Course Auditing I;Test Final Exam Part 2;Instructions This final exam consists of 25 multiple choice questions and covers the material in Chapters 14 through 17, 21, and 24. There are five questions from each chapter.;Question 1 What critical event must take place before goods can be shipped in order to assure payment can be reasonably expected?;Question 2 When designing audit procedures, tracing of source documents to the customers subsidiary ledger and subsequently to the general ledger is done to satisfy what assertion?;Question 3 The audit procedure referred to as proof of cash receipts is particularly useful to test;Question 4 When an employee who is authorized to make customer entries in the accounts receivable subsidiary ledger, purposefully enters cash received into the wrong customer's account that employee may be suspected of;Question 5 A document sent to each customer showing his or her beginning accounts receivable balance and the amount and date of each sale, cash payment received, any debit or credit memo issued, and the ending balance is the;Question 6 One of the causes of nonsampling risk is;Question 7 A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a;Question 8 To determine if a sample is truly representative of the population, an auditor would be required to;Question 9 When the auditor decides to select less than 100 percent of the population for testing, the auditor is said to use;Question 10 Which of the following would have the least impact in determining sample size?;Question 11 When do most companies record sales returns and allowances?;Question 12 Analytical procedures;Question 13 The audit procedure that provides the auditor with the most appropriate evidence when performing test of details of balances for accounts receivable is;Question 14 Most tests of accounts receivable are based on what schedule, file, or listing?;Question 15 The two primary classes of transactions in the sales and collection cycle are;Question 16 The appropriate assumption to make regarding the overall percent of error in those population items containing an error is;Question 17 The method used to measure the estimated total error amount in a population when there is both a recorded value and an audited value for each item in the sample is;Question 18 The auditor is concerned with the audited value rather than the error amount of each item in the sample when using;Question 19 The allowance for sampling risk when no misstatements are found in the sample is;Question 20 The most commonly used method of statistical sampling for tests of details of balances is;Question 21 Which of the following is a significant audit concern related to the transfer of inventory from one location to another?;Question 22 A major difficulty in the verification of inventory cost records for the purpose of inventory valuation is in determining the reasonableness of the;Question 23 In most manufacturing companies, the inventory and warehousing cycle begins with the;Question 24 When determining the sample size for the number of items the auditor should count during the physical inventory;Question 25 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;Question 26 The standard letter of inquiry to the client's legal counsel should be prepared on;Question 27 Auditing standards require the auditor to communicate all management frauds and illegal acts to the audit committee;Question 28 A client representation letter is;Question 29 At the completion of the audit, management is asked to make a written statement that it is not aware of any undisclosed contingent liabilities. This statement would appear in the;Question 30 Which of the following subsequent events is most likely to result in an adjustment to a company's financial statements?
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