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Examine evidence on sales invoice that the prices were agreed to the approved price list.
Calculate SER for each of columns 1 through 4 and use this to calculate the actual allowance for sampling risk.
What is the most appropriate sampling unit for conducting most of the audit sampling tests?
What is the nature of most infrequently operating controls, and why is it important for the auditor to test these controls?
Distinguish among tests of details of balances, tests of controls, and substantive tests of transactions for the sales and collection cycle.
I do not believe in performing tests of controls and substantive tests of transactions for the sales and collection cycle.
Identify the eight accounts receivable balance-related audit objectives.
Distinguish between accuracy tests of gross accounts receivable and tests of the realizable value of receivables.
State the purpose of footing the total column in the client's accounts receivable trial balance, tracing individual customer names and amounts to the accounts.
In many audits in which accounts receivable is material, the requirement of confirming customer balances is a waste of time and would not be performed.
Explain why it is common for auditors to send confirmation requests to vendors with "zero balances" on the client's accounts payable .
Explain why most auditors consider the receipt of goods and services the most important point in the acquisition and payment cycle.
It is less common to confirm accounts payable at an interim date than accounts receivable. Explain why.
In testing the cutoff of accounts payable at the balance sheet date, explain why it is important that auditors coordinate their tests.
Are all supporting documents properly cancelled at the time the checks are signed?
Distinguish between a positive and a negative confirmation and state the circumstances in which each should be used.
Under what circumstances would an auditor choose to confirm information such as the right of return or special sales terms in addition to the customer balance?
Explain why the analysis of differences is important in the confirmation of accounts receivable, even if the misstatements in the sample are not material.
Why does an auditor review sales returns subsequent to year-end? What audit objective does this procedure satisfy?
An auditor is determining the appropriate sample size for testing inventory valuation using MUS.
Why is it difficult to determine the appropriate sample size for MUS? How should the auditor determine the proper sample size?
Define what is meant by the population standard deviation and explain its importance in variables sampling.
In using difference estimation, an auditor took a random sample of 100 inventory items from a large population to test for proper pricing.
Distinguish among difference estimation, ratio estimation, mean-per-unit estimation, and stratified mean-per-unit estimation.
An essential step in difference estimation is the comparison of each computed confidence limit with tolerable misstatement.