Identify Whether the Following Tests Are Tests of Controls, Substantive

question 62

Essay

Identify whether the following tests are tests of controls, substantive analytical procedures, tests of details of transactions, or tests of details of account balances.
1)Select a sample of customer receivables and send positive confirmations to each customer.
2)Examine monthly bank reconciliations for the internal auditors' initials indicating internal verification and review of the reconciliation.
3)Select a sample of entries in the sales journal and trace each to the shipping documents.
4)Compute receivable turnover and compare with previous years.
5)For a sample of new customers, determine whether credit approval was properly administered and documented.
6)Compare the dates on a sample of sales invoices with the dates of shipment and the dates the transactions were recorded in the sales journal.

Understand the influence of economic conditions on dividend policies of firms.

Explore the effects of dividend announcements on shareholder perceptions and firm valuation.

Grasp the concept and implications of residual dividend policy.

Understand the procedures and dates relevant to dividend payment and entitlement.

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Definitions:

Environmental Situation

The specific conditions, circumstances, or factors surrounding and affecting an organism or community at a particular time and place.

Consistency

The quality of achieving a level of performance or following a pattern of behavior over time, showing reliability and uniformity.

Distinctiveness

A principle in social psychology that explains how individuals highlight and perceive the unique features of a person or an object in comparison to others.

Kelley's Attribution Theory

A psychological theory that explains how individuals infer the causes of their own and others' behavior based on observed evidence and situational factors.