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How will the approach for verifying repair expense differ from that used to audit depreciation expense? Why will the approach be different?
Capitalizable assets are routinely expensed as repairs and maintenance, perishable tools, or supplies expense.
Acquisitions of fixed assets in excess of $20,000 are approved by the board of directors.
or 20 nontangible acquisitions, select a sample of line items from the acquisitions journal and trace each to related vendors' invoices.
Compare the charges for annual tax payments with property tax assessment bills.
What are the underlying accounting standards requirements that are relevant to your evaluation of the company's charge for the impairment of goodwill?
The complaint also notes that management failed to write-off an impaired asset. What were the circumstances resulting in the impairment?
Explain the relationship between the payroll and personnel cycle and inventory valuation.
List five tests of controls that can be performed for the payroll and personnel cycle and state the purpose of each control tested.
Explain why the percentage of total audit time in the cycle devoted to performing tests of controls and substantive tests of transactions .
Trace a random sample of payments from the payroll register to the related time cards and compare the hours worked with the hours paid.
In auditing payroll withholding and payroll tax expense, explain why emphasis should normally be on evaluating the adequacy of the payroll tax return.
Explain the circumstances under which an auditor should perform audit tests primarily designed to uncover fraud in the payroll and personnel cycle.
Distinguish among a payroll master file, a W-2 form, and a payroll tax return. Explain the purpose of each.
Explain what is meant by an imprest payroll account. What is its purpose as a control over payroll?
Explain why it is common to verify total officers' compensation even when the tests of controls and substantive tests of transactions results in payroll.
Is approval by a department head or foreman required for all time cards before they are submitted for payment?
Recompute hours on the time card and compare the total with the total hours for which the employee has been paid.
The payroll clerk manually prepares payroll checks but often forgets to record one or two checks in the computer-prepared payroll journal.
Discuss with management any payroll liabilities recorded in the prior year that are not provided for in the current period.
Are the audit procedures performed by Alyssa sufficient to test accrued payroll tax, vacation pay, and bonuses?
State the relationship between the TER and sample size.
Assume that the auditor has selected 100 sales invoices from a population of 100,000 to test for an indication of internal verification of pricing.
When the CUER exceeds the TER, what courses of action are available to the auditor?
State an effective audit procedure for testing whether shipments have been billed. What is the sampling unit for the audit procedure?