Question 1

If the auditor's preliminary assessment of control risk is decreased from high to medium, tests of controls can be reduced.

Accepted Answer

A) True 
 B)False

Question 2

Type(s)of evidence collected during substantive tests of transactions are:

Accepted Answer

A)  inquiries of the client. 
B)  re-performance. 
C)  documentation. 
D)  all of the above 
A)  inquiries of the client. 
B)  re-performance. 
C)  documentation. 
D)  all of the above

Question 3

After finishing the review phase of the study and evaluation of internal control in an audit engagement, the auditor should perform tests of controls on:

Accepted Answer

A)  those controls that have a material effect upon the financial statement balances. 
B)  a random sample of the controls that were reviewed. 
C)  those controls that the auditor plans to rely upon. 
D)  those controls in which significant deficiencies were identified. 
A)  those controls that have a material effect upon the financial statement balances. 
B)  a random sample of the controls that were reviewed. 
C)  those controls that the auditor plans to rely upon. 
D)  those controls in which significant deficiencies were identified.

Question 4

There are three stages of the audit in which analytical procedures are performed.Please identify each of these three stages, and for each stage, discuss the purpose of performing analytical procedures in that stage.

Accepted Answer

Analytical procedures are performed in t

Question 5

Auditing standards require that tests of controls be performed on every audit engagement.

Accepted Answer

A) True 
 B)False

Question 6

The timing of phase III audit procedures are typically:

Accepted Answer

A)  before the balance sheet date. 
B)  on or after the balance sheet date. 
C)  anytime. 
D)  at the end of fieldwork. 
A)  before the balance sheet date. 
B)  on or after the balance sheet date. 
C)  anytime. 
D)  at the end of fieldwork.

Question 7

Material dollar misstatements are more likely to exist in the financial statements when control test deviations are considered to be insignificant deficiencies.

Accepted Answer

A) True 
 B)False

Question 8

The audit client is a medium size business with some controls and a few inherent risks.Discuss the audit evidence mix appropriate for this client.

Accepted Answer

The auditor will do a medium amount of t

Question 9

Which of the following is correct when controls are effective and assessed control risk is low?

Accepted Answer

A)  There will be heavy emphasis on tests of controls. 
B)  Some substantive tests of transactions will still be performed. 
C)  Only substantive tests of transactions will be used. 
D)  both A and B 
A)  There will be heavy emphasis on tests of controls. 
B)  Some substantive tests of transactions will still be performed. 
C)  Only substantive tests of transactions will be used. 
D)  both A and B

Question 10

Accumulating final evidence in phase IV of the audit includes analytical procedures.

Accepted Answer

A) True 
 B)False

Question 11

Discuss the assumptions and predictions an auditor needs to make when designing an audit program for tests of details of balances.Why are these assumptions and predictions necessary?

Accepted Answer

Since the audit program for tests of det

Question 12

The auditor is required to communicate material deficiencies in internal control to the audit committee or senior management.

Accepted Answer

A) True 
 B)False

Question 13

A listing of all the things which the auditor will do to gather sufficient, competent evidence is the:

Accepted Answer

A)  audit procedure. 
B)  audit plan. 
C)  audit risk model. 
D)  audit program. 
A)  audit procedure. 
B)  audit plan. 
C)  audit risk model. 
D)  audit program.

Question 14

If no material differences are found using analytical procedures, and the auditor concludes that misstatements are not likely to have occurred, then:

Accepted Answer

A)  the number or extent of tests of details of balances may be reduced. 
B)  it will be necessary to increase the tests of transactions. 
C)  it will be necessary to increase the tests of balances. 
D)  it will not be necessary to perform tests of balances. 
A)  the number or extent of tests of details of balances may be reduced. 
B)  it will be necessary to increase the tests of transactions. 
C)  it will be necessary to increase the tests of balances. 
D)  it will not be necessary to perform tests of balances.

Question 15

Audit programs are never computerised as they are unique to each client.

Accepted Answer

A) True 
 B)False

Question 16

What factors should the auditor consider when assessing whether to perform substantive tests of final balances before the balance sheet date?

Accepted Answer

The auditor must consider whether additi

Question 17

Discuss the purposes of (1)substantive tests of transactions, (2)tests of controls, and (3)tests of details of balances.Give an example of each.

Accepted Answer

The purpose of substantive tests of tran

Question 18

When the auditor plans to use analytical procedures to provide substantive assurance about an account balance, the data used in the calculations must be considered:

Accepted Answer

A)  sufficiently reliable. 
B)  reasonable. 
C)  absolutely reliable. 
D)  sufficiently appropriate. 
A)  sufficiently reliable. 
B)  reasonable. 
C)  absolutely reliable. 
D)  sufficiently appropriate.

Question 19

The extent of tests of details of balances can be reduced when transaction-related audit objectives have been satisfied by tests of controls or substantive tests of transactions.

Accepted Answer

A) True 
 B)False

Question 20

In the context of an audit of financial statements, substantive tests are audit procedures that:

Accepted Answer

A)  assess the detection risk of each audit objective. 
B)  assess the control risk for each audit objective. 
C)  test whether transactions are correct. 
D)  test for dollar misstatements. 
A)  assess the detection risk of each audit objective. 
B)  assess the control risk for each audit objective. 
C)  test whether transactions are correct. 
D)  test for dollar misstatements.

If the auditor's preliminary assessment of control risk is decreased from high to medium, tests of controls can be reduced.

Type(s)of evidence collected during substantive tests of transactions are:

After finishing the review phase of the study and evaluation of internal control in an audit engagement, the auditor should perform tests of controls on:

There are three stages of the audit in which analytical procedures are performed.Please identify each of these three stages, and for each stage, discuss the purpose of performing analytical procedures in that stage.

Auditing standards require that tests of controls be performed on every audit engagement.

The timing of phase III audit procedures are typically:

Material dollar misstatements are more likely to exist in the financial statements when control test deviations are considered to be insignificant deficiencies.

The audit client is a medium size business with some controls and a few inherent risks.Discuss the audit evidence mix appropriate for this client.

Which of the following is correct when controls are effective and assessed control risk is low?

Accumulating final evidence in phase IV of the audit includes analytical procedures.

Discuss the assumptions and predictions an auditor needs to make when designing an audit program for tests of details of balances.Why are these assumptions and predictions necessary?

The auditor is required to communicate material deficiencies in internal control to the audit committee or senior management.

A listing of all the things which the auditor will do to gather sufficient, competent evidence is the:

If no material differences are found using analytical procedures, and the auditor concludes that misstatements are not likely to have occurred, then:

Audit programs are never computerised as they are unique to each client.

What factors should the auditor consider when assessing whether to perform substantive tests of final balances before the balance sheet date?

Discuss the purposes of (1)substantive tests of transactions, (2)tests of controls, and (3)tests of details of balances.Give an example of each.

When the auditor plans to use analytical procedures to provide substantive assurance about an account balance, the data used in the calculations must be considered:

The extent of tests of details of balances can be reduced when transaction-related audit objectives have been satisfied by tests of controls or substantive tests of transactions.

In the context of an audit of financial statements, substantive tests are audit procedures that:

Demand for audit and assurance services

Auditors’ legal environment

Audit quality and ethics

Audit responsibilities and objectives

Audit evidence

Audit planning and documentation

Materiality and risk

Internal control and control risk

Fraud auditing

The impact of information technology on the audit process

Audit of the sales and collection cycle: Tests of controls and substantive tests of transactions

Completing tests in the sales and collection cycle: Accounts receivable

Audit sampling

Audit of transaction cycles and financial statement balances I

Audit of transaction cycles and financial statement balances II

Completing the audit

Audit reporting

Other auditing and assurance engagements

Filters

Exam 11: Overall audit plan and audit program

If the auditor's preliminary assessment of control risk is decreased from high to medium, tests of controls can be reduced.

Type(s)of evidence collected during substantive tests of transactions are:

After finishing the review phase of the study and evaluation of internal control in an audit engagement, the auditor should perform tests of controls on:

There are three stages of the audit in which analytical procedures are performed.Please identify each of these three stages, and for each stage, discuss the purpose of performing analytical procedures in that stage.

Auditing standards require that tests of controls be performed on every audit engagement.

The timing of phase III audit procedures are typically:

Material dollar misstatements are more likely to exist in the financial statements when control test deviations are considered to be insignificant deficiencies.

The audit client is a medium size business with some controls and a few inherent risks.Discuss the audit evidence mix appropriate for this client.

Which of the following is correct when controls are effective and assessed control risk is low?

Accumulating final evidence in phase IV of the audit includes analytical procedures.

Discuss the assumptions and predictions an auditor needs to make when designing an audit program for tests of details of balances.Why are these assumptions and predictions necessary?

The auditor is required to communicate material deficiencies in internal control to the audit committee or senior management.

A listing of all the things which the auditor will do to gather sufficient, competent evidence is the:

If no material differences are found using analytical procedures, and the auditor concludes that misstatements are not likely to have occurred, then:

Audit programs are never computerised as they are unique to each client.

What factors should the auditor consider when assessing whether to perform substantive tests of final balances before the balance sheet date?

Discuss the purposes of (1)substantive tests of transactions, (2)tests of controls, and (3)tests of details of balances.Give an example of each.

When the auditor plans to use analytical procedures to provide substantive assurance about an account balance, the data used in the calculations must be considered:

The extent of tests of details of balances can be reduced when transaction-related audit objectives have been satisfied by tests of controls or substantive tests of transactions.

In the context of an audit of financial statements, substantive tests are audit procedures that:

Demand for audit and assurance services

Auditors’ legal environment

Audit quality and ethics

Audit responsibilities and objectives

Audit evidence

Audit planning and documentation

Materiality and risk

Internal control and control risk

Fraud auditing

The impact of information technology on the audit process

Audit of the sales and collection cycle: Tests of controls and substantive tests of transactions

Completing tests in the sales and collection cycle: Accounts receivable

Audit sampling

Audit of transaction cycles and financial statement balances I

Audit of transaction cycles and financial statement balances II

Completing the audit

Audit reporting

Other auditing and assurance engagements

Filters