cooper, cpa, is auditing the financial statements of a small rural municipality. the recievable balances represent residences delinquent real esate taxes. Internal control at the municipality is weak. To determine the exsistence of the accounts receivable at the balance sheet date, Cooper would most likely: 1. send postive confirmation requests 2. send negative confirmtion request 3. examine evidence of subsequent cash receipts 4. inspect the internal records, such as copies of the tax invoices that were mailed to the residents I found this explanation which was helpful in narrowing down the answers. Cutoff relates to whether transactions and events have been recorded in the correct accounting period. Audit procedures must ensure that transactions occurring near year-end are recorded in the financial statements in the proper period. For example, the auditor may want to test proper cutoff of revenue transactions at December 31. This can be done by examining a sample of shipping documents and sales invoices for a few days before and after year-end. You would be looking for unrecorded transactions. AUD - 1/6/18 FAR - TBD REG - TBD BEC - TBD It has to do with Improper Revenue Recognition. A company may not want to recognize sales because it results in increases in taxes (Understating Sales). Or a company may want to recognize current year sales in the following year to make next year's statement look better (Overstating Sales). AUD - 90BEC - 78FAR - 84 REG - 87 World Domination Plan Phase I : Pass CPA Exams - Complete Phase II : Megan Fox - In Progress Phase III : Megan Fox & Scarlett Johansson Lingerie Pillow Fight Phase IV : Form the new Charlie's Angels with Megan Fox, Scarlett Johansson, & Gal Gadot Phase V : TBD 46.mediumAn auditor should perform alternative procedures to substantiate the existence of accountsreceivable when: Get answer to your question and much more 47.How might the auditor determine whether a client has limited rights to accounts receivable? Get answer to your question and much more 48.Confirmation of accounts receivable balances normally provides evidence concerning the:mediuma.valuation of the balances.cb.rights of the balances.c.existence of the balances.d.completeness of the balances. 49.If the auditor decides not to confirm accounts receivable, the auditor should: Get answer to your question and much more 50.The understatement of sales and accounts receivable is best uncovered by: Get answer to your question and much more 51.challengingaYou are reviewing sales to discover cutoff problems. If the client’s policy is to record saleswhen title to the merchandise passes to the buyer, then the books and records would containerrors if the December 31 entries were for sales recorded: Get answer to your question and much more |
Which of the following most likely would be detected by a review of a clients sales cutoff?
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