Question 1

Which of the following assessments are affected by substantive tests of transactions?

Accepted Answer

A)  both acceptable audit risk and control risk 
B)  both control risk and planned detection risk 
C)  both inherent risk and control risk 
D)  both inherent risk and planned detection risk 
A)  both acceptable audit risk and control risk 
B)  both control risk and planned detection risk 
C)  both inherent risk and control risk 
D)  both inherent risk and planned detection risk

Question 2

After performing a study and evaluation of the client's system of internal control, an auditor concludes that the system is well designed and functioning as anticipated.Under these circumstances, the auditor would most likely:

Accepted Answer

A)  perform all tests of controls to the extent outlined in the preplanned audit program. 
B)  not increase the extent of predetermined substantive tests. 
C)  cease to perform further substantive tests. 
D)  increase the extent of anticipated analytical review procedures. 
A)  perform all tests of controls to the extent outlined in the preplanned audit program. 
B)  not increase the extent of predetermined substantive tests. 
C)  cease to perform further substantive tests. 
D)  increase the extent of anticipated analytical review procedures.

Question 3

Tests of controls are directed toward the control's:

Accepted Answer

A)  efficiency. 
B)  effectiveness. 
C)  efficiency and effectiveness. 
D)  cost benefit ratio. 
A)  efficiency. 
B)  effectiveness. 
C)  efficiency and effectiveness. 
D)  cost benefit ratio.

Question 4

When controls are effectively designed, the auditor assesses control risk:

Accepted Answer

A)  At a level that does not reflect the effectiveness of those controls. 
B)  at a level that reflects the effectiveness of those controls. 
C)  at a reduced level, as the controls are effective. 
D)  all of the above 
A)  At a level that does not reflect the effectiveness of those controls. 
B)  at a level that reflects the effectiveness of those controls. 
C)  at a reduced level, as the controls are effective. 
D)  all of the above

Question 5

Which one of the following types of evidence would NOT be obtained in tests of controls?

Accepted Answer

A)  re-performance 
B)  inquiry of the client 
C)  documentation 
D)  physical examination 
A)  re-performance 
B)  inquiry of the client 
C)  documentation 
D)  physical examination

Question 6

Which one of the following steps is NOT performed at the completion phase of an audit?

Accepted Answer

A)  final review of the auditor's working papers 
B)  review for contingent liabilities 
C)  final adjustments to the audit program 
D)  review for subsequent events 
A)  final review of the auditor's working papers 
B)  review for contingent liabilities 
C)  final adjustments to the audit program 
D)  review for subsequent events

Question 7

Which of the following explains why many auditors perform extensive analytical procedures on all audits?

Accepted Answer

A)  They pinpoint errors in accounts. 
B)  They are relatively inexpensive. 
C)  It is required by the auditing standards. 
D)  all of the above 
A)  They pinpoint errors in accounts. 
B)  They are relatively inexpensive. 
C)  It is required by the auditing standards. 
D)  all of the above

Question 8

ASA 315 refers to the benefits and risks related to internal controls present in an IT system.What are the implications for the auditor in conducting tests of controls and substantive tests?

Accepted Answer

The implications are that significant in

Question 9

In which stage(s)of an audit can analytical procedures be performed?

Accepted Answer

A)  in conjunction with tests of transactions and tests of details of balances 
B)  in the completion stage 
C)  in the planning stage 
D)  all of the above 
A)  in conjunction with tests of transactions and tests of details of balances 
B)  in the completion stage 
C)  in the planning stage 
D)  all of the above

Question 10

Describe the five types of audit tests used to determine whether financial statements are stated fairly.Identify which of the five types are substantive tests and which are used to reduce assessed control risk.

Accepted Answer

The five types of audit tests used to de

Question 11

The audit procedure re-performance always simultaneously provides evidence about both internal control effectiveness and monetary correctness.

Accepted Answer

A) True 
 B)False

Question 12

Which one of the following audit tests is usually the LEAST costly to perform?

Accepted Answer

A)  analytical procedures 
B)  tests of balances 
C)  tests of controls 
D)  substantive tests of transactions 
A)  analytical procedures 
B)  tests of balances 
C)  tests of controls 
D)  substantive tests of transactions

Question 13

Analytical procedures are relatively inexpensive, so many auditors perform them on all audits.

Accepted Answer

A) True 
 B)False

Question 14

At interim dates, an auditor evaluates a client's internal accounting control procedures and finds them to be effective.The auditor then performs a substantial part of the audit engagement on a continuous basis throughout the year.At a minimum, the auditor's year-end audit procedures must include:

Accepted Answer

A)  confirmation of year-end accounts that were examined at interim dates. 
B)  determination that the client's internal accounting control procedures are still effective at year end. 
C)  comparison of the responses to the auditor's internal control questionnaire with a detailed flowchart at year-end. 
D)  tests of compliance with internal control in the same manner as those tests made at the interim dates. 
A)  confirmation of year-end accounts that were examined at interim dates. 
B)  determination that the client's internal accounting control procedures are still effective at year end. 
C)  comparison of the responses to the auditor's internal control questionnaire with a detailed flowchart at year-end. 
D)  tests of compliance with internal control in the same manner as those tests made at the interim dates.

Question 15

Presentation- and disclosure-related objectives are more important in phase IV of the audit.

Accepted Answer

A) True 
 B)False

Question 16

Phase IV of the audit primarily relies on which type(s)of audit evidence?

Accepted Answer

A)  analytical procedures 
B)  inquiries of client 
C)  documentation 
D)  all of the above 
A)  analytical procedures 
B)  inquiries of client 
C)  documentation 
D)  all of the above

Question 17

Which one of the following is NOT a direct outcome of performing analytical procedures?

Accepted Answer

A)  Understand the client's business. 
B)  Reduce detailed audit tests. 
C)  Assess the entity's ability to continue as a going concern. 
D)  Identify specific errors in the accounts. 
A)  Understand the client's business. 
B)  Reduce detailed audit tests. 
C)  Assess the entity's ability to continue as a going concern. 
D)  Identify specific errors in the accounts.

Question 18

ASA 520 states that analytical procedures can be used as:

Accepted Answer

A)  compliance tests. 
B)  tests of controls. 
C)  substantive tests. 
D)  helpful procedures not possessing the validity of other tests available to the auditor. 
A)  compliance tests. 
B)  tests of controls. 
C)  substantive tests. 
D)  helpful procedures not possessing the validity of other tests available to the auditor.

Question 19

When designing an audit program for tests of details of balances, the auditor should make assumptions about inherent risk and control risk, as well as predictions concerning the outcome of tests of controls, substantive tests of transactions, and analytical procedures.

Accepted Answer

A) True 
 B)False

Question 20

Events occurring after the date of the balance sheet but before the issuance of the financial statements and auditor's report are referred to as:

Accepted Answer

A)  interim events. 
B)  post-closing events. 
C)  pre-audit events. 
D)  subsequent events. 
A)  interim events. 
B)  post-closing events. 
C)  pre-audit events. 
D)  subsequent events.

Which of the following assessments are affected by substantive tests of transactions?

After performing a study and evaluation of the client's system of internal control, an auditor concludes that the system is well designed and functioning as anticipated.Under these circumstances, the auditor would most likely:

Tests of controls are directed toward the control's:

When controls are effectively designed, the auditor assesses control risk:

Which one of the following types of evidence would NOT be obtained in tests of controls?

Which one of the following steps is NOT performed at the completion phase of an audit?

Which of the following explains why many auditors perform extensive analytical procedures on all audits?

ASA 315 refers to the benefits and risks related to internal controls present in an IT system.What are the implications for the auditor in conducting tests of controls and substantive tests?

In which stage(s)of an audit can analytical procedures be performed?

Describe the five types of audit tests used to determine whether financial statements are stated fairly.Identify which of the five types are substantive tests and which are used to reduce assessed control risk.

The audit procedure re-performance always simultaneously provides evidence about both internal control effectiveness and monetary correctness.

Which one of the following audit tests is usually the LEAST costly to perform?

Analytical procedures are relatively inexpensive, so many auditors perform them on all audits.

At interim dates, an auditor evaluates a client's internal accounting control procedures and finds them to be effective.The auditor then performs a substantial part of the audit engagement on a continuous basis throughout the year.At a minimum, the auditor's year-end audit procedures must include:

Presentation- and disclosure-related objectives are more important in phase IV of the audit.

Phase IV of the audit primarily relies on which type(s)of audit evidence?

Which one of the following is NOT a direct outcome of performing analytical procedures?

ASA 520 states that analytical procedures can be used as:

When designing an audit program for tests of details of balances, the auditor should make assumptions about inherent risk and control risk, as well as predictions concerning the outcome of tests of controls, substantive tests of transactions, and analytical procedures.

Events occurring after the date of the balance sheet but before the issuance of the financial statements and auditor's report are referred to as:

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

Which of the following assessments are affected by substantive tests of transactions?

After performing a study and evaluation of the client's system of internal control, an auditor concludes that the system is well designed and functioning as anticipated.Under these circumstances, the auditor would most likely:

Tests of controls are directed toward the control's:

When controls are effectively designed, the auditor assesses control risk:

Which one of the following types of evidence would NOT be obtained in tests of controls?

Which one of the following steps is NOT performed at the completion phase of an audit?

Which of the following explains why many auditors perform extensive analytical procedures on all audits?

ASA 315 refers to the benefits and risks related to internal controls present in an IT system.What are the implications for the auditor in conducting tests of controls and substantive tests?

In which stage(s)of an audit can analytical procedures be performed?

Describe the five types of audit tests used to determine whether financial statements are stated fairly.Identify which of the five types are substantive tests and which are used to reduce assessed control risk.

The audit procedure re-performance always simultaneously provides evidence about both internal control effectiveness and monetary correctness.

Which one of the following audit tests is usually the LEAST costly to perform?

Analytical procedures are relatively inexpensive, so many auditors perform them on all audits.

At interim dates, an auditor evaluates a client's internal accounting control procedures and finds them to be effective.The auditor then performs a substantial part of the audit engagement on a continuous basis throughout the year.At a minimum, the auditor's year-end audit procedures must include:

Presentation- and disclosure-related objectives are more important in phase IV of the audit.

Phase IV of the audit primarily relies on which type(s)of audit evidence?

Which one of the following is NOT a direct outcome of performing analytical procedures?

ASA 520 states that analytical procedures can be used as:

When designing an audit program for tests of details of balances, the auditor should make assumptions about inherent risk and control risk, as well as predictions concerning the outcome of tests of controls, substantive tests of transactions, and analytical procedures.

Events occurring after the date of the balance sheet but before the issuance of the financial statements and auditor's report are referred to as:

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