In: Accounting
For each audit activity, identify the PCAOB assertion that matches with the activity. Each activity has one answer, but the assertions are used more than once.
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solution:
Review lease agreements for capital leases.- Rights and Obligations
Select a sample of fixed asset additions and ask to see the assets. - Existence and ccurence
Review the client's calculation of the allowance for doubtful accounts.- Valuation or Allocation
Compare sales invoice quantities to shipping document quantities to verify the client's assertion that this procedure is done by client personnel. - Completeness
Select a sample of entries in the payroll journal and match the employee name, date of payment, and amount of pay to the employee personnel file.-Completeness
Ask production and sales personnel concerning possible obsolete or slow-moving inventory.-Existence or occurence
Watch that an independent person double-checks the payroll wage rates and calculations before check are printed.-Valuation or allocation
Calculate the percentage of sales for salary and wages expense for this year and the prior year for reasonable presentation.-Valuation or occurence
Send a form to the bank for the balances of the payroll checking accounts.-Presentation and disclosure