Question 1

Inherent risk is:

Accepted Answer

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

Question 2

Vouching involves:

Accepted Answer

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

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is ?

Accepted Answer

A)  If detection risk is high, significant substantive procedures are necessary to reduce detection risk. 
B)  There is an inverse relation between the auditor's assessed risk of material misstatement and detection risk. 
C)  There is no 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)  If detection risk is high, significant substantive procedures are necessary to reduce detection risk. 
B)  There is an inverse relation between the auditor's assessed risk of material misstatement and detection risk. 
C)  There is no 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 7

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

Accepted Answer

A) True 
 B)False

Question 8

Control risk is assessed to be low when there are no internal controls tested or relied upon by the auditor.

Accepted Answer

A) True 
 B)False

Question 9

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 10

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 11

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

Accepted Answer

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

Question 12

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

Accepted Answer

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

Question 13

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 14

Variables estimation sampling is used:

Accepted Answer

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

Question 15

The levels of evidence obtained when performing substantive procedures includes:

Accepted Answer

A)  minimal 
B)  persuasive 
C)  general 
D)  All of the above \ 
A)  minimal 
B)  persuasive 
C)  general 
D)  All of the above \

Question 16

Explain the three common sampling strategies that can be applied when the auditor applies representative sampling.

Accepted Answer

When the auditor applies representative

Question 17

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 18

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

Question 19

Corroborative evidence confirms audit findings from other procedures.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

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

Inherent risk is:

Vouching involves:

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

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

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

Which of the following statements is ?

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

Control risk is assessed to be low when there are no internal controls tested or relied upon by the auditor.

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.

Typically, substantive testing tends to be performed:

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

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.

Variables estimation sampling is used:

The levels of evidence obtained when performing substantive procedures includes:

Explain the three common sampling strategies that can be applied when the auditor applies representative sampling.

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

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

Corroborative evidence confirms audit findings from other procedures.

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

Introduction and Overview of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Risk Assessment 1

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

Exam 9: Execution of the Audit Performing Substantive Procedures

Inherent risk is:

Vouching involves:

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

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

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

Which of the following statements is ?

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

Control risk is assessed to be low when there are no internal controls tested or relied upon by the auditor.

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.

Typically, substantive testing tends to be performed:

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

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.

Variables estimation sampling is used:

The levels of evidence obtained when performing substantive procedures includes:

Explain the three common sampling strategies that can be applied when the auditor applies representative sampling.

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

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

Corroborative evidence confirms audit findings from other procedures.

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

Introduction and Overview of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Risk Assessment 1

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