Exam 8: Tests of Controls

When undertaking tests of controls for revenues, auditors are more concerned with controls associated with the occurrence assertion than they are with the completeness assertion because:

While undertaking the audit of the payables and disbursements system at Broil Ltd, you find that the internal control questionnaire indicates that an approved receiving report is required to accompany every cheque request for payment of merchandise.Which of the following tests of control would provide you with the greatest assurance that this control is operating effectively?

When reviewing the audit working papers of Coffee Ltd you find the following audit populations were used as the basis from which to select a random sample in response to an account balance, assertion at risk and an appropriate audit procedure.Which of these populations would be of most concern to you as being an inappropriate audit population, given the assertion at risk and the audit procedure selected?

An audit client erroneously recorded a large purchase twice.Which of the following tests of control would be most likely to detect this error in a timely and efficient manner?

Test of controls must be performed:

Selected employee time cards that have been approved by supervisory personnel during the year are compared to the payroll register to ensure that they have been recorded.Which of the following assertions for payroll expense does this test?

Tracing shipping documents to pre-numbered sales invoices provides evidence that:

Possible misstatements related to the occurrence assertion for payroll transactions include all of the following except:

To ensure the completeness of purchases made during the year, the auditor should:

In a properly-designed purchasing process, the same employee most likely would match suppliers' invoices with receiving reports and also:

An auditor who is testing IT controls in a payroll system would most likely use test data that contain conditions such as:

A procedure that would most likely be used by an auditor in performing tests of controls that involve segregation of functions and that leave no transaction trail is:

Which is not a key segregation of duties for the revenue process? Different parties should:

While auditing Georgie Ltd you have identified as a risk whether all sales have occurred.The procedure that will be most effective in verifying this assertion is:

In a daily computer run to update cheque account balances and to print out basic details on any customer account that was overdrawn, the overdrawn account of the computer programmer was never printed.Which of the following control procedures would have been most effective in detecting this irregularity?

Which of the following is the most effective test of control to detect vouchers prepared for the payment of goods that were not received?

Tracing bills of lading to sales invoices provides evidence that:

In the examination of which of the following general ledger accounts will tests of controls be particularly appropriate?

An auditor selects a sample from the file of shipping documents to determine whether invoices were prepared.This test is performed to assess which assertion for sales?

Auditing by testing the input and output of an IT system instead of the computer program itself will: