A major concern of the auditors is obtaining evidence about the completeness of recorded accounts payable.a. Describe the reason that the auditors are concerned with the completeness of accounts payable.b. Describe three ways in which the auditors establish the completeness of accounts payable.
What will be an ideal response?
a. The auditors are concerned about completeness of accounts payable because the company's financial strength is exaggerated by an understatement of liabilities.
b. Procedures used to establish the completeness of recorded accounts payable include (only three required):
Confirmation of accounts payable.
Reconciliation of liabilities with vendor statements.
Comparison of cash payments subsequent to the balance sheet date with the accounts payable trial balance.
Investigation of unmatched invoices and unbilled receiving reports.
Investigation of invoices received subsequent to the balance sheet date.
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A. The Gap B. Neiman Marcus C. JC Penney D. Bloomingdale's E. Macy's
Diverse and global teams are one of the most consistent sources of competitive advantage for any organization.
Answer the following statement true (T) or false (F)
The primary operating goal of a publicly-owned firm trying to best serve its stockholders should be to
A. Maximize managers' own interests, which are by definition consistent with maximizing shareholders' wealth. B. Maximize the firm's expected EPS, which must also maximize the firm's price per share. C. Minimize the firm's risks because most stockholders dislike risk. In turn, this will maximize the firm's stock price. D. Use a well-structured managerial compensation package to reduce conflicts that may exist between stockholders and managers. E. Since it is impossible to measure a stock's intrinsic value, the text states that it is better for managers to attempt to maximize the current stock price than its intrinsic value.