Question 1

Which of the following is the first step an auditor performs when performing analytical procedures?

Accepted Answer

A) Identify the computation,comparison or relationship to be made or investigated 
B) Determine appropriate procedures for investigating the reasons for differences if they are significant 
C) Draw conclusions 
D) Assess the reliability of any data to be used 
A) Identify the computation,comparison or relationship to be made or investigated 
B) Determine appropriate procedures for investigating the reasons for differences if they are significant 
C) Draw conclusions 
D) Assess the reliability of any data to be used

Question 2

The audit program serves as the instructions for the audit team members to complete the required testing.

Accepted Answer

A) True 
 B)False

Question 3

Analytical procedures may not be used:

Accepted Answer

A) to provide at least some minimal level of support for the conclusion. 
B) as primary tests of an account balance. 
C) in testing internal controls. 
D) as corroborative tests in combination with other procedures. 
A) to provide at least some minimal level of support for the conclusion. 
B) as primary tests of an account balance. 
C) in testing internal controls. 
D) as corroborative tests in combination with other procedures.

Question 4

Corroborative evidence confirms audit findings from other procedures.

Accepted Answer

A) True 
 B)False

Question 5

Vouching involves tracking a source document back to the underlying accounting records.

Accepted Answer

A) True 
 B)False

Question 6

Variables estimation sampling is used:

Accepted Answer

A) when the auditor conducts tests of controls. 
B) when the auditor does not expect any errors in an account balance. 
C) to obtain a level of confidence that key attributes for the sample tested can be inferred to be in existence for the entire population. 
D) if the auditor expects more than a few errors in an account balance. 
A) when the auditor conducts tests of controls. 
B) when the auditor does not expect any errors in an account balance. 
C) to obtain a level of confidence that key attributes for the sample tested can be inferred to be in existence for the entire population. 
D) if the auditor expects more than a few errors in an account balance.

Question 7

Inherent risk is:

Accepted Answer

A) the risk of a misstatement occurring irrespective of any internal controls put in place by management. 
B) assessed as high when there are no internal controls tested or relied upon by the auditor. 
C) assessed as low when there are good internal controls in place. 
D) the risk that the auditor's testing procedures will not detect a material misstatement. 
A) the risk of a misstatement occurring irrespective of any internal controls put in place by management. 
B) assessed as high when there are no internal controls tested or relied upon by the auditor. 
C) assessed as low when there are good internal controls in place. 
D) the risk that the auditor's testing procedures will not detect a material misstatement.

Question 8

The timing of substantive procedures is directly influenced by the level of control risk.

Accepted Answer

A) True 
 B)False

Question 9

Roll-forward procedures are performed during the period between the end of the financial year and the date of the audit report.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is ?

Accepted Answer

A) There is no relation between the auditor's assessed risk of material misstatement and detection risk. 
B) If detection risk is high,significant substantive procedures are necessary to reduce detection risk. 
C) There is an inverse relation between the auditor's assessed risk of material misstatement and detection risk. 
D) If detection risk is low,only a small number of substantive procedures are necessary to reduce the detection risk. 
A) There is no relation between the auditor's assessed risk of material misstatement and detection risk. 
B) If detection risk is high,significant substantive procedures are necessary to reduce detection risk. 
C) There is an inverse relation between the auditor's assessed risk of material misstatement and detection risk. 
D) If detection risk is low,only a small number of substantive procedures are necessary to reduce the detection risk.

Question 11

Substantive testing can be conducted using which of the following procedures?

Accepted Answer

A) Analytical review 
B) Enquiry 
C) Confirmation 
D) All of the above 
A) Analytical review 
B) Enquiry 
C) Confirmation 
D) All of the above

Question 12

Audit sampling is the application of audit procedures to less than 100 per cent of items within a population.

Accepted Answer

A) True 
 B)False

Question 13

Discuss the factors that influence the extent and timing of substantive procedures.

Accepted Answer

When the auditor applies representative

Question 14

Analytical procedures may not be useful when they are used on a company with significantly diverse operations and geographical segments.

Accepted Answer

A) True 
 B)False

Question 15

Variables estimation sampling The auditor uses this technique if they expect more than a few errors in an account balance.This technique can be used when the concern is both understatement and overstatement,and is therefore different to representative sampling.Variables estimation sampling is usually applied to detect misstatements of the book values (carrying amounts or recorded values)of populations.

Accepted Answer

Attribute sampling The auditor uses this

Question 16

A significant account is one that could contain material misstatements based upon their materiality and/or relationship to identified inherent and financial report risks.

Accepted Answer

A) True 
 B)False

Question 17

Tracing is primarily directed towards verifying which of the following assertions?

Accepted Answer

A) Occurrence 
B) Completeness 
C) Existence 
D) Valuation 
A) Occurrence 
B) Completeness 
C) Existence 
D) Valuation

Question 18

Roll-forward procedures are performed:

Accepted Answer

A) after the end of the financial year. 
B) to update the audit findings from the time of the interim procedures through to year-end. 
C) to detect fraud in various balance sheet accounts. 
D) None of the above 
A) after the end of the financial year. 
B) to update the audit findings from the time of the interim procedures through to year-end. 
C) to detect fraud in various balance sheet accounts. 
D) None of the above

Question 19

Analytical procedures that provide persuasive evidence include:

Accepted Answer

A) comparing the number of days purchases in trade payables with prior years. 
B) reviewing the cash accounts in the general ledger for unusual items. 
C) relating average amounts invested to an average interest rate. 
D) reviewing the property,plant and equipment account in the general ledger for unusual items. 
A) comparing the number of days purchases in trade payables with prior years. 
B) reviewing the cash accounts in the general ledger for unusual items. 
C) relating average amounts invested to an average interest rate. 
D) reviewing the property,plant and equipment account in the general ledger for unusual items.

Question 20

Comparing the number of day's purchases in trade payable with prior years would provide persuasive evidence of accounts payable.

Accepted Answer

A) True 
 B)False

Which of the following is the first step an auditor performs when performing analytical procedures?

The audit program serves as the instructions for the audit team members to complete the required testing.

Analytical procedures may not be used:

Corroborative evidence confirms audit findings from other procedures.

Vouching involves tracking a source document back to the underlying accounting records.

Variables estimation sampling is used:

Inherent risk is:

The timing of substantive procedures is directly influenced by the level of control risk.

Roll-forward procedures are performed during the period between the end of the financial year and the date of the audit report.

Which of the following statements is ?

Substantive testing can be conducted using which of the following procedures?

Audit sampling is the application of audit procedures to less than 100 per cent of items within a population.

Discuss the factors that influence the extent and timing of substantive procedures.

Analytical procedures may not be useful when they are used on a company with significantly diverse operations and geographical segments.

A significant account is one that could contain material misstatements based upon their materiality and/or relationship to identified inherent and financial report risks.

Tracing is primarily directed towards verifying which of the following assertions?

Roll-forward procedures are performed:

Analytical procedures that provide persuasive evidence include:

Comparing the number of day's purchases in trade payable with prior years would provide persuasive evidence of accounts payable.

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

Which of the following is the first step an auditor performs when performing analytical procedures?

The audit program serves as the instructions for the audit team members to complete the required testing.

Analytical procedures may not be used:

Corroborative evidence confirms audit findings from other procedures.

Vouching involves tracking a source document back to the underlying accounting records.

Variables estimation sampling is used:

Inherent risk is:

The timing of substantive procedures is directly influenced by the level of control risk.

Roll-forward procedures are performed during the period between the end of the financial year and the date of the audit report.

Which of the following statements is ?

Substantive testing can be conducted using which of the following procedures?

Audit sampling is the application of audit procedures to less than 100 per cent of items within a population.

Discuss the factors that influence the extent and timing of substantive procedures.

Analytical procedures may not be useful when they are used on a company with significantly diverse operations and geographical segments.

A significant account is one that could contain material misstatements based upon their materiality and/or relationship to identified inherent and financial report risks.

Tracing is primarily directed towards verifying which of the following assertions?

Roll-forward procedures are performed:

Analytical procedures that provide persuasive evidence include:

Comparing the number of day's purchases in trade payable with prior years would provide persuasive evidence of accounts payable.

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