Question 1

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 2

Auditors must perform tests of controls separately from substantive tests of transactions.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is true?

Accepted Answer

A) Tests of details of balances focus on the ending general ledger balances for both balance sheet and income statement accounts. 
B) Tests of details of balances focus on the transactions during the period for both balance sheet and income statement accounts. 
C) Tests of details of balances focus on the auditor's understanding of internal controls. 
D) Tests of details of balances focus on comparisons of recorded amounts to expectations developed by the auditor. 
A) Tests of details of balances focus on the ending general ledger balances for both balance sheet and income statement accounts. 
B) Tests of details of balances focus on the transactions during the period for both balance sheet and income statement accounts. 
C) Tests of details of balances focus on the auditor's understanding of internal controls. 
D) Tests of details of balances focus on comparisons of recorded amounts to expectations developed by the auditor.

Question 4

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

Accepted Answer

A) may be eliminated under certain conditions. 
B) are designed to discover significant subsequent events. 
C) are designed to test for dollar misstatements. 
D) will increase proportionately with the auditor's reliance on internal control. 
A) may be eliminated under certain conditions. 
B) are designed to discover significant subsequent events. 
C) are designed to test for dollar misstatements. 
D) will increase proportionately with the auditor's reliance on internal control.

Question 5

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 6

If internal controls are tested and are considered effective, the auditor generally will increase both substantive tests of transactions and tests of details of balances.

Accepted Answer

A) True 
 B)False

Question 7

Analytical procedures are normally designed at the account level, whereas tests of controls and substantive tests of transactions are normally designed at the transaction-related objective level.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) Analytical procedures 
B) Tests of controls 
C) Tests of balances 
D) Substantive tests of transactions 
A) Analytical procedures 
B) Tests of controls 
C) Tests of balances 
D) Substantive tests of transactions

Question 9

Which of the following is ordinarily designed to detect material dollar errors on the financial statements?

Accepted Answer

A) Tests of controls 
B) Analytical review procedures 
C) Computer controls 
D) Tests of details of balances 
A) Tests of controls 
B) Analytical review procedures 
C) Computer controls 
D) Tests of details of balances

Question 10

When an auditor believes that analytical procedures indicate a reasonable possibility of misstatement, the auditor usually would:

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 11

There are eight types of audit evidence: physical examination, confirmation, inspection, observation, inquiries of the client, reperformance, analytical procedures, and recalculation.For each of the following types of audit tests, indicate the type(s)of evidence that can be obtained through the test: (1)tests of controls, (2)substantive tests of transactions, (3)analytical procedures, and (4)tests of details of balances.

Accepted Answer

1.Tests of controls.Inspection, observat

Question 12

Auditing standards require a written audit program.

Accepted Answer

A) True 
 B)False

Question 13

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 14

The auditor must communicate significant deficiencies in internal control only after the entire audit is complete to ensure the auditor has a sufficient understanding of the circumstances surrounding the deficiency.

Accepted Answer

A) True 
 B)False

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

Auditors must perform tests of controls separately from substantive tests of transactions.

Which of the following is true?

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

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

If internal controls are tested and are considered effective, the auditor generally will increase both substantive tests of transactions and tests of details of balances.

Analytical procedures are normally designed at the account level, whereas tests of controls and substantive tests of transactions are normally designed at the transaction-related objective level.

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

Which of the following is ordinarily designed to detect material dollar errors on the financial statements?

When an auditor believes that analytical procedures indicate a reasonable possibility of misstatement, the auditor usually would:

Auditing standards require a written audit program.

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

The auditor must communicate significant deficiencies in internal control only after the entire audit is complete to ensure the auditor has a sufficient understanding of the circumstances surrounding the deficiency.

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

Internal Control, Control Risk, and Section 404 Audits

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

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, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

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

Filters

Exam 13: Overall Audit Strategy and Audit Program

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

Auditors must perform tests of controls separately from substantive tests of transactions.

Which of the following is true?

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

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

If internal controls are tested and are considered effective, the auditor generally will increase both substantive tests of transactions and tests of details of balances.

Analytical procedures are normally designed at the account level, whereas tests of controls and substantive tests of transactions are normally designed at the transaction-related objective level.

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

Which of the following is ordinarily designed to detect material dollar errors on the financial statements?

When an auditor believes that analytical procedures indicate a reasonable possibility of misstatement, the auditor usually would:

Auditing standards require a written audit program.

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

The auditor must communicate significant deficiencies in internal control only after the entire audit is complete to ensure the auditor has a sufficient understanding of the circumstances surrounding the deficiency.

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

Internal Control, Control Risk, and Section 404 Audits

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

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, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

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

Filters