Question 1

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 2

Once auditors determine an automated control is functioning properly,they can focus subsequent tests on assessing whether any changes have occurred that will limit the effectiveness of the control.

Accepted Answer

A) True 
 B)False

Question 3

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 4

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 5

When designing tests of controls and substantive tests an auditor is gathering evidence to satisfy the transaction related audit objectives.What are the four steps the auditor would normally follow to reduce assessed control risk?

Accepted Answer

1.Apply the transaction-related audit ob

Question 6

You are auditing Rodgers and Company.After performing substantive analytical procedures you conclude that,for the accounts tested,the client's balance appears reasonable.This may indicate that:

Accepted Answer

A)  details test of balances can be eliminated for those accounts. 
B)  certain tests of details of balances may be eliminated for those accounts. 
C)  control tests may be eliminated for those accounts. 
D)  control tests may be reduced for those accounts. 
A)  details test of balances can be eliminated for those accounts. 
B)  certain tests of details of balances may be eliminated for those accounts. 
C)  control tests may be eliminated for those accounts. 
D)  control tests may be reduced for those accounts.

Question 7

The document that details the specific audit procedures for each type of test is the:

Accepted Answer

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

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

An exception or deficiency found in a test of controls:

Accepted Answer

A)  indicates a financial statement misstatement. 
B)  indicates the likelihood of a misstatement. 
C)  indicates that the financial statements are fairly stated. 
D)  indicates that an adverse opinion is warranted on the audit of internal control. 
A)  indicates a financial statement misstatement. 
B)  indicates the likelihood of a misstatement. 
C)  indicates that the financial statements are fairly stated. 
D)  indicates that an adverse opinion is warranted on the audit of internal control.

Question 10

Which of the following statements is not true?

Accepted Answer

A)  Analytical procedures emphasize the overall reasonableness of transactions and balances. 
B)  Tests of controls are concerned with evaluating whether controls are sufficiently effective to justify reducing control risk and thereby reducing analytical review procedures. 
C)  Substantive tests of transactions emphasize the verification of transactions recorded in the journals and then posted in the general ledger. 
D)  Tests of details of balances emphasize the ending balances in the general ledger. 
A)  Analytical procedures emphasize the overall reasonableness of transactions and balances. 
B)  Tests of controls are concerned with evaluating whether controls are sufficiently effective to justify reducing control risk and thereby reducing analytical review procedures. 
C)  Substantive tests of transactions emphasize the verification of transactions recorded in the journals and then posted in the general ledger. 
D)  Tests of details of balances emphasize the ending balances in the general ledger.

Question 11

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 12

There are three stages of the audit in which analytical procedures are performed.Identify each of these three stages and,for each stage,discuss the purpose of performing analytical procedures in that stage.Also indicate in which stage(s)analytical procedures are required by current professional auditing standards.

Accepted Answer

Analytical procedures are performed in t

Question 13

If inherent risk is increased to medium from low,tests of details of balances can be reduced.

Accepted Answer

A) True 
 B)False

Question 14

If all transaction-related audit objectives are met,the auditor does not need to perform substantive tests of balances to determine realizable value.

Accepted Answer

A) True 
 B)False

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

Once auditors determine an automated control is functioning properly,they can focus subsequent tests on assessing whether any changes have occurred that will limit the effectiveness of the control.

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

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

When designing tests of controls and substantive tests an auditor is gathering evidence to satisfy the transaction related audit objectives.What are the four steps the auditor would normally follow to reduce assessed control risk?

You are auditing Rodgers and Company.After performing substantive analytical procedures you conclude that,for the accounts tested,the client's balance appears reasonable.This may indicate that:

The document that details the specific audit procedures for each type of test is the:

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

An exception or deficiency found in a test of controls:

Which of the following statements is not true?

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

If inherent risk is increased to medium from low,tests of details of balances can be reduced.

If all transaction-related audit objectives are met,the auditor does not need to perform substantive tests of balances to determine realizable value.

The Assurance Services Market

The Audit Standards Setting Process

Audit Reports

Legal Liability Considerations for Auditors

Ethics and the Audit Profession

Audit Responsibilities and Objectives

Nature and Type of Audit Evidence

Audit Planning

Considering Materiality and Audit Risk

Considering Internal Control

Considering the Risk of Fraud

Implications of Information Technology for 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 Inventory and Warehousing Cycle

Audit of the Payroll and Personnel Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Audit Completion

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters

Exam 13: Developing the Overall Audit Plan and Audit Program

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

Once auditors determine an automated control is functioning properly,they can focus subsequent tests on assessing whether any changes have occurred that will limit the effectiveness of the control.

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

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

When designing tests of controls and substantive tests an auditor is gathering evidence to satisfy the transaction related audit objectives.What are the four steps the auditor would normally follow to reduce assessed control risk?

You are auditing Rodgers and Company.After performing substantive analytical procedures you conclude that,for the accounts tested,the client's balance appears reasonable.This may indicate that:

The document that details the specific audit procedures for each type of test is the:

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

An exception or deficiency found in a test of controls:

Which of the following statements is not true?

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

If inherent risk is increased to medium from low,tests of details of balances can be reduced.

If all transaction-related audit objectives are met,the auditor does not need to perform substantive tests of balances to determine realizable value.

The Assurance Services Market

The Audit Standards Setting Process

Audit Reports

Legal Liability Considerations for Auditors

Ethics and the Audit Profession

Audit Responsibilities and Objectives

Nature and Type of Audit Evidence

Audit Planning

Considering Materiality and Audit Risk

Considering Internal Control

Considering the Risk of Fraud

Implications of Information Technology for 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 Inventory and Warehousing Cycle

Audit of the Payroll and Personnel Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Audit Completion

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters