[munchie]

This is my first time here – hoping I can get some seasoned assistance as I continue working on Auditing

2 questions:

Q #1 Which of the following controls will most likely justify a reduced assessed level of control risk for the completeness assertion for notes payable?

a) The accounting staff reviews board of director minutes for any indication of any transactions involving outstanding debt to make sure all borrowings are included in the GL.

b) All borrowings that exceed $500,000 require approval from the board of directors before loan contracts can be finalized.

c) Before approving disbursement of principal payments on notes payable, the treasurer reviews terms in the note.

d) Accounting maintains a detailed schedule of outstanding note payable that is reconciled monthly to the GL.

My thoughts were leaning toward D, but I idk anymore, I think I have overthought the issue and would appreciate some feedback.

Q#2

Which of the following internal controls is least likely to reduce risks related to the occurrence transaction-related audit objective for issuance of stock?

a) The board of directors must approve the distribution of cash dividends.

b) The issuance of any shares of stock must be pre-approved by the board of directors.

c) The company engages an independent registrar to issue stock certificates.

d) The company maintains a capital stock certificate record that includes certificate number, number of shares issued, issue date, and name of person to whom certificates are issued.

I know that letter C is required, so I didn’t think this would make sense for “least likely to reduce”. I thought Letter A.

I would appreciate any feedback. I am a bit overwhelmed with all this today.