Question 1

The purpose of tests of controls is to provide reasonable assurance that the

Accepted Answer

A)  accounting treatment of transactions and balances is valid and proper. 
B)  accounting control procedures are operating effectively. 
C)  entity has complied with the disclosure requirements of a generally accepted accounting framework. 
D)  entity has complied with requirements of quality control. 
A)  accounting treatment of transactions and balances is valid and proper. 
B)  accounting control procedures are operating effectively. 
C)  entity has complied with the disclosure requirements of a generally accepted accounting framework. 
D)  entity has complied with requirements of quality control.

Question 2

When considering the relationships between types of audit tests and evidence, which of the following procedures are used for both obtaining an understanding of internal control and for conducting tests of controls?

Accepted Answer

A)  inspection, recalculation, observation, inquiry, and reperformance 
B)  inspection, recalculation, external confirmation, and reperformance 
C)  recalculation, observation, inquiry, analytical procedures, and reperformance 
D)  analytical procedures, inspection, recalculation, and reperformance 
A)  inspection, recalculation, observation, inquiry, and reperformance 
B)  inspection, recalculation, external confirmation, and reperformance 
C)  recalculation, observation, inquiry, analytical procedures, and reperformance 
D)  analytical procedures, inspection, recalculation, and reperformance

Question 3

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

Accepted Answer

A)  analytical procedures 
B)  tests of controls 
C)  tests of details of balances 
D)  procedures to obtain an understanding of internal control 
A)  analytical procedures 
B)  tests of controls 
C)  tests of details of balances 
D)  procedures to obtain an understanding of internal control

Question 4

Performance of tests of controls provide evidence in support of the specific controls that contribute to the auditor's assessed control risk (where it is reduced below 100%). Also, when dual-purpose tests are used, evidence is also obtained in support of

Accepted Answer

A)  the nature of illegal acts that occurred. 
B)  the quantitative effects of fraud risks. 
C)  statistical ratios to assist analytical review. 
D)  monetary correctness of transactions. 
A)  the nature of illegal acts that occurred. 
B)  the quantitative effects of fraud risks. 
C)  statistical ratios to assist analytical review. 
D)  monetary correctness of transactions.

Question 5

The auditor verifies the summarizing, accuracy, and posting of entries by performing

Accepted Answer

A)  analytical procedures. 
B)  tests of controls. 
C)  dual-purpose tests. 
D)  procedures to gain an understanding of internal control. 
A)  analytical procedures. 
B)  tests of controls. 
C)  dual-purpose tests. 
D)  procedures to gain an understanding of internal control.

Question 6

The auditor has completed analyzing the results of tests of details of the accounts receivable ending balance. Errors totaling $25 000 were found. These exceptions are

Accepted Answer

A)  indications that the credit limit is being incorrectly applied. 
B)  probably cutoff errors that can be explained. 
C)  an indication of potential errors in the ending balance. 
D)  financial statement misstatements. 
A)  indications that the credit limit is being incorrectly applied. 
B)  probably cutoff errors that can be explained. 
C)  an indication of potential errors in the ending balance. 
D)  financial statement misstatements.

Question 7

The highest-cost audit will be incurred when the auditor expects that the internal control system would

Accepted Answer

A)  be effective but the auditor found extensive control test deviations. 
B)  have few effective controls but client's personnel were well-trained and knowledgeable. 
C)  be very sophisticated and the tests of controls confirmed this. 
D)  have few effective controls and tests of balances found many errors. 
A)  be effective but the auditor found extensive control test deviations. 
B)  have few effective controls but client's personnel were well-trained and knowledgeable. 
C)  be very sophisticated and the tests of controls confirmed this. 
D)  have few effective controls and tests of balances found many errors.

The purpose of tests of controls is to provide reasonable assurance that the

When considering the relationships between types of audit tests and evidence, which of the following procedures are used for both obtaining an understanding of internal control and for conducting tests of controls?

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

Performance of tests of controls provide evidence in support of the specific controls that contribute to the auditor's assessed control risk (where it is reduced below 100%). Also, when dual-purpose tests are used, evidence is also obtained in support of

The auditor verifies the summarizing, accuracy, and posting of entries by performing

The auditor has completed analyzing the results of tests of details of the accounts receivable ending balance. Errors totaling $25 000 were found. These exceptions are

The highest-cost audit will be incurred when the auditor expects that the internal control system would

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Legal Liability

Professional Judgment and Ethics

Audit Responsibilities and Objectives

Client Acceptance and Planning the Audit

Materiality and Risk

Internal Controls and Control Risk

Audit Evidence

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters

Exam 10: Audit Strategy and Audit Program

The purpose of tests of controls is to provide reasonable assurance that the

When considering the relationships between types of audit tests and evidence, which of the following procedures are used for both obtaining an understanding of internal control and for conducting tests of controls?

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

Performance of tests of controls provide evidence in support of the specific controls that contribute to the auditor's assessed control risk (where it is reduced below 100%). Also, when dual-purpose tests are used, evidence is also obtained in support of

The auditor verifies the summarizing, accuracy, and posting of entries by performing

The auditor has completed analyzing the results of tests of details of the accounts receivable ending balance. Errors totaling $25 000 were found. These exceptions are

The highest-cost audit will be incurred when the auditor expects that the internal control system would

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Legal Liability

Professional Judgment and Ethics

Audit Responsibilities and Objectives

Client Acceptance and Planning the Audit

Materiality and Risk

Internal Controls and Control Risk

Audit Evidence

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters