Auditing Chapter 15 Quiz 2

39 Questions  I  By Assman
Quiz ch 15 for auditing.  miller, you are a faggot.

  
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1.  An auditor obtains evidence of stockholders' equity transactions for a publicly traded company by reviewing the entity's:
A.
B.
C.
D.
2.  3. The auditors are required to confirm bond holdings directly with the bondholders.
A.
B.
3.  1. The formal documentation creating bond indebtedness is called the indenture.
A.
B.
4.  6. Corporations maintain either a stock certificate book or a stockholders' ledger.
A.
B.
5.  5. Long-term liabilities that are maturing must always be classified as a current liability.
A.
B.
6.  For a continuing client, the auditors will often find that audit time required for capital stock is small in relation to the dollars recorded in the accounts.
A.
B.
7.  The auditors generally refer to provisions in the partnership agreement when auditing the allocation of partnership income.
A.
B.
8.  2. Registered bondholders receive periodic interest payments without any action on their
A.
B.
9.  The auditors should determine that the issuance of bonds was approved by the company's stockholders
A.
B.
10.  When an independent registrar and stock transfer agent is used, it is likely that the auditor will confirm the number of shares outstanding with those parties rather than the shareholders.
A.
B.
11.  Company A does not employ an independent stock transfer agent, but rather issues its own stock and maintains its stock records. When outstanding shares are transferred from one holder to another the certificate of the selling shareholder should be:
A.
B.
C.
D.
12.  12. In auditing long-term debt, an auditor would be most likely to:
A.
B.
C.
D.
13.  The auditor's program to examine interest-bearing debt most likely will include steps that require
A.
B.
C.
D.
14.  11. A registrar/transfer agent system relating to capital stock is most likely used by:
A.
B.
C.
D.
15.  17. Bond transactions are normally confirmed with:
A.
B.
C.
D.
16.  15. Internal control over bonds payable is best when:
A.
B.
C.
D.
17.  21. Which of the following is not a primary objective in the audit of interest-bearing debt?
A.
B.
C.
D.
18.  14. Which of the following most likely would approve the issuance of notes payable?
A.
B.
C.
D.
19.  19. Which of the following procedures is least likely in the audit of capital stock?
A.
B.
C.
D.
20.  When the auditors obtain an understanding of internal control for the financing cycle documentation will frequently include a written description as well as a(n):
A.
B.
C.
D.
21.  In which of the following accounts would one expect a related party transaction to be easiest to detect?
A.
B.
C.
D.
22.  24. The audit approach for acquired treasury stock will normally include:
A.
B.
C.
D.
23.  23. For audit purposes, a corporation's articles of incorporation are normally:
A.
B.
C.
D.
24.  For a corporation that does not utilize the services of an independent registrar and stock transfer agent, which of the following represents a weakness in internal control over stock issuance?
A.
B.
C.
D.
25.  25. Changes in capital stock accounts should normally be approved by:
A.
B.
C.
D.
26.  When an auditor determines whether there are restrictions on retained earnings resulting from loans, this audit procedure most likely is intended to verify management's assertion of:
A.
B.
C.
D.
27.  7. Dividends should be authorized by the stockholders of the corporation.
A.
B.
28.  The auditors' program for the examination of long-term debt should include steps that require the:
A.
B.
C.
D.
29.  Which of the following is an auditor is most likely to confirm which of the following from the transfer agent and registrar?
A.
B.
C.
D.
30.  For a large publicly traded client the auditors' examination of capital stock accounts will not normally include:
A.
B.
C.
D.
31.  28. A primary responsibility of a registrar of capital stock is to:
A.
B.
C.
D.
32.  During an audit of a publicly-held company, the auditors should obtain written confirmation regarding debenture transactions from the
A.
B.
C.
D.
33.  The primary reason for preparing a reconciliation between interest-bearing obligations outstanding during the year and interest expense presented in the financial statements is to:
A.
B.
C.
D.
34.  . The auditor can best verify a client's bond sinking fund transactions and year-end balance by
A.
B.
C.
D.
35.  When no independent stock transfer agent is employed and the corporation issues its own stocks and maintains stock records, canceled stock certificates should:
A.
B.
C.
D.
36.  During its fiscal year, a company issued, at a discount, a substantial amount of firstmortgage bonds. When performing audit work in connection with the bond issue, the independent auditor should:
A.
B.
C.
D.
37.  33. Auditors often request that the audit client send a letter of inquiry to those attorneys who have been consulted with respect to litigation, claims, or assessments. The primary reason for this request is to provide the auditor with:
A.
B.
C.
D.
38.  . An auditor should trace corporate stock issuances and treasury stock transactions to the:
A.
B.
C.
D.
39.  An audit program for the examination of the retained earnings account should include a step that requires verification of the:
A.
B.
C.
D.
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