:

a. Completeness.
b. Existence.
c. Presentation and disclosure.
d. Valuation.

Explicação

Questão 7 de 30

1

Which of the following is not an inherent risk typically associated with recording debt transactions?

Selecione uma das seguintes:

a. Interest expense not being properly recorded.
b. Debt not being properly classified.
c. Debt not being properly authorized.
d. Failure to accrue interest expense.

Explicação

Questão 8 de 30

1

The inherent risk of proceeds from stock sales not being received is most likely related to which of the following management assertions?

Selecione uma das seguintes:

a. Existence.
b. Presentation and disclosure.
c. Valuation.
d. Completeness.

Explicação

Questão 9 de 30

1

An auditor determines that there is an inherent risk that all stock repurchased is not recorded as treasury stock. This determination is most likely tied to which of the following management assertions?

Selecione uma das seguintes:

a. Completeness.
b. Presentation and disclosure.
c. Valuation.
d. Existence.

Explicação

Questão 10 de 30

1

An auditor determines that there is an inherent risk that dividends may be recorded and paid before being declared. This determination is most likely tied to which of the following management assertions?

Selecione uma das seguintes:

a. Presentation and disclosure.
b. Valuation.
c. Completeness.
d. Existence.

Explicação

Questão 11 de 30

1

An auditor determines that there is an inherent risk that a company has not included both the basic earnings per share and diluted earnings per share amounts in financial statements even though significant dilutive securities are part of the company’s complex capital structure. This determination is most likely tied to which of the following management assertions?

Selecione uma das seguintes:

a. Existence.
b. Valuation.
c. Rights and obligations.
d. Presentation and disclosure.

Explicação

Questão 12 de 30

1

Which of the following is not a potential fraud related to debt?

Selecione uma das seguintes:

a. Dividends are paid in violation of restrictive covenants.
b. Debt is not properly authorized.
c. Entire loan payments are charged to either principal or interest.
d. Long-term or short-term debt is misclassified.

Explicação

Questão 13 de 30

1

What type of risk is intentional failure by management to accurately disclose violations of debt covenants?

Selecione uma das seguintes:

a. Fraud risk.
b. Inherent risk.
c. Detection risk.
d. Control risk.

Explicação

Questão 14 de 30

1

Which of the following would an auditor not typically perform as part of gaining an understanding of the client’s controls related to debt?

Selecione uma das seguintes:

a. Recalculate interest expense.
b. Inquire of management about the process for reviewing compliance with debt covenants.
c. Review policies related to approval required for new debt.
d. Review the client’s documentation of controls.

Explicação

Questão 15 de 30

1

Which of the following does an auditor consider when gaining an overall understanding of the client’s internal controls?

Selecione uma das seguintes:

a. Transaction controls at the account level only.
b. Entity-wide controls at the assertion level only.
c. Both entity-wide controls and transaction controls at the account and assertion levels.
d. Entity-wide controls at the account level only.

Explicação

Questão 16 de 30

1

Which of the following are entity-wide components of internal control that can mitigate the risk of material misstatement related to debt?

Selecione uma das seguintes:

a. Monitoring controls.
b. All of these are entity-wide components of internal control.
c. Information and communication.
d. Risk assessment.

Explicação

Questão 17 de 30

1

Which of the following is a typical control for debt?

Selecione uma das seguintes:

a. Upper managers approve all new debt.
b. The stockholders approve all new debt.
c. The CFO approves all new debt.
d. The board of directors approves all new debt.

Explicação

Questão 18 de 30

1

Which of the following statements is typically not true regarding controls related to proper accounting for stock option grants?

Selecione uma das seguintes:

a. The proper accounting for stock option grants is researched by the organization’s accountant.
b. The analysis of the accountant regarding stock option grants is reviewed by the organization’s legal counsel.
c. The analysis of the accountant regarding stock option grants is reviewed by the board of directors.
d. The analysis of the accountant regarding stock option grants is reviewed by the CFO.

Explicação

Questão 19 de 30

1

Which of the following statements is true regarding planning analytical procedures for debt and stockholders’ equity transactions?

Selecione uma das seguintes:

a. The long-term debt to equity ratio could be considered by the auditor as part of the planning analytical procedures.
b. Because there are typically only a few stockholders’ equity transactions, the auditor is not required to perform planning analytical procedures for stockholders’ equity accounts.
c. If unusual or unexpected relationships are identified by planning analytical procedures, the auditor should stick with the original expectations of misstatements, because this could be an anomaly and bias the audit overall.
d. Trend analysis would not typically be performed for debt.

Explicação

Questão 20 de 30

1

Which of the following statements is true regarding the appropriate audit procedures to perform for debt and stockholder’s equity accounts?

Selecione uma das seguintes:

a. The auditor will usually decide to test debt, including interest, using only substantive procedures.
b. None of these statements is true.
c. Testing debt, including interest, is typically accomplished using only control procedures.
d. When auditing stockholders’ equity transactions, the auditor commonly uses a control procedure approach, but uses only substantive procedures to test debt obligation transactions.

Explicação

Questão 21 de 30

1

For integrated audits, when does the auditor test the operating effectiveness of important controls?

Selecione uma das seguintes:

a. As of the end of the second quarter of the client’s fiscal year.
b. None of these answers is correct.
c. As of the beginning of the client’s fiscal year.
d. As of the client’s year end.

Explicação

Questão 22 de 30

1

Which of the following is not a typical test of controls when auditing debt and equity transactions?

Selecione uma das seguintes:

a. Comparing current year account balances with prior year account balances.
b. Inquiry of personnel performing the control.
c. Observation of the control being performed.
d. Reperformance of the control by the auditor testing the control.

Explicação

Questão 23 de 30

1

Which of the following procedures would be included in the auditor’s audit program for long-term debt?

Selecione uma das seguintes:

a. Investigation of credits to the bond interest income account.
b. Review debt loan agreements.
c. Verification of the existence of the bondholders.
d. Inspection of the accounts payable master file.

Explicação

Questão 24 de 30

1

Which of the following is the least important in helping the auditor develop an independent expectation of interest expense as a substantive analytical procedure?

Selecione uma das seguintes:

a. Examine disaggregated data by type of debt.
b. Examine an interest revenue schedule.
c. Determine average interest rates.
d. Determine average debt outstanding.

Explicação

Questão 25 de 30

1

Which of the following will an auditor not perform when looking for additions to debt?

Selecione uma das seguintes:

a. Trace the proceeds into the bank statement.
b. Examine canceled notes.
c. Trace the proceeds into the cash receipts records.
d. Obtain assurance regarding board approval of the debt through review of board meeting minutes.

Explicação

Questão 26 de 30

1

Which of the following will an auditor not perform when looking for debt reductions?

Selecione uma das seguintes:

a. Examine canceled checks.
b. Examine proceeds into the cash receipts records.
c. Examine canceled notes.
d. Examine payments through the cash disbursements records.

Explicação

Questão 27 de 30

1

Which of the following is not a substantive test of details for dividends?

Selecione uma das seguintes:

a. Agreement of the dividend amount with the payment in the cash disbursements journal.
b. Examination of the minutes of the board of directors’ meetings for the dividend record date.
c. Calculation of the dividend payout ratio.
d. Examination of the minutes of the board of directors’ meetings for authorization of the dividend per share amount.

Explicação

Questão 28 de 30

1

In those audits where there is a heightened risk of fraud related to debt, which of the following will the auditor not typically perform?

Selecione uma das seguintes:

a. Vouch and trace loan proceeds and debt payments.
b. Search public records to identify debt.
c. Send confirmations to lenders and creditors, including confirmation of compliance with any debt covenants.
d. Obtain photocopies of supporting documents.

Explicação

Questão 29 de 30

1

Which of the following is not an element of pensions and other postemployment benefits that is difficult to estimate?

Selecione uma das seguintes:

a. Long-term interest rates to discount future costs back to present value.
b. The future earnings of employees prior to retiring for defined benefit plans.
c. Projected lifetime of former employees that will receive a pension.
d. Current amounts earned on pension plan assets.

Explicação

Questão 30 de 30

1

An audit of the other postemployment benefits does not require estimates with respect to which of the following?

Selecione uma das seguintes:

a. Changes in average life expectancies.
b. Changes in coverage.
c. Changes in human resources personnel in charge of postemployment benefits.
d. Changes in medical expenses.

	Criado por Kayla Harbaugh aproximadamente 4 anos atrás