Question 1

The PCAOB does not allow haphazard sampling.

Accepted Answer

A) True 
 B)False

Question 2

Generally, there are two types of files: current and permanent.

Accepted Answer

A) True 
 B)False

Question 3

A material weakness occurs when it is reasonably probable or possible that a material misstatement of an account balance or disclosure would not be prevented/detected by an internal control.

Accepted Answer

A) True 
 B)False

Question 4

Examples of controls tested in the period-end financial reporting process include:

Accepted Answer

A)  an estimation of the contingent liabilities at year-end. 
B)  a review of appropriate authorization over paid invoices. 
C)  the client's accounting policies conform to GAAP and/or IFRS. 
D)  All of the above. 
A)  an estimation of the contingent liabilities at year-end. 
B)  a review of appropriate authorization over paid invoices. 
C)  the client's accounting policies conform to GAAP and/or IFRS. 
D)  All of the above.

Question 5

Kim is a senior auditor at the Wing CPA firm. She is in charge of formulating
the audit plan for several key controls and accounts. Her manager has determined
that if any of the accounts she is working on are misstated by $20,000 the misstatement
is material. The account includes some unusual and significant transactions that
have occurred during the year. Kim wants to utilize sampling for her testing.
Required:
(a) How can Kim stratify the transactions in the account to best utilize sampling?
(b)What is sampling risk? How might it affect the audit conclusions Kim makes based
on the control tests?
(c) If Kim misses anything as a result of sampling, what audit procedures might
uncover the error during the ICFR audit? During the financial statement audit?

Accepted Answer

(a) Probably the best way to disaggregat

Question 6

Jessica Chatman is a staff auditor assigned the task of performing tests of internal controls for the JC Automotive Parts engagement. Before she begins testing, Jessica
must first determine the timing of her tests. Because JC Automotive is a very small
engagement, all controls are manual. In planning the tests, she identifies one control
as a significantly recurring control over the revenue account that occurs once a week
(52 times a year). For another area, she identifies a control that is over adjusting
entries and occurs quarterly (four times a year).
In planning the timing of the tests of the internal controls over financial reporting,
which should Jessica plan to test more frequently? Would your answer change if
the controls over the revenue account were automatic controls that did not change
over the reporting period? Explain.

Accepted Answer

Jessica should answer the questions: Wha

Question 7

Which of the following risks can the auditor control:

Accepted Answer

A)  audit risk. 
B)  detection risk. 
C)  inherent risk. 
D)  control risk. 
A)  audit risk. 
B)  detection risk. 
C)  inherent risk. 
D)  control risk.

The PCAOB does not allow haphazard sampling.

Generally, there are two types of files: current and permanent.

A material weakness occurs when it is reasonably probable or possible that a material misstatement of an account balance or disclosure would not be prevented/detected by an internal control.

Examples of controls tested in the period-end financial reporting process include:

Which of the following risks can the auditor control:

An Introduction to Auditing

Overview of an Integrated Audit

The Auditors Role in Society

Legal Environment Affecting Audits Pt Iii Executing an Integrated Audit

Client Acceptance and Continuance and Preliminary Engagement Procedures

Audit Planning and Risk Assessment

Internal Control, Understanding the Clients Internal Control Over Financial Reporting and Auditing Design Effectiveness

Substantive Procedures and the Financial Statement Audit

Auditing Revenue Process: Sales, Billing and Collection in the Health-Care Provider and Retailing Industries

Completing the Integrated Audit and Reporting

The Acquisition and Payments Cycle and Related Accounts: Purchases, Cash Disbursements and Other Related Activities in the Automotive Industry

Auditing Human Resources Cycle Process: Personnel and Payroll in Service Industries

Auditing Inventory Processes: Tracking and Costing Products in the Land Development and Home Building Industry

Assets, Liabilities and Equity Related to the Financing Cycle

Topics Beyond the Integrated Audit

Filters

Exam 8: Planning and Testing Operating Effectiveness of Internal Control Over Financial Reporting

The PCAOB does not allow haphazard sampling.

Generally, there are two types of files: current and permanent.

A material weakness occurs when it is reasonably probable or possible that a material misstatement of an account balance or disclosure would not be prevented/detected by an internal control.

Examples of controls tested in the period-end financial reporting process include:

Which of the following risks can the auditor control:

An Introduction to Auditing

Overview of an Integrated Audit

The Auditors Role in Society

Legal Environment Affecting Audits Pt Iii Executing an Integrated Audit

Client Acceptance and Continuance and Preliminary Engagement Procedures

Audit Planning and Risk Assessment

Internal Control, Understanding the Clients Internal Control Over Financial Reporting and Auditing Design Effectiveness

Substantive Procedures and the Financial Statement Audit

Auditing Revenue Process: Sales, Billing and Collection in the Health-Care Provider and Retailing Industries

Completing the Integrated Audit and Reporting

The Acquisition and Payments Cycle and Related Accounts: Purchases, Cash Disbursements and Other Related Activities in the Automotive Industry

Auditing Human Resources Cycle Process: Personnel and Payroll in Service Industries

Auditing Inventory Processes: Tracking and Costing Products in the Land Development and Home Building Industry

Assets, Liabilities and Equity Related to the Financing Cycle

Topics Beyond the Integrated Audit

Filters