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Midterm 1 Short Answer

Terms in this set (12)

Existence: addresses whether all assets/liabilities/etc. Recorded in the statements exist, looking for overstatements of ending balances
Touring the plant to determine a major equipment acquisition was received
Perform inspection and independently count a sample of the client's marketable securities held in a safe deposit box
Completeness:Addresses whether all transactions/accounts that should be included in the statements are included, looking for understatements of ending balances
Select source document for legal expense and determine that expenses were appropriately expensed
Selecting source documents for materials received and determine that payables were recorded in the appropriate time, not delayed
Rights/Obligations: Addresses whether recorded assets and liabilities are the rights and obligations of the organization
Inspecting Inventory Warehouse for goods on consignment or ending inventory to which the organization does not have legal title and determine that they were not included on financial statements as their own.
Inspect documents related to lease contracts
Valuations/Allocations: Addresses whether accounts have been included in the financial statements at appropriate amounts
Determine that estimated life and salvage value are consistent with similar purchases, policies, expected future use and past experience
Develop an expectation of total depreciation using analytical procedures
Presentation/Disclosure: Addresses whether components of the financial statements are properly classified, described, and disclosed
Review disclosures to ensure that they are adequate and understandable
Review presentation within financial statements to ensure completeness and conformance with the applicable financial reporting framework