Question 1

Which of the following statements is true?

Accepted Answer

A) Testing of controls is the most cost-efficient way of designing each audit. 
B) Substantive testing is the most cost-efficient way of designing each audit. 
C) As the work of testing of controls increases,the cost of substantive work increases. 
D) There is a point where further testing of controls becomes more expensive than performing substantive tests. 
A) Testing of controls is the most cost-efficient way of designing each audit. 
B) Substantive testing is the most cost-efficient way of designing each audit. 
C) As the work of testing of controls increases,the cost of substantive work increases. 
D) There is a point where further testing of controls becomes more expensive than performing substantive tests.

Question 2

The auditor's primary concern related to the auditee's IT is the impact it has on the risk of material misstatement.

Accepted Answer

A) True 
 B)False

Question 3

Classification refers to ensuring that the accounting for transactions is in the period they occur.

Accepted Answer

A) True 
 B)False

Question 4

Anyone who designs a processing system should ________.

Accepted Answer

A) not do the documentation 
B) be independent of management 
C) have access to the data so they can make the system more efficient 
D) not do the technical programming work 
A) not do the documentation 
B) be independent of management 
C) have access to the data so they can make the system more efficient 
D) not do the technical programming work

Question 5

The auditor's control risk assessment will affect the procedures to be included in the audit.

Accepted Answer

A) True 
 B)False

Question 6

To reach a conclusion on the effectiveness of a control,an auditor must first determine ________.

Accepted Answer

A) the required degree of company compliance with control procedures 
B) the maximum possible dollar amount that would not affect a user's decision based on the financial statements 
C) the actual degree of company compliance with control procedures 
D) the nature,extent,and timing of planned substantive procedures 
A) the required degree of company compliance with control procedures 
B) the maximum possible dollar amount that would not affect a user's decision based on the financial statements 
C) the actual degree of company compliance with control procedures 
D) the nature,extent,and timing of planned substantive procedures

Question 7

The greater the reliance placed on the effectiveness of a control,the greater the amount of testing of that control that should be performed.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true regarding the financial statement assertions?

Accepted Answer

A) All assertions can be proved using only substantive procedures,but it would be too costly. 
B) Some assertions are virtually impossible to prove without some evaluation of control effectiveness. 
C) Some assertions can be proved using only an evaluation of control effectiveness. 
D) The evaluation of control effectiveness is only used because it is more efficient than using only substantive procedures. 
A) All assertions can be proved using only substantive procedures,but it would be too costly. 
B) Some assertions are virtually impossible to prove without some evaluation of control effectiveness. 
C) Some assertions can be proved using only an evaluation of control effectiveness. 
D) The evaluation of control effectiveness is only used because it is more efficient than using only substantive procedures.

Question 9

To track employee time worked,an audit client uses pre-numbered timecards and accounts for their numerical sequencing.This control procedure relates to which control objective?

Accepted Answer

A) Accuracy 
B) Completeness 
C) Validity 
D) Classification 
A) Accuracy 
B) Completeness 
C) Validity 
D) Classification

Question 10

One control benefit of an IT control is that it ________.

Accepted Answer

A) is efficient at processing large,unusual,or non-recurring transactions 
B) can monitor the effectiveness of automated controls 
C) adjusts rapidly to changing business processes 
D) reduces the risk of controls being overridden 
A) is efficient at processing large,unusual,or non-recurring transactions 
B) can monitor the effectiveness of automated controls 
C) adjusts rapidly to changing business processes 
D) reduces the risk of controls being overridden

Question 11

An advantage of using a pre-printed audit questionnaire is that the auditor is less likely to forget to ask some important question.

Accepted Answer

A) True 
 B)False

Which of the following statements is true?

The auditor's primary concern related to the auditee's IT is the impact it has on the risk of material misstatement.

Classification refers to ensuring that the accounting for transactions is in the period they occur.

Anyone who designs a processing system should ________.

The auditor's control risk assessment will affect the procedures to be included in the audit.

To reach a conclusion on the effectiveness of a control,an auditor must first determine ________.

The greater the reliance placed on the effectiveness of a control,the greater the amount of testing of that control that should be performed.

Which of the following is true regarding the financial statement assertions?

To track employee time worked,an audit client uses pre-numbered timecards and accounts for their numerical sequencing.This control procedure relates to which control objective?

One control benefit of an IT control is that it ________.

An advantage of using a pre-printed audit questionnaire is that the auditor is less likely to forget to ask some important question.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Audit Sampling

The Revenues, receivables, and Receipts Process and Cash Account Balance

The Purchases, payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, including Fraud Auditing

Filters

Exam 9: Control Assessment and Testing

Which of the following statements is true?

The auditor's primary concern related to the auditee's IT is the impact it has on the risk of material misstatement.

Classification refers to ensuring that the accounting for transactions is in the period they occur.

Anyone who designs a processing system should ________.

The auditor's control risk assessment will affect the procedures to be included in the audit.

To reach a conclusion on the effectiveness of a control,an auditor must first determine ________.

The greater the reliance placed on the effectiveness of a control,the greater the amount of testing of that control that should be performed.

Which of the following is true regarding the financial statement assertions?

To track employee time worked,an audit client uses pre-numbered timecards and accounts for their numerical sequencing.This control procedure relates to which control objective?

One control benefit of an IT control is that it ________.

An advantage of using a pre-printed audit questionnaire is that the auditor is less likely to forget to ask some important question.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Audit Sampling

The Revenues, receivables, and Receipts Process and Cash Account Balance

The Purchases, payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, including Fraud Auditing

Filters