Perform direct tests of account balances

Assignment Help Accounting Basics
Reference no: EM13150115

An auditor determines that management integrity if high, the risk of account misstatements is low, and the client's internal controls are effective. Which of the following conclusions can be reached regarding the need to perform direct tests of account balances?

A. Direct tests should be limited to material account balances, and the extent of testing should be sufficient to corroborate the auditor's assessment of low risk.

B. Direct tests of account balances are not needed.

C. Direct tests of account balances are necessary if the audit risk was set at a low level but are not necessary if audit rish was set at a high level.

D. Direct tests should be performed on all account balances to independently verify the correctness of the financial statements.

Reference no: EM13150115

Questions Cloud

What is the population and the sample to problem : On average, 8% of the subscribers respond to the survey. Of the 8% who respond, an average of 53% say they will renew. What is the Population and the Sample to this problem.
Profit maximizing rule : Profit Maximizing Rule: A firm maximizes profit by continuing to produce and sell output until Marginal Revenue (MR) = Marginal Cost (MC).
Calculate the moles of argon present : A 357 mL container holds 0.146 g of Ne and an unknown amount of Ar at 35°C and a total pressure of 625 mmHg. Calculate the moles of Ar present.
What is the most this individual would pay to play a game : An individual has a certainty equivalent coefficient equal to 0.4. What is the most this individual would pay to play a game that pays $50 or $30 with equal probability?
Perform direct tests of account balances : An auditor determines that management integrity if high, the risk of account misstatements is low, and the client's internal controls are effective. Which of the following conclusions can be reached regarding the need to perform direct tests of ac..
Work in process inventory at the beginning of the period : Kent Company had 800 units of product in its work in process inventory at the beginning of the period. During the period 3,000 additional units of product were started.
What will the volume be : A sample of nitrogen gas occupies 1.55 L at 27.0 degrees Celsius and 1.00atm. What will the volume be at -100.0 degrees Celsius and the same pressure?
Performance of most recent class is significantly better : Class of 22 obtains a mean of 92 and a standard deviation of 4. Is he correct in assuming that the performance of the most recent class is significantly better than that of other classes?
Explain how many moles of excess base are present : How many moles of excess base are present? How many additional mL of 0.100 M HCl would be required to neutralize the solution?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Noncumulative-nonparticipating preferred stock

Shamrock Company had net income of $30,000. On January 1, the number of shares of common stock outstanding was 8,000. The company declared a $2,700 dividend on its noncumulative, nonparticipating preferred stock.

  Accounting rate of return on original investment

The company uses the straight-line method of depreciation with no mid-year convention. What is the accounting rate of return on original investment rounded to the nearest percent, assuming no taxes are paid.

  Computing maximum patients from historical data trends

You are a Branch Manager and your office saw 2,500 patients in January 2012. From historical data, you know each month you add exactly 160 new patients and this trend will continue indefinitely.

  Compensation expense relative to the options

In its year 2 financial statements, Gregory's on Ormond would recognize compensation expense relative to the options of how much?

  What was the actual fixed overhead incurred for may

Stoker Corporation applies fixed overhead at the rate of $0.65 per unit. For May, budgeted fixed overhead was $524,745. The production volume variance amounted to $5,070 unfavorable, and the price variance was $11,100 unfavorable.

  Acquisition of machine

Page Company is contemplating the acquisition of a machine that costs $50,000 and promises to reduce annual cash operating costs by $11,000 over each of the next six years.

  Property taxes for consolidated school district

Ford county lieves for its general fund $2,000,000 in property taxes. In addition, the county is responsible for collecting $4,000,000 in property taxes for the consolidated school district and $1,000,000 in property taxes for a town within the co..

  Perpetual inventory method

Unger Company uses the perpetual inventory method. Unger sold goods that cost $3,500 for $7,200. If the sale was made to a customer on account, the sale will:

  Accounting model of business valuation

What does the accounting model of business valuation focus on?

  Warrant value of charles river company

Charles River Company has just sold a bond issue with 10 warrants attached. The bonds have a 20-year maturity, an annual coupon rate of 12.0 percent, and they sold at their $1,000 par value.

  What is the common stock

What is the common stock, retained earnings, cost of goods sold and net income. I have 5000 cash, 10000 inventory,45000 building,5000accounts payable.total liabitities stockholders 60000,revenues 80000 and administrative expeneses 10000

  Problem on straight-line method of depreciation

On October 1, 2010, Mann Company places a new asset into service. The cost of the asset is $40,000 with an estimated 5-year life and $10,000 salvage value at the end of its useful life. What is the depreciation expense for 2010 if Mann Company use..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd