Answered: What is the main purpose of auditing?…

What is the main purpose of auditing? A) To detect fraudB) To prepare budgetsC) To verify accuracy and fairness of financial statementsD) To prepare trial balances

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process

Section: Chapter Questions

Problem 21RQSC

See similar textbooks

Related questions

Q: Do not answer!!

Q: When preparing final accounts, outstanding expenses are: A) Deducted from capitalB) Shown as an…

A: Correct Answer: C) Added to expenses and shown as a liabilityWhen preparing final accounts,…

Q: No answer..

A: Net income is a key profitability metric for a company. It is calculated by subtracting total…

Q: No answer this fina

A: 1: Understand the Formula for Compound InterestWhen compounding happens more than once a year, use…

Q: No A Which market deals with long-term securities? a) Money market b) Capital market c) Derivatives…

A: The correct answer is: b) Capital market✅ Full Explanation:The capital market is the financial…

Q: Capital Introduced:The owner brings in $50,000 as additional capital in cash. What journal entry…

A: Journal Entry:Cash A/c Dr. $50,000 To Capital A/c…

Q: No A .. What is the main goal of corporate finance?

A: Explanation: What is the Main Goal of Corporate Finance?The main goal of corporate finance is to…

Q: Don't give any an

A: We have to find the current price of a bond with the following terms:Par value (Face value) =…

Q: Green Caterpillar Garden Supplies Inc. reported sales of $890,000 at the end of last year, but this…

A: If you have any problem let me know in the comment section thank you.

Q: Do not use ai Provision for Bad Debts:What is a provision for doubtful debts, and how is it recorded…

A: Provision for Doubtful Debts is an estimate of the amount of receivables (debtors) that may not be…

Q: Do not answer! Which financial instrument provides ownership in a company?A) BondB) Preferred…

A: The financial instrument that provides ownership in a company is: Explanation:Common Stock…

Q: Ledger Entry:Describe the process of posting a journal entry to the ledger.

A: The process of posting a journal entry to the ledger involves the following steps:Identify the…

Q: Right-Right Incorporated (RR) is considering the option of an extra dividend versus a share…

A: Scenario 1: Extra DividendDividend per Share = Amount Plans to Spend / No. of Shares Outstanding…

Q: What does the term "provision for doubtful debts" represent? A) IncomeB) ExpenseC) LiabilityD)…

A: Correct Answer: B) ExpenseProvision for doubtful debts is an estimated amount of accounts…

Q: If a company purchases office supplies on credit, what is the correct journal entry?A) Dr. Supplies;…

A: Correct Answer: B) Dr. Supplies; Cr. Accounts Payable ExplanationCredit-purchased office products…

Q: Which of the following will decrease the bank balance? A) Receipt from debtorB) Cash salesC) Payment…

A: Receipt from debtor implies cash received, Increases bank balance (money received)Cash sales imply…

Q: Journal Entry:Goods worth $10,000 were sold to a customer on credit. Record the journal entry.

A: Here's a detailed explanation for Error of Principle with your example, expanded in a clear…

Q: The accounting equation is: A. Assets + Liabilities = Equity B. Assets = Liabilities + Equity C.…

A: Correct Answer:B. Assets = Liabilities + EquityThis is the fundamental accounting equation showing…

Q: Income received in advance is shown as: A) AssetB) LiabilityC) RevenueD) Equity

A: Correct Answer:B) LiabilityIncome received in advance (also called unearned income) refers to money…

Q: Fuzzy Button Clothing Company Balance Sheet For the Year Ended on December 31 Assets…

A: Calculate Projected SalesThe company expects sales to grow by 19% over the previous year.Salesthis…

Q: 6a and 6b are simple essay questions. Answers can be found in the textbook.6c) If the seller…

A: 6c) Exchange Rate Risk and Hedging DecisionConclusionThe seller should use the forward market to…

Q: Do not answer any optional questions all answer will unhelpful and reported ! What is meant by…

A: The correct answer is:b) A rupee today is worth more than a rupee in futureExplanation:The time…

Q: provide scholarly reference and citation for the following Topic : People’s Republic of China (PRC)…

A: Note: Hello, student. I sincerely hope I was able to answer your question. You are free to edit…

Q: Do not use ai

A: To calculate the Net Present Value (NPV), we use the formula: NPV=∑(1+r)tRt−C0 Where: R_t = net…

Q: Which of the following is prepared first in the accounting cycle? A) Trial BalanceB) JournalC)…

A: Explanation:In the accounting cycle, the steps follow a logical order, starting from identifying and…

Q: 6. Which of the following is an error of principle? A) Posting on the wrong side of an accountB)…

A: Explanation:An error of principle occurs when a transaction is recorded in the wrong type of…

Q: Which account is debited when goods are purchased for cash? A) CashB) CapitalC) PurchasesD) Sales…

A: Explanation:When goods are purchased for cash, two accounts are involved:Purchases Account…

Q: Assets = Liabilities + ______?A) RevenueB) ExpensesC) Owner’s EquityD) Drawings

A: C) Owner's Equity is CORRECT. First, we must understand what is the accounting equation. The…

Q: Suspense Account:What is a suspense account? When is it used?i need

A: Suspense Account:A suspense account is a temporary account used in accounting to record uncertain or…

Q: Which principle requires that expenses be matched with revenues in the period in which they are…

A: Explanation:The Matching Principle is an accounting concept that requires expenses to be recorded in…

Q: The credit balance in the income summary account after closing entries indicates: A) Net lossB)…

A: Explanation:The Income Summary account is a temporary account used during the closing process in…

Q: Do not answer any this type

A: Explanation:Credit Sales = $80,000 → This increases Accounts Receivable (AR).Cash Collections =…

Q: Outstanding rent at year-end is shown as: A) AssetB) LiabilityC) IncomeD) Expenseneed help

A: Correct Answer:B) LiabilityOutstanding rent means rent that the business owes but has not yet paid…

Q: Which principle requires that expenses be recorded in the same period as the revenues they help…

A: Explanation:The Matching Principle is an accounting concept that requires expenses to be recorded in…

Q: What is the normal balance of a liability account? A) DebitB) CreditC) ZeroD) Variesneed hrlp

A: Correct Answer:B) CreditLiability accounts normally have a credit balance because they represent…

Q: solve this question i unhelp

A: Formula: NPV=∑(1+r)tCFt…

Q: No answer !

A: We are given the following cash flows and asked to calculate the Net Present Value (NPV) at a 10%…

Q: Do noi answer otherwise dislike subject accounting

A: 7. Net Income = Revenue - ExpensesNet Income = $150,000 - $120,000Net Income = $30,000 Option a:…

Q: If a business has Assets of $50,000 and Equity of $30,000, what are the Liabilities? A. $80,000 B.…

A: We use the accounting equation:Assets = Liabilities + EquityGiven:Assets = $50,000Equity =…

Q: Do not answer any blurr questions all will unhelpful!!

A: 1: Identify the Type of ProblemThis is a loan amortization problem.You're trying to calculate the…

Q: Which principle requires recording revenue when it is earned, regardless of when cash is received?…

A: Explanation:The Revenue Recognition Principle is an accounting principle that requires revenue to be…

Q: 3 An Edmonton firm has 800,000 shares outstanding at a market price of $120 a share. It wants to…

A: Step 1: Value of the firm before the offering Pre-offering market value=800,000×120=96,000,000…

Q: Suppose Cold Duck Manufacturing Inc.’s assets are fully utilized. Use the additional funds needed…

A: AFN Equation:AFN = (A∗/S0)ΔS − (L∗/S0)ΔS − M(S1)(RR) Part 1: Increase in Total AssetsThe increase in…

Q: Please no answer

A: Use the future value of an ordinary annuity formula:…

Q: No answer !!!

A: Given:Average Invested Assets = $660,000 Sales = $1,320,000 (note: likely misread previously as…

Q: 1.. What does ROI stand for? a) Return on Income b) Return on Investment c) Rate of Inflation d)…

A: Explanation:ROI (Return on Investment) is a financial metric used to measure the profitability or…

Q: The balance of the cash book is considered as: A) ExpenseB) AssetC) LiabilityD) Incomehelp

A: Step 1:Cash Book:It is a record of all cash and bank transactions.The balance in the cash book…

Q: Journalize this transaction: Owner invests $5,000 cash into the business.

A: Journal Entry:Date: [Enter actual date]Debit: Cash $5,000Credit: Owner's Capital…

Q: Final Accounts:What is the purpose of preparing final accounts? Name its three main components.need

A: Purpose of Preparing Final Accounts:The main purpose of preparing final accounts is to determine the…

Q: Which of the following is a short-term source of finance? A. Equity shares B. Debentures C. Trade…

A: Correct Answer: C. Trade credit✅ Explanation:Trade credit is a short-term source of finance where…

Question

What is the main purpose of auditing?

A) To detect fraud
B) To prepare budgets
C) To verify accuracy and fairness of financial statements
D) To prepare trial balances

Definition Definition Statement that shows the ending balance of all the ledger accounts of a firm at the end of the accounting period. The trial balance is prepared after all the entries have been posted to the ledger accounts and assists in preparing the final accounts of a firm.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Professional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.
What is the main purpose of auditing? A) To detect fraudB) To prepare budgetsC) To verify accuracy and fairness of financial statementsD) To prepare trial balances help
Need help The primary purpose of an audit is to: A) Detect all fraudB) Prepare final accountsC) Express an opinion on financial statementsD) Maintain accounting records
The primary purpose of an audit is to: A) Detect all fraudB) Prepare final accountsC) Express an opinion on financial statementsD) Maintain accounting records
In the audit of accounts receivable, the most important emphasis should be on thea. Completeness assertion.b. Existence assertion.c. Rights and obligations assertion.d. Presentation and disclosure assertion
Which is not a Risk Assessment Procedure? a. Ratio Analysis b. Observation of Activities c. Account Receivable confirmations d. Inspection of Documents e. Inquiry of Internal Auditors
Discuss the meaning of the following terms and how they apply to auditing accounts receivable: a. tie-in b. completeness c. existence d. accuracy e. rights f. realizable value g. cutoff h. classification Please provide references.
the auditor is planning to use accounts payable confirmations when auditing the client's accounts payable. The use of accounts payable confirmations will test which of the following assertions? a. rights and obligations b. existence (only) c. existence and completeness d. cutoff
In the audit of accounts payable, an auditor’s procedures will most likely focusprimarily on management’s assertion about account balances of(1) existence. (3) valuation and allocation.(2) completeness. (4) classification and understandability.
Explanation !!!! The primary purpose of an audit is to: A) Detect all fraudB) Prepare final accountsC) Express an opinion on financial statementsD) Maintain accounting records
When auditing accounts receivables, auditors are usually especially concerned about the: a. Completeness and cut-off objectives. b. Existence and completeness objectives. c. Existence, realisable-value and accuracy objectives. d. Posting and summarisation objective.
When auditing account balances of liabilities, auditors are most concerned with management’s assertion abouta. Existence.b. Rights and obligations.c. Completeness.d. Valuation and allocation.