Question 1

Techniques that involve the auditor's use of computers to assist in verification are known as software-assisted _______ techniques.

Accepted Answer

Audit | audit

Question 2

The procedure that involves the auditor performing the control in the same manner as an employee in order to test its effectiveness is known as _______.

Accepted Answer

Reperformance | reperformance

Question 3

The tolerable deviation rate _______.

Accepted Answer

A) is the maximum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk 
B) is the minimum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk 
C) refers to the extent that audit fees can go over the roughly agreed amount 
D) relates to how many immaterial misstatements the auditor finds 
A) is the maximum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk 
B) is the minimum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk 
C) refers to the extent that audit fees can go over the roughly agreed amount 
D) relates to how many immaterial misstatements the auditor finds A

Question 4

Internal controls can _______.

Accepted Answer

A) only include certain procedures approved by management and the auditor 
B) include any procedure used and relied upon by the client to prevent errors from occurring when processing transactions, or to detect and correct errors that may occur in these transactions 
C) include any procedure used and relied upon by the auditor to prevent errors from occurring when processing transactions, or to detect and correct errors that may occur in these transactions 
D) never be subject to senior management override 
A) only include certain procedures approved by management and the auditor 
B) include any procedure used and relied upon by the client to prevent errors from occurring when processing transactions, or to detect and correct errors that may occur in these transactions 
C) include any procedure used and relied upon by the auditor to prevent errors from occurring when processing transactions, or to detect and correct errors that may occur in these transactions 
D) never be subject to senior management override

Question 5

_______ are a combination of testing procedures that provides the evidence that the control operated as intended throughout the period the auditor wishes to place reliance on the control.
[Tests of controls] | Observational methods | Inquiry controls | Inspection of physical evidence

Accepted Answer

The answer of _______ are a combination of testing procedures...

Question 6

Processing auditor test data using the client's software application _______.

Accepted Answer

A) will allow the auditor to verify that the software application is functioning as designed 
B) will allow the auditor to verify manual controls within the software application are functioning as designed 
C) may corrupt the client's system, and should not be attempted 
D) should be performed without the knowledge of the client's senior management 
A) will allow the auditor to verify that the software application is functioning as designed 
B) will allow the auditor to verify manual controls within the software application are functioning as designed 
C) may corrupt the client's system, and should not be attempted 
D) should be performed without the knowledge of the client's senior management

Question 7

_______ rate is the maximum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk.
[Tolerable deviation] | Expected deviation | Attribute sampling | Investigation

Accepted Answer

The answer of _______ rate is the maximum rate of...

Question 8

The auditor begins selecting controls to test by _______.

Accepted Answer

A) asking management which controls they would prefer the auditor to test 
B) checking the same controls as the prior year 
C) by understanding the entity and the business and determining the risk of material fraud or error at the financial statement level 
D) by understanding the entity and all other industries and determining the risk of material fraud or error at the financial statement level 
A) asking management which controls they would prefer the auditor to test 
B) checking the same controls as the prior year 
C) by understanding the entity and the business and determining the risk of material fraud or error at the financial statement level 
D) by understanding the entity and all other industries and determining the risk of material fraud or error at the financial statement level

Question 9

Inquiry _______.

Accepted Answer

A) alone would be considered quality audit evidence 
B) would not be considered quality audit evidence 
C) should not be used in conjunction with other audit procedures 
D) involves making inquiries of prior auditors 
A) alone would be considered quality audit evidence 
B) would not be considered quality audit evidence 
C) should not be used in conjunction with other audit procedures 
D) involves making inquiries of prior auditors

Question 10

When designing tests of controls, consideration is given to _______ with the transaction (the risk of material misstatement) at the assertion level.

Accepted Answer

WCGW | what can go w

Question 11

Detection controls are those applied before transactions have been processed to identify whether fraud or errors have occurred.

Accepted Answer

A) True 
 B)False

Question 12

Prevention controls are those applied to each transaction during normal processing that are intended to stop fraud or errors from occurring.

Accepted Answer

A) True 
 B)False

Question 13

With respect to timing, tests of controls _______.

Accepted Answer

A) are usually carried out after the firm's financial statement date 
B) are usually carried at the firm's financial statement date 
C) will usually be carried out at an interim date, often about three months prior to year-end 
D) will usually be carried out at an interim date, often about six months prior to year-end 
A) are usually carried out after the firm's financial statement date 
B) are usually carried at the firm's financial statement date 
C) will usually be carried out at an interim date, often about three months prior to year-end 
D) will usually be carried out at an interim date, often about six months prior to year-end

Question 14

Regardless of how the working papers are prepared and documented, _______.

Accepted Answer

A) the extent of the auditor's documentation will increase as the complexity of the client's operations, systems, and controls increases 
B) the extent of the auditor's documentation will decrease as the complexity of the client's operations, systems, and controls increases 
C) the extent of the auditor's documentation will increase as the complexity of the client's operations, systems, and controls decrease 
D) the extent of the auditor's documentation will decrease as the complexity of the client's operations, systems, and controls decrease 
A) the extent of the auditor's documentation will increase as the complexity of the client's operations, systems, and controls increases 
B) the extent of the auditor's documentation will decrease as the complexity of the client's operations, systems, and controls increases 
C) the extent of the auditor's documentation will increase as the complexity of the client's operations, systems, and controls decrease 
D) the extent of the auditor's documentation will decrease as the complexity of the client's operations, systems, and controls decrease

Question 15

In the audit of a private company, _______.

Accepted Answer

A) an auditor's tests of controls are unrelated to the planned audit strategy 
B) an auditor's tests of controls are largely dictated by the planned audit strategy 
C) the auditor is not subject to reporting and notification requirements 
D) the auditors should preemptively determine the entities ability to pay for the audit and request a certain percentage in advance 
A) an auditor's tests of controls are unrelated to the planned audit strategy 
B) an auditor's tests of controls are largely dictated by the planned audit strategy 
C) the auditor is not subject to reporting and notification requirements 
D) the auditors should preemptively determine the entities ability to pay for the audit and request a certain percentage in advance

Question 16

Attribute sampling is a technique used to reach a conclusion about a sample in terms of a rate of occurrence.

Accepted Answer

A) True 
 B)False

Question 17

Evaluate the following "procedures" section from a tests of controls working paper:
Work performed:
Selected several bank reconciliations from different months and matched to supporting documentation.Ensured the reconciliations had been prepared and reviewed on a timely basis.

Accepted Answer

This working paper section is insufficie

Question 18

In order to determine the extent of testing of controls, _______.

Accepted Answer

A) the auditor should inquire of management as to their preferences 
B) the auditor can use statistically based sampling techniques only 
C) the auditor can use either statistically based sampling techniques or nonstatistical techniques 
D) the auditor can use non nonstatistical techniques only 
A) the auditor should inquire of management as to their preferences 
B) the auditor can use statistically based sampling techniques only 
C) the auditor can use either statistically based sampling techniques or nonstatistical techniques 
D) the auditor can use non nonstatistical techniques only

Question 19

Which of the following controls are designed to prevent misstatements from happening (prevent controls) and / or detect and correct misstatements on a timely basis (detect controls)?

Accepted Answer

A) Internal controls 
B) External controls 
C) Entity-level controls 
D) Transaction-level controls 
A) Internal controls 
B) External controls 
C) Entity-level controls 
D) Transaction-level controls

Question 20

The auditors should plan to test each and every control.

Accepted Answer

A) True 
 B)False

Techniques that involve the auditor's use of computers to assist in verification are known as software-assisted _______ techniques.

The procedure that involves the auditor performing the control in the same manner as an employee in order to test its effectiveness is known as _______.

The tolerable deviation rate _______.

Internal controls can _______.

_______ are a combination of testing procedures that provides the evidence that the control operated as intended throughout the period the auditor wishes to place reliance on the control. [Tests of controls] | Observational methods | Inquiry controls | Inspection of physical evidence

Processing auditor test data using the client's software application _______.

_______ rate is the maximum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk. [Tolerable deviation] | Expected deviation | Attribute sampling | Investigation

The auditor begins selecting controls to test by _______.

Inquiry _______.

When designing tests of controls, consideration is given to _______ with the transaction (the risk of material misstatement) at the assertion level.

Detection controls are those applied before transactions have been processed to identify whether fraud or errors have occurred.

Prevention controls are those applied to each transaction during normal processing that are intended to stop fraud or errors from occurring.

With respect to timing, tests of controls _______.

Regardless of how the working papers are prepared and documented, _______.

In the audit of a private company, _______.

Attribute sampling is a technique used to reach a conclusion about a sample in terms of a rate of occurrence.

Evaluate the following "procedures" section from a tests of controls working paper: Work performed: Selected several bank reconciliations from different months and matched to supporting documentation.Ensured the reconciliations had been prepared and reviewed on a timely basis.

In order to determine the extent of testing of controls, _______.

Which of the following controls are designed to prevent misstatements from happening (prevent controls) and / or detect and correct misstatements on a timely basis (detect controls)?

The auditors should plan to test each and every control.

Introduction and Overview of Audit and Assurance

Professionalism, Ethics and Legal Liability

Risk Assessment Part Iaudit Risk and Audit Strategy

Risk Assessment Part Iiunderstanding the Client

Audit Evidence

Understanding of the Clients System of Internal Controls

Data Analyticsoverview and Application

Risk Responseperforming Substantive Procedures

Risk Responseaudit Sampling for Substantive Testing

Auditing the Revenue Cycle

Auditing the Purchases Cycle and Payroll Cycle

Auditing Cash, Inventory, Investing and Financing Activities

Completing the Audit

Reporting on the Audit

Filters

Exam 8: Risk Responseperforming Tests of Controls

Techniques that involve the auditor's use of computers to assist in verification are known as software-assisted _______ techniques.

The procedure that involves the auditor performing the control in the same manner as an employee in order to test its effectiveness is known as _______.

The tolerable deviation rate _______.

Internal controls can _______.

_______ are a combination of testing procedures that provides the evidence that the control operated as intended throughout the period the auditor wishes to place reliance on the control. [Tests of controls] | Observational methods | Inquiry controls | Inspection of physical evidence

Processing auditor test data using the client's software application _______.

_______ rate is the maximum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk. [Tolerable deviation] | Expected deviation | Attribute sampling | Investigation

The auditor begins selecting controls to test by _______.

Inquiry _______.

When designing tests of controls, consideration is given to _______ with the transaction (the risk of material misstatement) at the assertion level.

Detection controls are those applied before transactions have been processed to identify whether fraud or errors have occurred.

Prevention controls are those applied to each transaction during normal processing that are intended to stop fraud or errors from occurring.

With respect to timing, tests of controls _______.

Regardless of how the working papers are prepared and documented, _______.

In the audit of a private company, _______.

Attribute sampling is a technique used to reach a conclusion about a sample in terms of a rate of occurrence.

Evaluate the following "procedures" section from a tests of controls working paper: Work performed: Selected several bank reconciliations from different months and matched to supporting documentation.Ensured the reconciliations had been prepared and reviewed on a timely basis.

In order to determine the extent of testing of controls, _______.

Which of the following controls are designed to prevent misstatements from happening (prevent controls) and / or detect and correct misstatements on a timely basis (detect controls)?

The auditors should plan to test each and every control.

Introduction and Overview of Audit and Assurance

Professionalism, Ethics and Legal Liability

Risk Assessment Part Iaudit Risk and Audit Strategy

Risk Assessment Part Iiunderstanding the Client

Audit Evidence

Understanding of the Clients System of Internal Controls

Data Analyticsoverview and Application

Risk Responseperforming Substantive Procedures

Risk Responseaudit Sampling for Substantive Testing

Auditing the Revenue Cycle

Auditing the Purchases Cycle and Payroll Cycle

Auditing Cash, Inventory, Investing and Financing Activities

Completing the Audit

Reporting on the Audit

Filters