Considerations for Assessing Internal Controls in the Revenue

School: Arizona Western College - Course: FIN 672 - Subject: Accounting

At the account and assertion level, when assessing the internal control environment, which of the following should the auditor consider? Employees Senior management Entity-wide controls Confirmations Solution The correct answer is Entity-wide controls Correct Hide solution Question 2 Which of the following is a control related to completeness in the revenue cycle? Sales made from price lists Customer acceptance requirement Reconciliation of inventory sales Policies related to returning goods Solution The correct answer is Reconciliation of inventory sales Wrong Hide solution Question 3 Which of the following is a possible test of controls related to the management of existence or occurrence in the revenue cycle (i.e., to ensure that all sales have been recorded)? Obtain confirmation from the banks Inquire with management Scan sales journals for duplicate entries

Review work performed in other audits Solution The correct answer is Scan sales journals for duplicate entries Which of the following is a control related to completeness in the revenue cycle? Sales made from price lists Valuation Reconciliation of shipping records with billing records Customer acceptance requirement Solution The correct answer is Reconciliation of shipping records with billing records Correct Hide solution Question 2 Which of the following is criteria for revenue recognition? The deal has been approved by senior management. A purchase order is required for all sales. A discount is required for all sales. Delivery has occurred or services have been rendered. Solution The correct answer is Delivery has occurred or services have been rendered. Correct