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20 terms

chapter 17

STUDY
PLAY
Which of the following audit procedures would be least likely to lead the auditor to find misrecorded fixed asset disposals?
Review of miscellaneous income
Which of these would the auditor most likely discover from a tour of the client=s facilities?
Necessary maintenance has not been performed.
An auditor analyzes repair and maintenance expense to determine whether all
Expenditures for plant additions have not been charged to expense
The auditor may conclude that depreciation expense is insufficient by noting
Excessive losses on assets retired
Which of the following is a customary audit procedure for the verification of the legal ownership of real property?
Examination of deeds and title guaranty policies on hand
Apex Incorporated issued common stock to acquire another company in an acquisition that was accounted for as a purchase. Which of these would be unnecessary to audit the transaction?
All would be necessary to audit the transaction.
The auditor examines lease agreements primarily to determine whether
All of these
Auditing depreciation expense most likely could involve all of these except
Confirmation
Audits of long-term debt most likely could involve all of these except
All could be involved
The auditor audits retirements of long-term debt to determine whether
All of these
Confirmation of bank loans provides primary evidence concerning
All of these
During an examination of a publicly held company, the auditor should obtain written confirmation regarding debenture transactions from the:
Trustee
During the course of an audit, a CPA observes that the recorded interest expense seems to be excessive in relation to the balance in the long term debt account. This observation could lead the auditor to suspect that:
Long term debt is understated.
In connection with the audit of a current issue of long term bonds payable, the auditor should:
Ascertain that the client has obtained the opinion of counsel on the legality of the issue.
When a company has treasury stock certificates on hand, a year end count of the certificates by the auditor is:
Always required
Which of the following is the most important consideration of an auditor when examining the stockholders' equity section of a client's balance sheet?
Entries in the capital stock account can be traced to a resolution in the minutes of the board of directors meetings
The auditors audit program to examine long-term debt should include steps for
Verifying balances of debt through confirmation
Braginetz Corporation acts as its own registrar and transfer agent and has assigned these responsibilities to the company secretary. The CPA primarily will rely upon:
Inspection of the stock book at year-end and accounting for all certificate numbers.
In the audit of long-term debt, the auditor should be aware of possible
All of these
An audit program for the examination of the retained earnings account should include a step that requires verification of the:
Authorization for both cash and stock dividends.