Exam 8: Tests of Controls

Beta Pty Ltd posts to its perpetual inventory records directly from its sales invoices.Inadequate control procedures over the invoicing function allow goods to be invoiced that are not shipped.The inadequate control procedures could cause an:

An auditor wishes to perform tests of controls on a ABC Ltd's cash disbursements procedures.If the control procedures leave no audit trail of documentary evidence, the auditor most likely will test the procedures by:

To check the accuracy of the accounting records with regards to the recorded hours worked, an auditor would ordinarily compare time sheets with:

Which of the following is a primary function of the purchasing department?

Which of the following is a test of controls for the control assertion of completeness for revenue?

When testing a computerised accounting system, which of the following is not true of the test data approach?

Jones Ltd has numerous customers. Each customer file contains name, address, credit limit and account balance. The auditor wishes to undertake a test of the automated control that does not allow account balance to exceed credit limit. The best procedure for the auditor to follow would be to: A. develop a program to compare credit limits with account balances and print out the details of any account with a balance exceeding its credit limit.

While auditing at Bandana Ltd and undertaking tests of controls which are related to controls built around their integrated sales and purchases system, which assertion would be of least interest to you as auditor?

Purchase cut-off procedures should be designed to test whether all inventory:

After obtaining an understanding of internal control and assessing control risk of an entity, an auditor decided not to perform tests of controls.The auditor most likely decided that:

Which of the following internal control activities is not usually performed in the accounts payable department?

When goods are received, the receiving clerk should match the goods with:

Tests of controls for the occurrence assertion for purchases include all of the following except:

All of the following are important controls over credit memos except:

To determine whether internal control structure policies and procedures operated effectively to minimise errors of failure to invoice a shipment, the auditor would select a sample of transactions from the population represented by the:

Tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about management's assertion of:

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

Which of the following is a significant difference between the test data (test deck) approach and an integrated test facility (ITF)?

After obtaining an understanding of an entity's internal control system, an auditor may assess control risk at a high level for some account balances because he or she:

Evidence about which aspect(s) of internal control is usually gained when the auditor is assessing control risk?