Exam 12: Audit Procedures in Response to Assessed Risks: Substantive Tests

The traditional audit focuses on the test of details of balances for income statement accounts rather than balance sheet accounts.

Substantive tests must be designed to tests specific audit objectives. REQUIRED: For the following specific audit procedures, indicate the assertion that is being tested. Use the following letters, placing your response in the space provideD. -Select vendor accounts with high activity during the year, and low balance at year-end for confirmation.

Substantive tests must be designed to tests specific audit objectives. REQUIRED: For the following specific audit procedures, indicate the assertion that is being tested. Use the following letters, placing your response in the space provideD. -Examine check register for the month following year end for disbursements relating to the audit period.

The decision on the part of the auditor to perform substantive tests during the interim period will be based upon:

Revision of the planned level of detection risk will be necessary whenever:

The balance sheet account Accounts Receivable is related to which one of the following income statement accounts?

Professional standards do not allow the performing of substantive audit procedures at an interim date.

Detection risk can be broken down into tests of controls risk and analytical procedures risk.

Under which set of circumstances may it not be necessary to perform tests of details?

The audit program is basically a list of:

Complete the summary of audit tests below by indicating the appropriate substantive tests information.

Tests of details of transactions generally use evidence from:

For some assertions, analytical procedures may be more effective in detecting misstatement than tests of detail.

Substantive tests must be designed to tests specific audit objectives. REQUIRED: For the following specific audit procedures, indicate the assertion that is being tested. Use the following letters, placing your response in the space provideD. -Examine consignment agreements.

In auditing identified related party transactions, the auditor is expected to determine whether a particular transaction would have occurred if the parties had not been related or what the exchange price and terms would have been.

When the acceptable level of detection risk for an assertion is low, the substantive tests will usually be performed at or near the balance sheet date.

Tests of details of balances generally tend to be the:

The more homogeneous the population, the smaller the sample size should be.

Substantive tests must be designed to tests specific audit objectives. REQUIRED: For the following specific audit procedures, indicate the assertion that is being tested. Use the following letters, placing your response in the space provideD. -Select high dollar items from the perpetual inventory records for inspection/counting during the physical inventory.

Substantive tests must be designed to tests specific audit objectives. REQUIRED: For the following specific audit procedures, indicate the assertion that is being tested. Use the following letters, placing your response in the space provideD. -Review bond indenture agreement and ascertain client compliance with any restrictive covenants.