Exam 8: Execution of the Audit Testing of Controls

If inherent risk is low and a reasonable level of assurance has been gained from controls testing, extensive substantive procedures need to be performed to estimate the dollar value of any error in an account balance.

(True/False)

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Question 41

Theo Lillis performs the following application control procedures: (i). Control totals: Input totals are balanced and reconciled (ii). Reasonable checks: Actual data is compared to expected data for reasonableness (iii). Sequence tests: Sequential data is reviewed and exception reports are produced for missing numbers. Which of the above application controls do these procedures apply to?

(Multiple Choice)

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Question 42

The more complex the client's operations and its internal controls, the less experienced the auditor who performs the work needs to be.

(True/False)

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Question 43

If the tests of controls confirm the auditor's preliminary evaluation of controls, the planned substantive audit procedures are not modified.

(True/False)

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Question 44

Which of the following statements is incorrect?

(Multiple Choice)

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Question 45

Ben Simon wants to ensure that sales in a retail outlet are not recorded at the wrong amount. Which preventive control will help him ensure his objective?

(Multiple Choice)

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Question 46

Which of the following statements is correct?

(Multiple Choice)

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Question 47

The auditor had the following procedures in his audit program for a client: (i) Review performance versus forecasts (ii) Review performance indicators (iii) Review exception reports What are these instructions related to?

(Multiple Choice)

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Question 48

Tests of controls will usually be carried out:

(Multiple Choice)

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Question 49

Which of the following is an example of a preventive control?

(Multiple Choice)

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Question 50

Re-performance involves the auditor re-performing the control to test its effectiveness.

(True/False)

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Question 51

The factors to consider when deciding the extent of testing of controls include which of the following?

(Multiple Choice)

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Question 52

Which of the following is an example of a detective control?

(Multiple Choice)

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Question 53

Controls can be classified as:

(Multiple Choice)

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Question 54

Transaction-level controls are implemented by businesses to reduce the risk of misstatements due to error or fraud and to ensure that processes are operating effectively.

(True/False)

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Question 55

Rolland Meilleur, public accountant, is testing whether his client's account coding on each purchase order is checked by the computer to a table of valid account numbers, and that various logic tests are performed by the computer. He is trying to mitigate the following from going wrong:

(Multiple Choice)

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Question 56

Showing 41 - 56 of 56

If inherent risk is low and a reasonable level of assurance has been gained from controls testing, extensive substantive procedures need to be performed to estimate the dollar value of any error in an account balance.

The more complex the client's operations and its internal controls, the less experienced the auditor who performs the work needs to be.

If the tests of controls confirm the auditor's preliminary evaluation of controls, the planned substantive audit procedures are not modified.

Which of the following statements is incorrect?

Ben Simon wants to ensure that sales in a retail outlet are not recorded at the wrong amount. Which preventive control will help him ensure his objective?

Which of the following statements is correct?

The auditor had the following procedures in his audit program for a client: (i) Review performance versus forecasts (ii) Review performance indicators (iii) Review exception reports What are these instructions related to?

Tests of controls will usually be carried out:

Which of the following is an example of a preventive control?

Re-performance involves the auditor re-performing the control to test its effectiveness.

The factors to consider when deciding the extent of testing of controls include which of the following?

Which of the following is an example of a detective control?

Controls can be classified as:

Transaction-level controls are implemented by businesses to reduce the risk of misstatements due to error or fraud and to ensure that processes are operating effectively.

Rolland Meilleur, public accountant, is testing whether his client's account coding on each purchase order is checked by the computer to a table of valid account numbers, and that various logic tests are performed by the computer. He is trying to mitigate the following from going wrong:

Introduction and Overview of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Risk Assessment I

Risk Assessment II

Audit Evidence

Gaining an Understanding of the Clients System of Internal Controls

Sampling and Overview of the Risk Response Phase of the Audit

Execution of the Audit Performing Substantive Procedures

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Completing and Reporting on the Audit

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