Question 1

Key item testing is an example of a technique used when conducting substantive procedures.

Accepted Answer

A) True 
 B)False  True

Question 2

Identify the steps used by the auditor when performing analytical procedures.

Accepted Answer

When performing analytical procedures,the steps the auditor performs can be summarised as follows:
-Identify the computation,comparison or relationship to be made or to be investigated.
-Assess the reliability of any data to be used.
-Estimate the probable balance in the account or the probable outcome of the computation.
-Make whatever computations are needed using data in the client's records or data from reliable outside sources.
-Compare the estimated amount with the computed or recorded amount and evaluate whether the difference,if any,is significant.
-Determine appropriate procedures for investigating the reasons for the difference if it is significant.
Perform the procedures.
-Draw conclusions.

Question 3

Which of the following is not a type of analytical procedure?

Accepted Answer

A) Break-even analysis 
B) Confirmation analysis 
C) Ratio analysis 
D) Trend analysis 
A) Break-even analysis 
B) Confirmation analysis 
C) Ratio analysis 
D) Trend analysis B

Question 4

Comparing sales commissions or bonuses with related sales provides what level of evidence?

Accepted Answer

A) Minimal 
B) Corroborative 
C) Absolute 
D) Persuasive 
A) Minimal 
B) Corroborative 
C) Absolute 
D) Persuasive

Question 5

Explain the four different levels of evidence obtained when performing substantive procedures.

Accepted Answer

Several different levels of evidence are

Question 6

Normally,it is more efficient to carry out substantive procedures than to test and rely on controls.

Accepted Answer

A) True 
 B)False

Question 7

Analytical procedures are evaluations of financial information made by a study of plausible relationships among both financial and non-financial data.Discuss why analytical procedures are used by an auditor and explain several of the common types of analytical procedures.

Accepted Answer

Analytical procedures are used by audito

Question 8

Performing substantive procedures prior to year-end,in the absence of specific effective controls,may be acceptable when:

Accepted Answer

A) the likelihood of errors or fraud is low. 
B) the auditor is able to conclude overall that the client's control environment is effective. 
C) the likelihood of errors or fraud is high. 
D) Both a and c 
A) the likelihood of errors or fraud is low. 
B) the auditor is able to conclude overall that the client's control environment is effective. 
C) the likelihood of errors or fraud is high. 
D) Both a and c

Question 9

Vouching involves:

Accepted Answer

A) the application of audit procedures to less than 100 per cent of items within a population. 
B) tracking a source document through to the underlying accounting records. 
C) agreeing the details of a transaction to supporting evidence outside of the company's accounting records. 
D) None of the above 
A) the application of audit procedures to less than 100 per cent of items within a population. 
B) tracking a source document through to the underlying accounting records. 
C) agreeing the details of a transaction to supporting evidence outside of the company's accounting records. 
D) None of the above

Question 10

Overall significant account conclusion statements are captured on:

Accepted Answer

A) confirmation requests. 
B) audit programs. 
C) lead sheets. 
D) minutes of board of directors' meetings. 
A) confirmation requests. 
B) audit programs. 
C) lead sheets. 
D) minutes of board of directors' meetings.

Question 11

Analytical procedures that provide persuasive or corroborative evidence contribute minimal support for the audit conclusion.

Accepted Answer

A) True 
 B)False

Question 12

There are certain audit procedures that are required to be performed according to various auditing standards.Identify specific examples of such procedures and explain why the procedures are mandatory.

Accepted Answer

Some specific examples of audit procedur

Question 13

Typically,substantive testing tends to be performed:

Accepted Answer

A) half way through the financial year. 
B) at the start of the financial year. 
C) at or near year-end. 
D) only when the client's management allows the auditor to conduct the tests. 
A) half way through the financial year. 
B) at the start of the financial year. 
C) at or near year-end. 
D) only when the client's management allows the auditor to conduct the tests.

Question 14

The nature of substantive procedures normally consists of one or a combination of which of the following techniques?

Accepted Answer

A) Key item testing 
B) Analytical procedures 
C) Representative sampling 
D) All of the above 
A) Key item testing 
B) Analytical procedures 
C) Representative sampling 
D) All of the above

Question 15

Misstatements can only arise from fraud.

Accepted Answer

A) True 
 B)False

Question 16

Explain and evaluate the 'fuzzy logic' approach to assessing materiality.

Accepted Answer

Fuzzy logic is an approach to assessing

Question 17

Performing substantive procedures prior to year-end,in the absence of specific effective controls,may be acceptable when:

Accepted Answer

A) the likelihood of errors or fraud is high. 
B) the likelihood of errors or fraud is low. 
C) the auditor is able to conclude overall that the client's control environment is effective. 
D) Both a and c 
A) the likelihood of errors or fraud is high. 
B) the likelihood of errors or fraud is low. 
C) the auditor is able to conclude overall that the client's control environment is effective. 
D) Both a and c

Question 18

The lack of significant change in an account balance from one year to the next does not necessarily mean that the auditor can assume the balance is reasonable.

Accepted Answer

A) True 
 B)False

Question 19

Explain the difference between vouching and tracing.

Accepted Answer

Vouching is when a balance or transactio

Question 20

The primary purpose of vouching is to ensure that:

Accepted Answer

A) the balances or transactions are not overstated. 
B) the balances or transactions are not understated. 
C) sufficient information is disclosed in the notes to the financial statements. 
D) all transactions have been recorded. 
A) the balances or transactions are not overstated. 
B) the balances or transactions are not understated. 
C) sufficient information is disclosed in the notes to the financial statements. 
D) all transactions have been recorded.

Key item testing is an example of a technique used when conducting substantive procedures.

Identify the steps used by the auditor when performing analytical procedures.

Which of the following is not a type of analytical procedure?

Comparing sales commissions or bonuses with related sales provides what level of evidence?

Explain the four different levels of evidence obtained when performing substantive procedures.

Normally,it is more efficient to carry out substantive procedures than to test and rely on controls.

Analytical procedures are evaluations of financial information made by a study of plausible relationships among both financial and non-financial data.Discuss why analytical procedures are used by an auditor and explain several of the common types of analytical procedures.

Performing substantive procedures prior to year-end,in the absence of specific effective controls,may be acceptable when:

Vouching involves:

Overall significant account conclusion statements are captured on:

Analytical procedures that provide persuasive or corroborative evidence contribute minimal support for the audit conclusion.

There are certain audit procedures that are required to be performed according to various auditing standards.Identify specific examples of such procedures and explain why the procedures are mandatory.

Typically,substantive testing tends to be performed:

The nature of substantive procedures normally consists of one or a combination of which of the following techniques?

Misstatements can only arise from fraud.

Explain and evaluate the 'fuzzy logic' approach to assessing materiality.

Performing substantive procedures prior to year-end,in the absence of specific effective controls,may be acceptable when:

The lack of significant change in an account balance from one year to the next does not necessarily mean that the auditor can assume the balance is reasonable.

Explain the difference between vouching and tracing.

The primary purpose of vouching is to ensure that:

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 Testing of Controls

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Completing and Reporting on the Audit

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Exam 9: Execution of the Audit Performing Substantive Procedures

Key item testing is an example of a technique used when conducting substantive procedures.

Identify the steps used by the auditor when performing analytical procedures.

Which of the following is not a type of analytical procedure?

Comparing sales commissions or bonuses with related sales provides what level of evidence?

Explain the four different levels of evidence obtained when performing substantive procedures.

Normally,it is more efficient to carry out substantive procedures than to test and rely on controls.

Analytical procedures are evaluations of financial information made by a study of plausible relationships among both financial and non-financial data.Discuss why analytical procedures are used by an auditor and explain several of the common types of analytical procedures.

Performing substantive procedures prior to year-end,in the absence of specific effective controls,may be acceptable when:

Vouching involves:

Overall significant account conclusion statements are captured on:

Analytical procedures that provide persuasive or corroborative evidence contribute minimal support for the audit conclusion.

There are certain audit procedures that are required to be performed according to various auditing standards.Identify specific examples of such procedures and explain why the procedures are mandatory.

Typically,substantive testing tends to be performed:

The nature of substantive procedures normally consists of one or a combination of which of the following techniques?

Misstatements can only arise from fraud.

Explain and evaluate the 'fuzzy logic' approach to assessing materiality.

Performing substantive procedures prior to year-end,in the absence of specific effective controls,may be acceptable when:

The lack of significant change in an account balance from one year to the next does not necessarily mean that the auditor can assume the balance is reasonable.

Explain the difference between vouching and tracing.

The primary purpose of vouching is to ensure that:

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 Testing of Controls

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Completing and Reporting on the Audit

Filters