Question 1

A substantive strategy differs from a reliance strategy in that a substantive strategy includes

Accepted Answer

A)  Increased implementation of detailed tests of transactions and balances. 
B)  Extra tests of controls. 
C)  Increased emphasis on verbal representations from management. 
D)  Setting control risk at a minimum level. 
A)  Increased implementation of detailed tests of transactions and balances. 
B)  Extra tests of controls. 
C)  Increased emphasis on verbal representations from management. 
D)  Setting control risk at a minimum level.

Question 2

After the auditor has prepared a flowchart of the internal controls surrounding sales and evaluated the design of the system,the auditor would perform tests of controls on all control activities

Accepted Answer

A)  Documented in the flowchart. 
B)  Considered to be weaknesses that might allow errors to enter the accounting system. 
C)  That the auditor plans to rely on. 
D)  That would aid in preventing fraud. 
A)  Documented in the flowchart. 
B)  Considered to be weaknesses that might allow errors to enter the accounting system. 
C)  That the auditor plans to rely on. 
D)  That would aid in preventing fraud.

Question 3

During consideration of internal control in a financial statement audit of a nonpublic company,an auditor is not obligated to

Accepted Answer

A)  Search for significant deficiencies in the operation of internal control. 
B)  Understand the internal control environment and the information system. 
C)  Determine whether the controls relevant to audit planning have been placed in operation. 
D)  Perform procedures to understand the design of internal control. 
A)  Search for significant deficiencies in the operation of internal control. 
B)  Understand the internal control environment and the information system. 
C)  Determine whether the controls relevant to audit planning have been placed in operation. 
D)  Perform procedures to understand the design of internal control.

Question 4

Tests of controls must be performed if control risk is set below the maximum level.

Accepted Answer

A) True 
 B)False

A substantive strategy differs from a reliance strategy in that a substantive strategy includes

After the auditor has prepared a flowchart of the internal controls surrounding sales and evaluated the design of the system,the auditor would perform tests of controls on all control activities

During consideration of internal control in a financial statement audit of a nonpublic company,an auditor is not obligated to

Tests of controls must be performed if control risk is set below the maximum level.

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning,Types of Audit Tests,and Materiality

Risk Assessment

Evidence and Documentation

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Assurance,Attestation,and Internal Auditing Services

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,and Internal Auditing Services

Filters

Exam 6: Internal Control in a Financial Statement Audit

A substantive strategy differs from a reliance strategy in that a substantive strategy includes

After the auditor has prepared a flowchart of the internal controls surrounding sales and evaluated the design of the system,the auditor would perform tests of controls on all control activities

During consideration of internal control in a financial statement audit of a nonpublic company,an auditor is not obligated to

Tests of controls must be performed if control risk is set below the maximum level.

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning,Types of Audit Tests,and Materiality

Risk Assessment

Evidence and Documentation

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Assurance,Attestation,and Internal Auditing Services

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,and Internal Auditing Services

Filters