Question

multiple choice questions

1. An auditor most likely examine in regards to searching for unrecorded liabilities...

A. Cut off bank statement for deposits recorded in the book, but not the bank.

B. details of accounts receivable confirmations that are classified as exceptions

C. files of purchase requisitions for items ordered just before the year end

D. receiving reports for items received before year end, but not recorded yet

2. which of the following sources of corroborating information would most likely increase the assurance that an auditor of a non-issue were obtained from management representation?

A. confirmation received from the entitys bank

B. reports of performance measured routinely prepared for management review

C. oral evidence gained from auditors discussion with employees

D. minutes of meetings of the entity strategic planning committee

Answer 1

1. Option , A. Cut off bank statement for deposits recorded in the book, but not the bank.

Reason: It is used to ascertain any unrecorded checks or if the deposits are cleared with in a reasonable period. If the deposits are not cleared then the company must still record the liability.

2. Option , A. confirmation received from the entitys bank

Reason: External evidence and confirmation from the bank will increase the audit assurance.

Answer 2

The correct answer is (D).

The requirement is to identify the procedure, among the given choices, that an auditor is most likely to perform in searching for unrecorded liabilities. Receiving reports for items received before year-end, but not yet recorded, would help the auditor identify unrecorded liabilities as these represent the items received but not yet recorded.

Answer 3

D. receiving reports for items received before year end, but not recorded yet