Auditing For the audit procedures listed in the following table, match the one m
ID: 2472750 • Letter: A
Question
Auditing
For the audit procedures listed in the following table, match the one most likely assertion being tested by the audit procedure. You may use only one answer per procedure. Each answer choice can be used once, more than once, or not at all.
Item
Audit Procedure
Assertion
1
The auditor is testing equipment by vouching significant debits to repairs and maintenance to determine whether any should have been capitalized.
2
The auditor tested depreciation related to equipment to determine that it is generally accepted and applied consistently.
3
The auditor examined titles related to vehicles in equipment.
4
The auditor determined that equipment was displayed in the long term asset category on the balance sheet.
5
The auditor applied an analytical procedure to long term debt by comparing the current year’s balance with that of the previous year.
6
The auditor tested the amortization of the recorded premium on long term debt by recalculating the amount.
7
The auditor reconciled the amount of debt in the subsidiary ledger with the total in the general ledger account.
8
The auditor confirmed shares of common stock issued and outstanding of the client with the registrar and transfer agent.
9
The auditor determined that restrictions on the issuance of dividends were properly described in the financial statements notes.
10
The auditor determined that the loss associated with the sale of treasury stock was properly calculated.
LIST OF MANAGEMENT ASSERTIONS
CO
Completeness
CUT
Cutoff
A
Accuracy
RO
Rights and obligations
VA
Valuation or Allocation
O
Occurrence
E
Existence
CU
Classification and understandability
Item
Audit Procedure
Assertion
1
The auditor is testing equipment by vouching significant debits to repairs and maintenance to determine whether any should have been capitalized.
2
The auditor tested depreciation related to equipment to determine that it is generally accepted and applied consistently.
3
The auditor examined titles related to vehicles in equipment.
4
The auditor determined that equipment was displayed in the long term asset category on the balance sheet.
5
The auditor applied an analytical procedure to long term debt by comparing the current year’s balance with that of the previous year.
6
The auditor tested the amortization of the recorded premium on long term debt by recalculating the amount.
7
The auditor reconciled the amount of debt in the subsidiary ledger with the total in the general ledger account.
8
The auditor confirmed shares of common stock issued and outstanding of the client with the registrar and transfer agent.
9
The auditor determined that restrictions on the issuance of dividends were properly described in the financial statements notes.
10
The auditor determined that the loss associated with the sale of treasury stock was properly calculated.
Explanation / Answer
Ans;
Item Audit Procedure Assertion 1 The auditor is testing equipment by vouching significant debits to repairs and maintenance to determine whether any should have been capitalized. A Accuracy 2 The auditor tested depreciation related to equipment to determine that it is generally accepted and applied consistently. O Occurrence 3 The auditor examined titles related to vehicles in equipment. E Existence 4 The auditor determined that equipment was displayed in the long term asset category on the balance sheet. CO Completeness 5 The auditor applied an analytical procedure to long term debt by comparing the current year’s balance with that of the previous year. CUT Cutoff 6 The auditor tested the amortization of the recorded premium on long term debt by recalculating the amount. RO Rights and obligations 7 The auditor reconciled the amount of debt in the subsidiary ledger with the total in the general ledger account. VA Valuation or Allocation 8 The auditor confirmed shares of common stock issued and outstanding of the client with the registrar and transfer agent. CU Classification and understandability 9 The auditor determined that restrictions on the issuance of dividends were properly described in the financial statements notes. RO Rights and obligations 10 The auditor determined that the loss associated with the sale of treasury stock was properly calculated. A AccuracyRelated Questions
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