California State University, Stanislaus

ACCOUNTING 4110

Chapter 12:

1)Which of the following is least likely to be considered a substantive procedure relating to payroll?

2. Which of the following is the best way for the auditors to determine that every name on a company’s payroll is that of a bona fide employee presently on the job?
3. As a result of analytical procedures, the independent auditors determine that the gross profit percentage has declined from 30 percent in the preceding year to 20 percent in the current year. The auditors should:

4. When auditing the statement of cash flows, which of the following would an auditor not expect to be a source of receipts and payments?
5. The search for unrecorded liabilities for a public company includes procedures usually performed through the:
6. The aggregated misstatement in the financial statements is made up of:

7. A possible loss, stemming from past events that will be resolved as to existence and amounts, is referred to as a(n):
8. Which of the following is most likely to be considered a Type 1 subsequent event?
9. An auditor accepted an engagement to audit the 20X8 financial statements of EFG Corporation and began the fieldwork on September 30, 20X8. EFG gave the auditor the 20X8 financial statements on January 17, 20X9. The auditor completed the audit on February 10, 20X9, and delivered the report on February 16, 20X9. The client’s representation letter normally would be dated:
10. Which of the following procedures is most likely to be included near completion of an audit?
11. Subsequent to the issuance of the auditor’s report, the auditor became aware of facts existing at the report date that would have affected the report had the auditor then been aware of such facts. After determining that the information is reliable, the auditor should next:
12. Which of the following events occurring on January 5, 20X2, is most likely to result in an adjusting entry to the 20X1 financial statements?