Question 1

When designing the audit program and the particular audit tests,the auditor should keep in mind that

Accepted Answer

A) the audit program is broken down into two parts-the risk assessment procedures and the tests of details of balances. 
B) the tests of controls will not vary depending on assessed control risk. 
C) analytical procedures performed during substantive testing are generally more focused and more extensive than those done as part of planning. 
D) auditing standards require that the tests contained in the audit program must be approved by the PCAOB. 
A) the audit program is broken down into two parts-the risk assessment procedures and the tests of details of balances. 
B) the tests of controls will not vary depending on assessed control risk. 
C) analytical procedures performed during substantive testing are generally more focused and more extensive than those done as part of planning. 
D) auditing standards require that the tests contained in the audit program must be approved by the PCAOB.

Question 2

Which audit tests involve physical examination and confirmation?

Accepted Answer

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

Question 3

Several factors influence the auditor's choice of the types of tests to select,including

Accepted Answer

A) the availability of the types of evidence. 
B) the relative costs of each type of test. 
C) the effectiveness of the internal controls. 
D) all of the above. 
A) the availability of the types of evidence. 
B) the relative costs of each type of test. 
C) the effectiveness of the internal controls. 
D) all of the above.

Question 4

Analytical procedures

Accepted Answer

A) focus on the ending balances for income statement accounts. 
B) are only performed during the planning stage of the audit. 
C) are required to be performed when auditing an account balance. 
D) provide substantive evidence. 
A) focus on the ending balances for income statement accounts. 
B) are only performed during the planning stage of the audit. 
C) are required to be performed when auditing an account balance. 
D) provide substantive evidence.

Question 5

Inherent risk can be extended to individual balance-related audit objectives.

Accepted Answer

A) True 
 B)False

Question 6

The cost of each type of evidence does not vary in different situations.

Accepted Answer

A) True 
 B)False

Question 7

Risk assessment procedures are performed to assess the risk of material misstatement in the financial statements.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

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

Question 9

Procedures to obtain an understanding of internal control generally provide sufficient appropriate evidence that a control is operating effectively.

Accepted Answer

A) True 
 B)False

Question 10

Tests of controls are generally more costly to perform than analytical procedures.

Accepted Answer

A) True 
 B)False

Question 11

The choice of which types of tests to use and how extensively they need to be performed must be the same for all audits.

Accepted Answer

A) True 
 B)False

Question 12

Substantive tests are procedures designed to test for dollar misstatements that directly affect the correctness of financial statement balances.

Accepted Answer

A) True 
 B)False

Question 13

Analytical procedures performed during phase III of the audit

Accepted Answer

A) must be performed before the balance sheet date. 
B) can be used as a means of planning and directing other audit tests to specific areas. 
C) should be done after tests of details of balances. 
D) are expensive and are therefore not frequently used by the auditor. 
A) must be performed before the balance sheet date. 
B) can be used as a means of planning and directing other audit tests to specific areas. 
C) should be done after tests of details of balances. 
D) are expensive and are therefore not frequently used by the auditor.

Question 14

In a computerized environment,the auditor can often perform substantive tests of transactions quickly for a large sample of transactions.

Accepted Answer

A) True 
 B)False

Question 15

Risk assessment procedures are performed by auditors during an audit in order to

Accepted Answer

A) determine the risk of material misstatement in the financial statements. 
B) determine the amount of testing of internal control. 
C) determine the extent of testing of details of balances. 
D) determine the extent of testing of transactions. 
A) determine the risk of material misstatement in the financial statements. 
B) determine the amount of testing of internal control. 
C) determine the extent of testing of details of balances. 
D) determine the extent of testing of transactions.

Question 16

List each of the five types of audit tests.

Accepted Answer

•risk assessment procedures
•t

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

Auditing standards require a written audit program.

Accepted Answer

A) True 
 B)False

Question 19

The auditor would design which of the following audit tests to detect possible monetary errors in the financial statements?

Accepted Answer

A) control tests 
B) substantive analytical procedures 
C) risk assessment procedures 
D) tests of operating effectiveness of controls over revenue and cash 
A) control tests 
B) substantive analytical procedures 
C) risk assessment procedures 
D) tests of operating effectiveness of controls over revenue and cash

Question 20

Which of the following audit tests would be regarded as a test of controls?

Accepted Answer

A) comparison of the inventory pricing to vendors' invoices 
B) tests of the signatures on canceled checks to board of directors' authorizations 
C) tests of the additions to property,plant,and equipment by physical inspections 
D) review of the specific items making up the balance in a given general ledger account 
A) comparison of the inventory pricing to vendors' invoices 
B) tests of the signatures on canceled checks to board of directors' authorizations 
C) tests of the additions to property,plant,and equipment by physical inspections 
D) review of the specific items making up the balance in a given general ledger account

Exam 13: Overall Audit Strategy and Audit Program

When designing the audit program and the particular audit tests,the auditor should keep in mind that

Which audit tests involve physical examination and confirmation?

Several factors influence the auditor's choice of the types of tests to select,including

Analytical procedures

Inherent risk can be extended to individual balance-related audit objectives.

The cost of each type of evidence does not vary in different situations.

Risk assessment procedures are performed to assess the risk of material misstatement in the financial statements.

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

Procedures to obtain an understanding of internal control generally provide sufficient appropriate evidence that a control is operating effectively.

Tests of controls are generally more costly to perform than analytical procedures.

The choice of which types of tests to use and how extensively they need to be performed must be the same for all audits.

Substantive tests are procedures designed to test for dollar misstatements that directly affect the correctness of financial statement balances.

Analytical procedures performed during phase III of the audit

In a computerized environment,the auditor can often perform substantive tests of transactions quickly for a large sample of transactions.

Risk assessment procedures are performed by auditors during an audit in order to

List each of the five types of audit tests.

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.

Auditing standards require a written audit program.

The auditor would design which of the following audit tests to detect possible monetary errors in the financial statements?

Which of the following audit tests would be regarded as a test of controls?

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Audit of the Sales and Collection Cycle: Tests of Controls

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls,

Completing the Tests in the Acquisition and Payment Cycle:

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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