AUDIT 374 FINAL EXAM COMPLIED
WITH RIGHT ANSWERS
This raccount ris rthe rvaluation radjustment rfor rPP&E r- rCORRECT✅✅Accumulated
rDepreciation
This ris rthe rmain rvaluation rissue rfor rall rlong-term rassets rlike rgoodwill r-
rCORRECT✅✅Impairment
This ris ra rkey rinternal rcontrol rpolicy raffecting raccounting rfor rfixed rasset racquisitions r-
rCORRECT✅✅Capitalization rPolicy
When rtesting rfor runrecorded rretirements, rthe rauditor rbegins rthe revidence rsearch
rhere r- rCORRECT✅✅The rfixed rassets rrecorded rin rthe raccounting rrecord
Analysis rof rthis raccount ris rkey rto raddressing rthe rcompleteness rof rrecorded rPP&E r-
rCORRECT✅✅Repairs r& rMaintenance rExpenses
The rrisk rof rMM rfor rA/R rnet ris rthis r- rCORRECT✅✅Overstatement
This rform rof rconfirmation ris rexpected rto rbe rreturned ronly rif rthe rbalance rof rA/R ris
rincorrect r- rCORRECT✅✅Negative rConfirmations
When ra rcompany rsells r& rships rgoods, rthis raudit rprocedure rprovides rimportant
revidence rRE: rgross rA/R rsales, rand rother raccounts r- rCORRECT✅✅Sales rCutoff
rTests
This rinternal rcontrol ris rkey rto rensuring rappropriate rtiming rof rrevenue rrecognition r-
rCORRECT✅✅Use rof rshipping rdocuments
This rconclusion rrisk ris rassociated rwith rthe ruse rof rnegative rconfirmations r-
rCORRECT✅✅Incorrect rAcceptance
This ris rthe rlevel rof rassurance rprovided rin rexamination rreports r-
rCORRECT✅✅Reasonable
This rtype rof rprospective rfinancial rinformation ris rbased ron rhypothetical rassumptions r-
rCORRECT✅✅Projections
When rF/S rare rprepared rusing ra rspecial rpurpose rF/R rframework, rand rthe rfootnote
rexplaining rthe rF/R rframework ris rnot rincluded rin rthe rF/S, ran rauditor rwould rissue rthis
rtype rof ropinion r- rCORRECT✅✅Adverse rOpinion
, The rGAGAS r(yellow rbook) rare rapplicable rto rgovernment raudits r(including rsingle
raudits) rand rthis rspecial rtype rof raudit r- rCORRECT✅✅Performance rAudits
This rdocument rprovides rguidance rand rsuggested raudit rprocedures rfor rsingle raudits r-
rCORRECT✅✅OMB rCompliance rSupplement
This ris ra rkey rinternal rcontrol rfor rcompanies rthat rhave rsignificant ramounts rof
rinventory r- rCORRECT✅✅Physical rInventory rCount
For rmanufacturers, rthis rcomponent rof rinventory rcost rhas rthe rhighest rrisk rof rMM r-
rCORRECT✅✅Overhead
Auditors rperform ran rinventory rturnover ranalysis rto robtain revidence rRE: rthis rassertion
r- rCORRECT✅✅Valuation
When ran rauditor rselects rinventory ritems rto rcount rfrom rthose rstored rin rthe
rwarehouse, rthe rauditor ris rseeking revidence rRE: rthis rassertion r-
rCORRECT✅✅completeness
This rdocumentary rinternal rcontrol ris rkey rto rensuring rthat rinventory ris rcounted rand rin
rgood rcondition rwhen rreceived r- rCORRECT✅✅Leaving rquantities roff rof rpurchase
rorders rsent rto rreceiving
This ris rthe rrisk rof rMM rfor rA/P r- rCORRECT✅✅Understatement
Tests rof rsubsequent rdisbursements rare rthe rkey rprocedure rused rto robtain revidence
rfor rthis rassertion r- rCORRECT✅✅Completeness
Unlike rA/R rconfirmations, rA/P rconfirmations rgenerally rdo rnot rinclude rthis r-
rCORRECT✅✅Client's rBalance
Prior rto rRequesting rpayment runder ra rvoucher rsystem, rthis rdocument rmust rbe
rmatched rto rthe rpurchase rrequisition, rpurchase rorder, rand rreceiving rreport r-
rCORRECT✅✅Vendor's rInvoice
This ris rthe rmain rweakness rof rthe rtest rof rsubsequent rdisbursements r-
rCORRECT✅✅Doesn't rconsider rinvoices rthat rhave rnot rbeen rpaid
An rauditor rwill rperform rthis rprocedure rto robtain revidence rRE: rRights r& rObligations
rfor rlong-term rdebt r- rCORRECT✅✅Confirmations
An rauditor rwill rperform rthis rprocedure rto robtain revidence rabout rthe rexistence rof
requipment r- rCORRECT✅✅Physical rInspection
Several ranalytical rprocedures rfor rlong-term rdebt rare rbased ron rthe rrelationship rwith
rthis raccount r- rCORRECT✅✅Interest rExpense
WITH RIGHT ANSWERS
This raccount ris rthe rvaluation radjustment rfor rPP&E r- rCORRECT✅✅Accumulated
rDepreciation
This ris rthe rmain rvaluation rissue rfor rall rlong-term rassets rlike rgoodwill r-
rCORRECT✅✅Impairment
This ris ra rkey rinternal rcontrol rpolicy raffecting raccounting rfor rfixed rasset racquisitions r-
rCORRECT✅✅Capitalization rPolicy
When rtesting rfor runrecorded rretirements, rthe rauditor rbegins rthe revidence rsearch
rhere r- rCORRECT✅✅The rfixed rassets rrecorded rin rthe raccounting rrecord
Analysis rof rthis raccount ris rkey rto raddressing rthe rcompleteness rof rrecorded rPP&E r-
rCORRECT✅✅Repairs r& rMaintenance rExpenses
The rrisk rof rMM rfor rA/R rnet ris rthis r- rCORRECT✅✅Overstatement
This rform rof rconfirmation ris rexpected rto rbe rreturned ronly rif rthe rbalance rof rA/R ris
rincorrect r- rCORRECT✅✅Negative rConfirmations
When ra rcompany rsells r& rships rgoods, rthis raudit rprocedure rprovides rimportant
revidence rRE: rgross rA/R rsales, rand rother raccounts r- rCORRECT✅✅Sales rCutoff
rTests
This rinternal rcontrol ris rkey rto rensuring rappropriate rtiming rof rrevenue rrecognition r-
rCORRECT✅✅Use rof rshipping rdocuments
This rconclusion rrisk ris rassociated rwith rthe ruse rof rnegative rconfirmations r-
rCORRECT✅✅Incorrect rAcceptance
This ris rthe rlevel rof rassurance rprovided rin rexamination rreports r-
rCORRECT✅✅Reasonable
This rtype rof rprospective rfinancial rinformation ris rbased ron rhypothetical rassumptions r-
rCORRECT✅✅Projections
When rF/S rare rprepared rusing ra rspecial rpurpose rF/R rframework, rand rthe rfootnote
rexplaining rthe rF/R rframework ris rnot rincluded rin rthe rF/S, ran rauditor rwould rissue rthis
rtype rof ropinion r- rCORRECT✅✅Adverse rOpinion
, The rGAGAS r(yellow rbook) rare rapplicable rto rgovernment raudits r(including rsingle
raudits) rand rthis rspecial rtype rof raudit r- rCORRECT✅✅Performance rAudits
This rdocument rprovides rguidance rand rsuggested raudit rprocedures rfor rsingle raudits r-
rCORRECT✅✅OMB rCompliance rSupplement
This ris ra rkey rinternal rcontrol rfor rcompanies rthat rhave rsignificant ramounts rof
rinventory r- rCORRECT✅✅Physical rInventory rCount
For rmanufacturers, rthis rcomponent rof rinventory rcost rhas rthe rhighest rrisk rof rMM r-
rCORRECT✅✅Overhead
Auditors rperform ran rinventory rturnover ranalysis rto robtain revidence rRE: rthis rassertion
r- rCORRECT✅✅Valuation
When ran rauditor rselects rinventory ritems rto rcount rfrom rthose rstored rin rthe
rwarehouse, rthe rauditor ris rseeking revidence rRE: rthis rassertion r-
rCORRECT✅✅completeness
This rdocumentary rinternal rcontrol ris rkey rto rensuring rthat rinventory ris rcounted rand rin
rgood rcondition rwhen rreceived r- rCORRECT✅✅Leaving rquantities roff rof rpurchase
rorders rsent rto rreceiving
This ris rthe rrisk rof rMM rfor rA/P r- rCORRECT✅✅Understatement
Tests rof rsubsequent rdisbursements rare rthe rkey rprocedure rused rto robtain revidence
rfor rthis rassertion r- rCORRECT✅✅Completeness
Unlike rA/R rconfirmations, rA/P rconfirmations rgenerally rdo rnot rinclude rthis r-
rCORRECT✅✅Client's rBalance
Prior rto rRequesting rpayment runder ra rvoucher rsystem, rthis rdocument rmust rbe
rmatched rto rthe rpurchase rrequisition, rpurchase rorder, rand rreceiving rreport r-
rCORRECT✅✅Vendor's rInvoice
This ris rthe rmain rweakness rof rthe rtest rof rsubsequent rdisbursements r-
rCORRECT✅✅Doesn't rconsider rinvoices rthat rhave rnot rbeen rpaid
An rauditor rwill rperform rthis rprocedure rto robtain revidence rRE: rRights r& rObligations
rfor rlong-term rdebt r- rCORRECT✅✅Confirmations
An rauditor rwill rperform rthis rprocedure rto robtain revidence rabout rthe rexistence rof
requipment r- rCORRECT✅✅Physical rInspection
Several ranalytical rprocedures rfor rlong-term rdebt rare rbased ron rthe rrelationship rwith
rthis raccount r- rCORRECT✅✅Interest rExpense
