Question 1

Non-sampling risk is the risk that

Accepted Answer

A)  an auditor selects an inappropriate method to select a sample. 
B)  an auditor reaches an inappropriate conclusion for any reason not related to sampling risk. 
C)  the sample chosen is not representative of the whole population. 
D)  none of the above 
A)  an auditor selects an inappropriate method to select a sample. 
B)  an auditor reaches an inappropriate conclusion for any reason not related to sampling risk. 
C)  the sample chosen is not representative of the whole population. 
D)  none of the above

Question 2

Identify and explain the factors that influence the sample size for tests of controls.

Accepted Answer

There are a number of factors that will

Question 3

Oliver DiPietro was testing the controls of Blue Coast Wholesale Fish Market. When testing controls, which one of the following evidence gathering procedures is used?

Accepted Answer

A)  vouching of transactions 
B)  confirmations of accounts receivable 
C)  tracing of transactions to source documents 
D)  enquiry of client personnel 
A)  vouching of transactions 
B)  confirmations of accounts receivable 
C)  tracing of transactions to source documents 
D)  enquiry of client personnel

Question 4

Which sampling method involves the selection of items that are grouped together within the population of items available?

Accepted Answer

A)  systematic selection 
B)  haphazard selection 
C)  random selection 
D)  block selection 
A)  systematic selection 
B)  haphazard selection 
C)  random selection 
D)  block selection

Question 5

When control risk is high, the audit strategy is to

Accepted Answer

A)  do little or no tests of controls and increase reliance on substantive testing of transactions and account balances. 
B)  assume the client's management is dishonest and immediately report them to the Canada Revenue Agency (CR
A) . 
C)  increase reliance on tests of controls and reduce reliance on substantive testing of transactions and account balances. 
D)  refuse to continue with the remainder of the audit due to the high risk of fraud. 
A)  do little or no tests of controls and increase reliance on substantive testing of transactions and account balances. 
B)  assume the client's management is dishonest and immediately report them to the Canada Revenue Agency (CR
A) . 
C)  increase reliance on tests of controls and reduce reliance on substantive testing of transactions and account balances. 
D)  refuse to continue with the remainder of the audit due to the high risk of fraud.

Question 6

Explain the differences between the main objectives of tests of controls and substantive procedures.

Accepted Answer

Tests of controls are conducted to estab

Question 7

Stratification of the population will result in less efficient sampling and increase the sample
size required.

Accepted Answer

A) True 
 B)False

Question 8

An audit plan includes the audit procedures to be used when testing controls and when
conducting detailed substantive audit procedures.

Accepted Answer

A) True 
 B)False

Question 9

Non-statistical sampling involves random selection and probability theory to evaluate the
results.

Accepted Answer

A) True 
 B)False

Question 10

Corey Hill used analytical procedures at his client, Ultimate Vacations. Which one of these is not an analytical procedure?

Accepted Answer

A)  Send confirmations to major customers. 
B)  Estimate revenue for Ultimate Vacations by multiplying trips sold by average price of vacation packages. 
C)  Discuss unusual fluctuations with client personnel. 
D)  Compare wages month by month for this year and last year. 
A)  Send confirmations to major customers. 
B)  Estimate revenue for Ultimate Vacations by multiplying trips sold by average price of vacation packages. 
C)  Discuss unusual fluctuations with client personnel. 
D)  Compare wages month by month for this year and last year.

Question 11

Explain how auditors evaluate the results of tests of controls conducted on a sample.

Accepted Answer

After an auditor has completed their aud

Question 12

Which of the following is a factor that influences the sample size when testing controls?

Accepted Answer

A)  an increase in the auditor's assessment of the risk of material misstatement 
B)  an increase in the tolerable rate of deviation 
C)  stratification of the population when appropriate 
D)  an increase in tolerable misstatement 
A)  an increase in the auditor's assessment of the risk of material misstatement 
B)  an increase in the tolerable rate of deviation 
C)  stratification of the population when appropriate 
D)  an increase in tolerable misstatement

Question 13

When conducting substantive testing, an increase in the auditor's assessment of the risk of
material misstatement will result in an increase in the size of the sample.

Accepted Answer

A) True 
 B)False

Question 14

When errors are discovered upon testing transactions or account balances, the auditor will

Accepted Answer

A)  project the error to the entire population, if possible. 
B)  assess if the errors constitute an isolated event. 
C)  consider the impact of the errors. 
D)  all of the above 
A)  project the error to the entire population, if possible. 
B)  assess if the errors constitute an isolated event. 
C)  consider the impact of the errors. 
D)  all of the above

Question 15

David Killbear has been involved in testing controls at Highbridge Falls. Which of these control tests would be deemed ineffective?

Accepted Answer

A)  reading a client's policy manual 
B)  entering invalid passwords to see whether access is denied 
C)  both a and b 
D)  none of the above are effective controls 
A)  reading a client's policy manual 
B)  entering invalid passwords to see whether access is denied 
C)  both a and b 
D)  none of the above are effective controls

Question 16

Where an auditor concludes that the audit client's systems of internal controls are ineffective, he/she will

Accepted Answer

A)  conclude that the client's system of internal controls can be relied upon to detect potential material misstatements. 
B)  conclude that the client's system of internal controls cannot be relied upon to detect potential material misstatements. 
C)  reduce the amount of reliance to be placed on substantive tests. 
D)  project the misstatements to the entire population. 
A)  conclude that the client's system of internal controls can be relied upon to detect potential material misstatements. 
B)  conclude that the client's system of internal controls cannot be relied upon to detect potential material misstatements. 
C)  reduce the amount of reliance to be placed on substantive tests. 
D)  project the misstatements to the entire population.

Question 17

Substantive audit procedures include

Accepted Answer

A)  detailed tests of balances. 
B)  analytical procedures. 
C)  detailed tests of transactions. 
D)  all of the above 
A)  detailed tests of balances. 
B)  analytical procedures. 
C)  detailed tests of transactions. 
D)  all of the above

Question 18

The timing of audit testing refers to the stage of the audit when procedures are performed
and the date that audit evidence relates to.

Accepted Answer

A) True 
 B)False

Question 19

Sampling is not required when

Accepted Answer

A)  it is the first year that the auditor has done the audit for a client. 
B)  the auditor is conducting tests of controls. 
C)  an audit procedure is conducted on an entire group of transactions. 
D)  the client requests the auditor not to collect samples of certain transactions. 
A)  it is the first year that the auditor has done the audit for a client. 
B)  the auditor is conducting tests of controls. 
C)  an audit procedure is conducted on an entire group of transactions. 
D)  the client requests the auditor not to collect samples of certain transactions.

Question 20

The risk that the auditor concludes that a material misstatement exists when it does not is
likely to result in an increase in audit effort when it is not required.

Accepted Answer

A) True 
 B)False

Non-sampling risk is the risk that

Identify and explain the factors that influence the sample size for tests of controls.

Oliver DiPietro was testing the controls of Blue Coast Wholesale Fish Market. When testing controls, which one of the following evidence gathering procedures is used?

Which sampling method involves the selection of items that are grouped together within the population of items available?

When control risk is high, the audit strategy is to

Explain the differences between the main objectives of tests of controls and substantive procedures.

Stratification of the population will result in less efficient sampling and increase the sample size required.

An audit plan includes the audit procedures to be used when testing controls and when conducting detailed substantive audit procedures.

Non-statistical sampling involves random selection and probability theory to evaluate the results.

Corey Hill used analytical procedures at his client, Ultimate Vacations. Which one of these is not an analytical procedure?

Explain how auditors evaluate the results of tests of controls conducted on a sample.

Which of the following is a factor that influences the sample size when testing controls?

When conducting substantive testing, an increase in the auditor's assessment of the risk of material misstatement will result in an increase in the size of the sample.

When errors are discovered upon testing transactions or account balances, the auditor will

David Killbear has been involved in testing controls at Highbridge Falls. Which of these control tests would be deemed ineffective?

Where an auditor concludes that the audit client's systems of internal controls are ineffective, he/she will

Substantive audit procedures include

The timing of audit testing refers to the stage of the audit when procedures are performed and the date that audit evidence relates to.

Sampling is not required when

The risk that the auditor concludes that a material misstatement exists when it does not is likely to result in an increase in audit effort when it is not required.

Introduction and Review of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Audit Planning I

Audit Planning II

Audit Evidence

Understanding and Testing the Clients System of Internal Controls

Execution of the Audit Performing Substantive Procedures

Auditing Sales and Receivables

Auditing Purchases, Payables and Payroll

Auditing Inventories and PPE

Auditing Cash and Investments

Completing and Reporting on the Audit

Filters

Exam 6: Sampling and Overview of the Risk Response Phase of the Audit

Non-sampling risk is the risk that

Identify and explain the factors that influence the sample size for tests of controls.

Oliver DiPietro was testing the controls of Blue Coast Wholesale Fish Market. When testing controls, which one of the following evidence gathering procedures is used?

Which sampling method involves the selection of items that are grouped together within the population of items available?

When control risk is high, the audit strategy is to

Explain the differences between the main objectives of tests of controls and substantive procedures.

Stratification of the population will result in less efficient sampling and increase the sample size required.

An audit plan includes the audit procedures to be used when testing controls and when conducting detailed substantive audit procedures.

Non-statistical sampling involves random selection and probability theory to evaluate the results.

Corey Hill used analytical procedures at his client, Ultimate Vacations. Which one of these is not an analytical procedure?

Explain how auditors evaluate the results of tests of controls conducted on a sample.

Which of the following is a factor that influences the sample size when testing controls?

When conducting substantive testing, an increase in the auditor's assessment of the risk of material misstatement will result in an increase in the size of the sample.

When errors are discovered upon testing transactions or account balances, the auditor will

David Killbear has been involved in testing controls at Highbridge Falls. Which of these control tests would be deemed ineffective?

Where an auditor concludes that the audit client's systems of internal controls are ineffective, he/she will

Substantive audit procedures include

The timing of audit testing refers to the stage of the audit when procedures are performed and the date that audit evidence relates to.

Sampling is not required when

The risk that the auditor concludes that a material misstatement exists when it does not is likely to result in an increase in audit effort when it is not required.

Introduction and Review of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Audit Planning I

Audit Planning II

Audit Evidence

Understanding and Testing the Clients System of Internal Controls

Execution of the Audit Performing Substantive Procedures

Auditing Sales and Receivables

Auditing Purchases, Payables and Payroll

Auditing Inventories and PPE

Auditing Cash and Investments

Completing and Reporting on the Audit

Filters