ACCT 401 Saudi Electronic University Accounting Worksheet

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College of Administrative and Financial Sciences
Assignment (3)
• The Assignment must be submitted on Blackboard (WORD format only) via
allocated folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation. This includes filling your information on the cover
page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No
exceptions.
• All answers must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism.
• Submissions without this cover page will NOT be accepted.
Assignment Question(s):
(Marks 5)
IMPORTANT NOTE: Answer in your own words, DO NOT COPY from slides or fellow
student.
1- Identify 4 of the 6 tests an auditor uses on the bank reconciliation? (1 Mark).
1- Trace the deposits in transit on the bank reconciliation to the cutoff bank statement.
2- Compare the outstanding checks on the bank reconciliation working paper with the canceled
checks contained in the cutoff bank statement for proper payee, amount, and endorsement.
3- Agree any charges included on the bank statement to the bank reconciliation.
4- Agree the adjusted book balance to the cash account lead schedule.
2- What is the difference between a contingent liability and a commitment? (1 Mark).
A contingent liability is an existing condition, situation, or set of circumstances involving uncertainty
as to possible loss to an entity that will ultimately be resolved by some future event.
A commitment is an agreement made by the entity to a set of fixed conditions. The conditions in a
commitment are specified in advance.
3- For each of the following situations, indicate what type of audit report is most
appropriate:
a. The auditor lacks independence in fact, but not necessarily in appearance.
Disclaimer report
b. There is a scope limitation and it is material but the overall financial statements are
still presented fairly.
Qualified report
c. The uncorrected misstatements are immaterial.
Unqualified/Unmodified report
d. There is a departure from GAAP and it is pervasively material. (2 Marks).
Adverse report
4- Distinguish between the following theories of ethical behavior:
a rights-based approach, and a justice-based approach. (1 Mark).
A rights-based approach focuses on respecting the rights of individuals. The ethical choice is the
choice that avoids violating the rights of any involved individual.
The justice-based approach is concerned with equity, fairness, and impartiality to all involved. The
ethical choice is the choice that fairly and equitably distributes resources among the individuals or
groups affected.
College of Administrative and Financial Sciences
Assignment (3)
Course Name: Auditing Principles and
Procedures
Student’s Name: Moaath
Course Code: ACCT401
Student’s ID Number: 160049609
Semester: 2nd
CRN: 20885
Academic Year: 1440/1441 H
For Instructor’s Use only
Instructor’s Name:
Students’ Grade: #
/5
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via
allocated folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation. This includes filling your information on the cover
page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No
exceptions.
• All answers must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism.
• Submissions without this cover page will NOT be accepted.
Assignment Question(s):
(Marks 5)
IMPORTANT NOTE: Answer in your own words, DO NOT COPY from slides or fellow
student.
1- Identify 4 of the 6 tests an auditor uses on the bank reconciliation? (1 Mark).
1- Trace the deposits in transit on the bank reconciliation to the cutoff bank statement.
2- Compare the outstanding checks on the bank reconciliation working paper with the canceled
checks contained in the cutoff bank statement for proper payee, amount, and endorsement.
3- Agree any charges included on the bank statement to the bank reconciliation.
4- Agree the adjusted book balance to the cash account lead schedule.
2- What is the difference between a contingent liability and a commitment? (1 Mark).
A contingent liability is an existing condition, situation, or set of circumstances involving uncertainty
as to possible loss to an entity that will ultimately be resolved by some future event.
A commitment is an agreement made by the entity to a set of fixed conditions. The conditions in a
commitment are specified in advance.
3- For each of the following situations, indicate what type of audit report is most
appropriate:
a. The auditor lacks independence in fact, but not necessarily in appearance.
Disclaimer report
b. There is a scope limitation and it is material but the overall financial statements are
still presented fairly.
Qualified report
c. The uncorrected misstatements are immaterial.
Unqualified/Unmodified report
d. There is a departure from GAAP and it is pervasively material. (2 Marks).
Adverse report
4- Distinguish between the following theories of ethical behavior:
a rights-based approach, and a justice-based approach. (1 Mark).
A rights-based approach focuses on respecting the rights of individuals. The ethical choice is the
choice that avoids violating the rights of any involved individual.
The justice-based approach is concerned with equity, fairness, and impartiality to all involved. The
ethical choice is the choice that fairly and equitably distributes resources among the individuals or
groups affected.

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