Which of the following is a tool that is best used by the audit team to determine if the
client has included all disclosures?
A.Management representation letter.
B.GAAS.
C.Inquiry of the CFO.
D.Checklists.
If a client makes payments to a middle-man who uses the funds to obtain corporate tax
refunds for the client from government officials, this is not considered a violation of the
Foreign Corrupt Practices Act of 1977 (FCPA).
The auditor performs substantive procedures related to property, plant and equipment to
determine if the assets have been pledged as collateral or title has transferred. What is
the primary assertion the auditor is testing?
A.Valuation.
B.Rights.
C.Presentation and disclosure.
D.Existence.
Confirmations that are sent to select customers asking them to review the current
balance due the client as shown on the client’s statement and return the letters directly to
the auditor indicating whether they agree with the indicated balance, are known by
which of the following terms?
A.Direct confirmations.
B.Indirect confirmations.
C.Positive confirmations.
D.Negative confirmations.
Which of the following assertions are usually the two most relevant assertions related to
long-lived assets?
A.Existence and Presentation.
B.Completeness and Existence.
C.Existence and Valuation.
D.Valuation and Completeness.
Bank transfer schedules are used by the auditor to address which of the following
concerns?
A.Lapping.
B.Kiting.
C.Embezzlement by omitting outstanding checks on reconciliation.
D.All of the above.
The significance of the bill of lading is to provide which of the following?
A.The warehouse personnel with the product that must be shipped to customers.
B.Invoices to customers for proper collection.
C.A credit application for customer approval.
D.Evidence of title transfer of goods to customers.