Which of the following represents an inappropriate segregation of duties?

An auditor concludes that a client’s illegal act, which has a material effect on the financial statements, has not been properly accounted for or disclosed. Depending on the pervasiveness of the effect on the financial statements, the auditor should express either a(an)

Subsequent Events Milne Manufacturing’s fiscal year end was 12/31/X5. The auditors finished all test work on 3/15/X6, and the audit report and financial statements were publicly distributed on 3/28/X6. Consider each of the following material events and determine what action, if any, the auditor should take. Select the best action for each of the situations below. Each answer will be used only once.

Which of the following things must be considered when putting new stock into inventory?

Evidence and Assertions Below are audit procedures – five that are associated with the sales cycle and five that are associated with the purchases cycle. For each procedure, identify: The management assertion that is being tested The type of evidence gathered. Procedure Evidence Assertion Trace the monthly total recorded in the purchases journal to the general ledger to ensure all purchases were recorded. Send an email to the controller asking if any of the existing accounts receivable have been pledged as collateral. Send a letter to a sample of customers with outstanding accounts receivable asking them to verify that they have an outstanding balance as of 12/31. Using a sample of shipping records near year-end, compare the invoice date to the shipping date to ensure revenue was recorded in the proper period. Using a sample of sales invoices, compare the items sold to the associated shipping record to ensure the correct items and price were billed.

In order to form an opinion on the financial statements, the auditor should consider whether:

An automated system of perpetual inventory that records every item being added to or sold by the pharmacy is referred to as a _____ system. 

Evidence Quality Columns A & B contain audit procedures. For each set of procedures, select which one provides higher quality evidence. Answer Column A Column B Confirm receivables with a client’s customer Confirm receivables with a client’s controller Test the balance of inventory at the end of Q3 Test the balance of inventory at the end of Q4 Verify inventory quantity by reviewing documentation such as purchase orders, shipping receipts, and invoices Verify inventory quantity by physically inspecting the inventory in the client’s warehouse Test a sample of 25 invoices for accuracy Test a sample of 50 invoices for accuracy Inquire of management as to any inventory held on consignment Send a confirmation to vendors asking for information on any inventory held on consignment.

Proper separation of duties reduces the opportunities to allow any employee to be in a position to both:

Which of the following statements is not correct about materiality?