Audit Final Exam Practice Latest Questions with 100% Correct Answers

Audit Final Exam Practice Questions with 100% Correct Answers 2022/2023 What was the motivation of the CEO to engage in the fraud in the Regina Vacuum Cleaner movie? - Ans-His sister was successful in business and he wa ...

Audit Final Exam Practice Questions with 100% Correct Answers 2022/2023 What was the motivation of the CEO to engage in the fraud in the Regina Vacuum Cleaner movie? - Ans-His sister was successful in business and he wanted to be a success too, he felt forced to do it What were some accounts or activities that were misstated in the movie Regina Vacuum Cleaner? - Ans-Premature revenue recognition, failure to post certain expenses, accounts receivable and sales revenue A sale of $60,000 was made to a real customer. Then, the sale was mistakenly recorded again. Indicate the balance-related audit objective that is a problem - Ans-Existence A customer check in the amount of $80,000 was received and was not recorded. The customer's accounts receivable balance was not decreased. Indicate the balance-related audit objective that is a problem for cash _____________, accounts receivable _____________ - Ans-completeness, rights and obligations A sales return of $90,000 was not recorded. Indicate the balance-related audit objective that is a problem - Ans-Completeness The monthly adjustment to Bad Debt Expense and Allowance for Uncollectible Accounts was made. The controller just made up a number to use in the journal entry. Indicate the balance-related audit objective that is a problem - Ans-Valuation and Allocation A shipment was made to a real customer. The customer was not billed and the sale was not recorded. The sale would have been in the amount of $105,000. Indicate the balance-related audit objective that is a problem - Ans-Completeness An accounts receivable was sold, but is still included in accounts receivable. Indicate the balance-related audit objective that is a problem - Ans-Existence This document is also called bill of lading - Ans-Shipping Document This document is basically the bill sent to the customer for a purchase it has made - Ans-Sales Invoice This document may be used when a customised, special or expensive product is made by the client for the customer - Ans-Sales Contract This document shows the beginning balance, purchases on credit, payments and ending balance for a customer - Ans-Monthly Statement This document shows the type of product and the quantity the customer wants to purchase - Ans-Customer Sales order This document is returned with the customer check in payment of accounts receivable - Ans-Remittance Advice The accounting document that shows all the activity in sales revenue for a year - Ans-Sales Journal The result is a decrease in accounts receivable and an increase in sales returns and allowances - Ans-Credit Memo How could lapping be detected? - Ans-Too much activity on credit sale, and compare amount on remittance advice What conditions at the company could allow lapping to happen? - Ans-Weak separation of duties, custody and accounting have been combined, and independent checks on performance are not supervised Analysis of responses for A/R Confirmations; year-end is December 31, 2015: We paid the balance, $50,000, on January 3, 2016 - Ans-Timing difference, sales issue, shipping documents, subsequent cash receipts Analysis of responses for A/R Confirmations; year-end is December 31, 2015: We already paid off this balance of $40,000 - Ans-Timing difference, subsequent cash receipts, sales invoice, shipping documents Analysis of responses for A/R Confirmations; year-end is December 31, 2015: We did buy products, but we are contesting the prices of two items. ABC says we owe $100,000 for these items, but we think the value of the products is $80,000 - Ans-Exception, sales invoices, shipping documents, sales contract, emails or calls on file Analysis of responses for A/R Confirmations; year-end is December 31, 2015: I'm glad you wrote; we can use some help here. We still have not received these goods. We did place an order, around December 1, 2015, which will cost us $85,000, but we have not yet received this order. Can you check on this order for us? Please give a call to our purchasing manager with update. - Ans-Timing difference, compare $85,000 for customer, shipping document, figure when product shipped, see what client has recorded Analysis of responses for A/R Confirmations; year-end is December 31, 2015: Hello Anyone there? Our inventory manager returned those around December 27, 2015. We are still waiting to get our debit memo, which should be around $75,000 - Ans-Timing difference, would want to see the credit memo. End of the year, may not have had time to go through the inventory. Customer calls it a debit memo because they are expecting to get money back for their return and decrease their A/P