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Auditing Multiple Choice

1. Observation of inventories is a required audit procedure whenever
a. inventories are material.
b. inventories are material and it is practicable and reasonable.
c. it is practicable and reasonable.
d. the auditor considers it to be necessary.
e. inventories are material and the auditor considers it to be necessary.

2. During the observation of the inventory, the auditor has no responsibility to:
a. observe the taking of the inventory by client personnel.
b. make some test counts of inventory quantities.
c. supervise the taking of the inventory.
d. make inquiries of the client concerning the inventories.
e. watch for damaged and obsolete inventory items.

3. On an SEC engagement, an auditor wishes to determine the officers who receive the greatest total compensation. This objective is related primarily to the:
a. existence or occurrence assertion.
b. rights and obligations assertion.
c. valuation or allocation assertion.
d. presentation or disclosure assertion.
e. completeness assertion.

4. For proper control, unclaimed checks should be stored by the:
a. treasurer's department.
b. payroll department.
c. personnel department.
d. data control department.
e. timekeeping department.

5. Which of the following items should be sent by timekeeping to the payroll department?
a. the payroll register
b. the payroll transactions
c. the prenumbered paychecks
d. the summary of the paychecks

e. the clock cards

6. The specific account balance audit objective, the entity owns or has rights to all recorded plant assets at the balance sheet date, relates to the:
a. rights and obligations assertion.
b. completeness assertion.
c. existence or occurrence assertion.
d. valuation or allocation assertion.
e. presentation or disclosure assertion.

Solution Preview

1.)b. inventories are material and it is practicable and ...

Solution Summary

Multiple choice questions for auditing.

Observation of inventories is a required audit procedure whenever...
During the observation of the inventory, the auditor has no responsibility to:
On an SEC engagement, an auditor wishes to determine the officers who receive the greatest total compensation. This objective is related primarily to the:
For proper control, unclaimed checks should be stored by the:
Which of the following items should be sent by timekeeping to the payroll department?
The specific account balance audit objective, the entity owns or has rights to all recorded plant assets at the balance sheet date, relates to the:

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