Question 1

Roll-forward procedurare performed:

Accepted Answer

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

Question 2

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

Accepted Answer

A)  determine appropriate procedures for investigating the reasons for differences if they are significant 
B)  draw conclusions 
C)  identify the computation, comparison or relationship to be made or investigated 
D)  assess the reliability of any data to be used 
A)  determine appropriate procedures for investigating the reasons for differences if they are significant 
B)  draw conclusions 
C)  identify the computation, comparison or relationship to be made or investigated 
D)  assess the reliability of any data to be used

Question 3

Jacqueline Martineau was told by her audit senior to ensure that the evidence she provided through analytical procedurwas both persuasive and corroborative. Which of the following evidencare persuasive?

Accepted Answer

A)  When reviewing accruals for commissions refer to terms of agreements and payment dates. 
B)  When reviewing trade receivables or sales review the volatility of the customer base and compare with expectations. 
C)  When reviewing sales and commissions expense compare sales commissions or bonuses with related sales. 
D)  When reviewing payroll expense compare payroll tax expenses to the annual payroll times the statutory tax rates. 
A)  When reviewing accruals for commissions refer to terms of agreements and payment dates. 
B)  When reviewing trade receivables or sales review the volatility of the customer base and compare with expectations. 
C)  When reviewing sales and commissions expense compare sales commissions or bonuses with related sales. 
D)  When reviewing payroll expense compare payroll tax expenses to the annual payroll times the statutory tax rates.

Question 4

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

Accepted Answer

Several different levels of evidence are

Question 5

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

Accepted Answer

A)  completeness 
B)  existence 
C)  occurrence 
D)  valuation 
A)  completeness 
B)  existence 
C)  occurrence 
D)  valuation

Question 6

Typically, substantive testing tends to be performed:

Accepted Answer

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

Question 7

After performing a risk assessment of a food processing company, Sean Spino has come to the conclusion that he will require more evidence to be obtained by his audit team from substantive procedures. Which of the factors below led him to this conclusion?

Accepted Answer

A)  the level of assurance necessary 
B)  the type of evidence required 
C)  the nature of the test 
D)  the complexity of the client's data capturing systems 
A)  the level of assurance necessary 
B)  the type of evidence required 
C)  the nature of the test 
D)  the complexity of the client's data capturing systems

Question 8

Indicate whether you agree or disagree with the following statements and explain your reasoning. a. Svetlana Petrova was reviewing the risk profile of Gaz Prom Industriin order to determine detection risk. She concluded: "Both my inherent and control risks are low. I guess I should be willing to accept high detection risk." b. Boris Ivanov had performed an assessment of the accounts payable system at Magnitogirsk Iron and Steel Works Operations in the Urals. His focus was on the completeness assertion for accounts payable balances. Inherent risk and control risk were both high. He decided that because the overall risk assessment was high he would have to set his detection risk high. c. Jana Novotna, the auditor-in-charge of the Mosenergo petroleum giant, was explaining to Valentin Titov the importance of the timing of substantive procedures: "Although we associate examinations of internal controls with interim work and substantive procedurwith year-end work, we can perform substantive procedurbefore year-end if there exists an effective control environment." d. Susan Martin, the audit senior at Canadian National Railways, was explaining to the junior auditor how vouching works: "we take a balance or a transaction from the underlying accounting records and agree it to the supporting evidence inside the company." e. LariMcCarthy, the auditor-in-charge of the Firestone audit, feels that the large population of saltransactions warrants the use of representative sampling. She mentions to her staff: "Representative sampling using audit risk tablis especially useful when a lot of errors exist in an accounting system and the auditor perceivthe risk of understatement to be high."

Accepted Answer

a. Agree. There is an inverse relation b

Question 9

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

Accepted Answer

When performing analytical procedures, t

Question 10

Common examplof substantive procedurrelated to key items testing and representative sampling include:

Accepted Answer

A)  tests of income statement accounts for account classification. 
B)  tests of client prepared schedules. 
C)  tests of underlying data to be used as part of the analytical procedures. 
D)  all of the above. 
A)  tests of income statement accounts for account classification. 
B)  tests of client prepared schedules. 
C)  tests of underlying data to be used as part of the analytical procedures. 
D)  all of the above.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

Analytical procedures are an important t

Question 14

Umberto Levinson has performed a test of controls of a flower shop. He is trying to determine the timing of substantive procedurat year-end. Which factor will determine the timing of his audit procedures?

Accepted Answer

A)  timing of the year-end work 
B)  audit risk 
C)  inherent risk 
D)  control risk 
A)  timing of the year-end work 
B)  audit risk 
C)  inherent risk 
D)  control risk

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Vouching involvtracking a source document back to the underlying accounting records.

Accepted Answer

A) True 
 B)False

Question 17

Manny Regimbald is concerned about the audit of a high risk client, the Lewiston Stampeders. He believthat there is a high likelihood that because his audit team is inexperienced that the testing procedurwill not detect a material misstatement. This is a(n)

Accepted Answer

A)  audit risk. 
B)  control risk. 
C)  detection risk. 
D)  none of the above. 
A)  audit risk. 
B)  control risk. 
C)  detection risk. 
D)  none of the above.

Question 18

The lack of significant change in an account balance from one year to the next donot necessarily mean that the auditor can assume the balance is reasonable.

Accepted Answer

A) True 
 B)False

Question 19

Explain the three common sampling strategithat can be applied when the auditor applirepresentative sampling.

Accepted Answer

When the auditor applies representative

Question 20

Overall significant account conclusion statements are captured on:

Accepted Answer

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

Roll-forward procedurare performed:

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

Jacqueline Martineau was told by her audit senior to ensure that the evidence she provided through analytical procedurwas both persuasive and corroborative. Which of the following evidencare persuasive?

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

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

Typically, substantive testing tends to be performed:

After performing a risk assessment of a food processing company, Sean Spino has come to the conclusion that he will require more evidence to be obtained by his audit team from substantive procedures. Which of the factors below led him to this conclusion?

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

Common examplof substantive procedurrelated to key items testing and representative sampling include:

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

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

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

Umberto Levinson has performed a test of controls of a flower shop. He is trying to determine the timing of substantive procedurat year-end. Which factor will determine the timing of his audit procedures?

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

Vouching involvtracking a source document back to the underlying accounting records.

Manny Regimbald is concerned about the audit of a high risk client, the Lewiston Stampeders. He believthat there is a high likelihood that because his audit team is inexperienced that the testing procedurwill not detect a material misstatement. This is a(n)

The lack of significant change in an account balance from one year to the next donot necessarily mean that the auditor can assume the balance is reasonable.

Explain the three common sampling strategithat can be applied when the auditor applirepresentative sampling.

Overall significant account conclusion statements are captured on:

Introduction and Review of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Audit Planning I

Audit Planning II

Audit Evidence

Sampling and Overview of the Risk Response Phase of the Audit

Understanding and Testing the Clients System of Internal Controls

Auditing Saland Receivabl

Auditing Purchases, Payabland Payroll

Auditing Inventoriand PPE

Auditing Cash and Investments

Completing and Reporting on the Audit

Filters

Exam 8: Execution of the Audit Performing Substantive Procedur

Roll-forward procedurare performed:

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

Jacqueline Martineau was told by her audit senior to ensure that the evidence she provided through analytical procedurwas both persuasive and corroborative. Which of the following evidencare persuasive?

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

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

Typically, substantive testing tends to be performed:

After performing a risk assessment of a food processing company, Sean Spino has come to the conclusion that he will require more evidence to be obtained by his audit team from substantive procedures. Which of the factors below led him to this conclusion?

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

Common examplof substantive procedurrelated to key items testing and representative sampling include:

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

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

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

Umberto Levinson has performed a test of controls of a flower shop. He is trying to determine the timing of substantive procedurat year-end. Which factor will determine the timing of his audit procedures?

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

Vouching involvtracking a source document back to the underlying accounting records.

Manny Regimbald is concerned about the audit of a high risk client, the Lewiston Stampeders. He believthat there is a high likelihood that because his audit team is inexperienced that the testing procedurwill not detect a material misstatement. This is a(n)

The lack of significant change in an account balance from one year to the next donot necessarily mean that the auditor can assume the balance is reasonable.

Explain the three common sampling strategithat can be applied when the auditor applirepresentative sampling.

Overall significant account conclusion statements are captured on:

Introduction and Review of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Audit Planning I

Audit Planning II

Audit Evidence

Sampling and Overview of the Risk Response Phase of the Audit

Understanding and Testing the Clients System of Internal Controls

Auditing Saland Receivabl

Auditing Purchases, Payabland Payroll

Auditing Inventoriand PPE

Auditing Cash and Investments

Completing and Reporting on the Audit

Filters