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NEW QUESTION: 1
An auditor observes the mailing of monthly statements to a client's customers and reviews evidence of
follow-up on errors reported by the customers. This test of controls most likely is performed to support
management's financial statement assertions of:
A. Option A
B. Option B
C. Option C
D. Option D
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Choice "C" is correct. In testing the existence or occurrence assertion, the auditor is concerned that
fictitious or overstated receivables may have been recorded. Observing the mailing of monthly statements
and reviewing evidence of follow-up on errors reported by customers provides evidence that procedures
are in place to identify and correct such errors.
Choice "A" is incorrect. Follow up of errors in monthly statements does not provide any evidence to
support understandability and classification.
Choice "B" is incorrect. Follow up of errors in monthly statements does not provide any evidence to
support understandability and classification, but does provide evidence regarding the existence of
receivables.
Choice "D" is incorrect. Follow up of errors in monthly statements does provide evidence regarding the
existence of receivables, since customers will be likely to report discrepancies.
NEW QUESTION: 2
A. Option A
B. Option D
C. Option B
D. Option C
E. Option E
Answer: A,B
NEW QUESTION: 3
Which tool and technique is used to sequence activities?
A. Decomposition
B. Project management software
C. Applying lead and lags
D. Expert judgment
Answer: C