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Your father is about to retire, and he wants to buy an annuity 1. Your father is about to retire, and he wants to buy an annuity that will provide him with $85,000 of income a year for 25 years, with the first payment coming immediately. The going rate on such annuities is 5.15%. How much would it cost him to buy the annuity today? a. $1,063,968 b. $1,119,966 c. $1,178,912 d. $1,240,960 e. $1,303,008 2. You inherited an oil w ...

Other / Other 14 Apr 2016

List each of the five types of audit tests 1. List each of the five types of audit tests and list at least two types of evidence that may be obtained from each type of test. 2. Must auditors always perform tests of controls? Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help ...

Other / Other 14 Apr 2016

Which of the following statements regarding a 30-year monthly 1. Which of the following statements regarding a 15-year (180-month) $125,000, fixed-rate mortgage is CORRECT? (Ignore taxes and transactions costs.) a. The remaining balance after three years will be $125,000 less one third of the interest paid during the first three years. b. Because it is a fixed-rate mortgage, the monthly loan payments (which include both interest and pr ...

Other / Other 14 Apr 2016

After finishing the review phase of the study 1. When controls are deemed ineffective and assessed control risk is at the maximum for a private company, there will be ______ emphasis placed on tests of controls. a. no b. relatively little c. moderate d. heavy 2. Tests of controls address each of the following questions except: a. How were the procedures performed? b. Why were the procedures performed? c. Were the neces ...

Other / Other 14 Apr 2016

What is the firm's book value per share 1. Last year Jandik Corp. had $295,000 of assets, $18,750 of net income, and a debt-to-total-assets ratio of 37%. Now suppose the new CFO convinces the president to increase the debt ratio to 48%. Sales and total assets will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep ...

Other / Other 14 Apr 2016

When designing an audit program for tests of details 1. An exception in a test of control provides only an indication of the likelihood of monetary misstatements in the financial statements because tests of controls do not reveal whether monetary misstatements have actually occurred. a. True b. False 2. An exception in a substantive test of transactions provides only an indication of the likelihood of monetary misstatements in th ...

Other / Other 14 Apr 2016

When the auditor finds that there are missing controls 1. A system walkthrough is used to: a. test balances. b. test details of transactions. c. gain an understanding of internal controls. d. determine acceptance of the client. 2. (Public) PCAOB Standard 2 _______ the auditor to perform walkthroughs of significant processes. a. encourages b. requires c. does not allow d. permits 3. The most important consideration ...

Other / Other 14 Apr 2016

What is the present value of the following cash flow stream 1. Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. You need money today to start a new business, and your uncle offers to give you $120,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment? a. 6.85% b. 7.21% c. 7.59% d. 7.99% e. 8.41% 2. What annual pa ...

Other / Other 14 Apr 2016

Which of the following audit tests is usually the least costly 1. Analytical procedures are defined in the auditing standards as: a. compliance tests. b. substantive tests. c. tests of controls. d. helpful procedures not possessing the validity of other tests available to the auditor. 2. Tests of transactions are used to determine whether ___________ have been satisfied. a. compliance test requirements. b. balance covera ...

Other / Other 14 Apr 2016

Discuss the major activities and procedures performed by the auditor 1. Discuss the relationship of each of the following to the extent of planned tests of details of balances: (1) tolerable misstatement, (2) inherent risk, (3) control risk, and (4) acceptable audit risk. 2. There are seven types of audit evidence: physical examination, confirmation, documentation, observation, inquiries of the client, reperformance, and analytical p ...

Other / Other 14 Apr 2016