Question 1

Under normal circumstances, there should be no variation in the audit evidence mix from cycle to cycle for a given audit engagement.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is true when a significant amount of evidence is in electronic form?

Accepted Answer

A)  Audit risk decreases. 
B)  It may not be possible to reduce detection risk to an acceptable level by performing only substantive tests. 
C)  Acceptable assurance usually increases. 
D)  It is usually impractical to evaluate controls. 
A)  Audit risk decreases. 
B)  It may not be possible to reduce detection risk to an acceptable level by performing only substantive tests. 
C)  Acceptable assurance usually increases. 
D)  It is usually impractical to evaluate controls.

Question 3

The results of tests of controls and substantive tests of transactions affect the design of the tests of details of balances.

Accepted Answer

A) True 
 B)False

Question 4

Which one of the following statements is False?

Accepted Answer

A)  Tests of controls are concerned with evaluating whether controls are sufficiently effective to justify reducing control risk and thereby reducing analytical review procedures. 
B)  Analytical procedures emphasise the overall reasonableness of transactions and the general ledger balances. 
C)  Substantive tests of transactions emphasise the verification of transactions recorded in the journals and then posted in the general ledger. 
D)  Tests of details of balances emphasise the ending balances in the general ledger. 
A)  Tests of controls are concerned with evaluating whether controls are sufficiently effective to justify reducing control risk and thereby reducing analytical review procedures. 
B)  Analytical procedures emphasise the overall reasonableness of transactions and the general ledger balances. 
C)  Substantive tests of transactions emphasise the verification of transactions recorded in the journals and then posted in the general ledger. 
D)  Tests of details of balances emphasise the ending balances in the general ledger.

Question 5

If an auditor performs substantive tests of final balances before the year end, he or she must check activities in the period between the date of this work and the year-end.This period is known as the:

Accepted Answer

A)  roll forward. 
B)  pre-balance date period. 
C)  interim period. 
D)  continuous period. 
A)  roll forward. 
B)  pre-balance date period. 
C)  interim period. 
D)  continuous period.

Question 6

For efficiency, tests of controls are frequently done at the same time as:

Accepted Answer

A)  analytical procedures. 
B)  compliance tests. 
C)  substantive tests of transactions. 
D)  substantive tests of balances. 
A)  analytical procedures. 
B)  compliance tests. 
C)  substantive tests of transactions. 
D)  substantive tests of balances.

Question 7

When should a complete audit program for an engagement generally be developed?

Accepted Answer

A)  during phase II of the audit process 
B)  by the end of phase I of the audit process 
C)  prior to beginning phase III of the audit process 
D)  prior to beginning phase I of the audit process 
A)  during phase II of the audit process 
B)  by the end of phase I of the audit process 
C)  prior to beginning phase III of the audit process 
D)  prior to beginning phase I of the audit process

Question 8

Contrast the circumstances in which the auditor would choose not to test controls with those in which he or she would perform tests of controls.

Accepted Answer

If the auditor believes that controls ha

Question 9

Extended performance of tests of controls is most likely when:

Accepted Answer

A)  controls are ineffective and assessed control risk is high. 
B)  the auditor is doing a 'fraud audit'. 
C)  controls are effective and assessed control risk is low. 
D)  it is a first-year audit. 
A)  controls are ineffective and assessed control risk is high. 
B)  the auditor is doing a 'fraud audit'. 
C)  controls are effective and assessed control risk is low. 
D)  it is a first-year audit.

Question 10

The results of tests of controls and tests of details of balances affect the design of substantive tests of transactions.

Accepted Answer

A) True 
 B)False

Question 11

Which one of the following statements is NOT correct?

Accepted Answer

A)  Tests of transactions are often performed several months prior to the balance sheet date. 
B)  It is common to use analytical procedures at any time during the audit. 
C)  Tests of details of balances are normally the last tests performed. 
D)  When controls are not considered effective, or when control deviations are discovered, substantive tests will be eliminated. 
A)  Tests of transactions are often performed several months prior to the balance sheet date. 
B)  It is common to use analytical procedures at any time during the audit. 
C)  Tests of details of balances are normally the last tests performed. 
D)  When controls are not considered effective, or when control deviations are discovered, substantive tests will be eliminated.

Question 12

Even when all transaction-related audit objectives are met, the auditor will still rely primarily on substantive tests of balances to meet the following balance-related audit objective:

Accepted Answer

A)  realisable value 
B)  presentations and disclosure 
C)  rights and obligations 
D)  A and C 
A)  realisable value 
B)  presentations and disclosure 
C)  rights and obligations 
D)  A and C

Question 13

Phase I of the audit primarily relies on which type(s)of audit evidence?

Accepted Answer

A)  analytical procedures 
B)  inquiries of client 
C)  documentation 
D)  all of the above 
A)  analytical procedures 
B)  inquiries of client 
C)  documentation 
D)  all of the above

Question 14

Performing substantive tests of balances before the year-end is only advisable if the internal controls have already been assessed as ineffective.

Accepted Answer

A) True 
 B)False

Question 15

Auditors follow a four-step approach to reduce assessed control risk.Identify and describe these steps.

Accepted Answer

1.Apply the transaction-related objectiv

Question 16

Analytical procedures performed during substantive testing are typically ________ those done as part of planning.

Accepted Answer

A)  less focused than 
B)  about the same as 
C)  more focused than 
D)  less extensive than 
A)  less focused than 
B)  about the same as 
C)  more focused than 
D)  less extensive than

Question 17

Only when testing details of balances will audit procedures include confirmation and physical examination.

Accepted Answer

A) True 
 B)False

Question 18

Even when all transaction-related audit objectives are met, the auditor will still rely primarily on substantive tests of balances to meet the following balance-related audit objective(s):

Accepted Answer

A)  realisable value 
B)  rights and obligations 
C)  both A and B 
D)  none of the above 
A)  realisable value 
B)  rights and obligations 
C)  both A and B 
D)  none of the above

Question 19

Which one of the following is ordinarily designed to detect possible material dollar errors in the financial statements?

Accepted Answer

A)  computer controls 
B)  analytical review 
C)  tests of controls 
D)  post-audit working paper review 
A)  computer controls 
B)  analytical review 
C)  tests of controls 
D)  post-audit working paper review

Question 20

Professional auditing standards recognise that in instances where a significant amount of audit evidence is in electronic form, it may not be possible to reduce detection risk to an acceptable level by performing only substantive tests.

Accepted Answer

A) True 
 B)False

Under normal circumstances, there should be no variation in the audit evidence mix from cycle to cycle for a given audit engagement.

Which of the following is true when a significant amount of evidence is in electronic form?

The results of tests of controls and substantive tests of transactions affect the design of the tests of details of balances.

Which one of the following statements is False?

If an auditor performs substantive tests of final balances before the year end, he or she must check activities in the period between the date of this work and the year-end.This period is known as the:

For efficiency, tests of controls are frequently done at the same time as:

When should a complete audit program for an engagement generally be developed?

Contrast the circumstances in which the auditor would choose not to test controls with those in which he or she would perform tests of controls.

Extended performance of tests of controls is most likely when:

The results of tests of controls and tests of details of balances affect the design of substantive tests of transactions.

Which one of the following statements is NOT correct?

Even when all transaction-related audit objectives are met, the auditor will still rely primarily on substantive tests of balances to meet the following balance-related audit objective:

Phase I of the audit primarily relies on which type(s)of audit evidence?

Performing substantive tests of balances before the year-end is only advisable if the internal controls have already been assessed as ineffective.

Auditors follow a four-step approach to reduce assessed control risk.Identify and describe these steps.

Analytical procedures performed during substantive testing are typically ________ those done as part of planning.

Only when testing details of balances will audit procedures include confirmation and physical examination.

Even when all transaction-related audit objectives are met, the auditor will still rely primarily on substantive tests of balances to meet the following balance-related audit objective(s):

Which one of the following is ordinarily designed to detect possible material dollar errors in the financial statements?

Professional auditing standards recognise that in instances where a significant amount of audit evidence is in electronic form, it may not be possible to reduce detection risk to an acceptable level by performing only substantive tests.

Demand for audit and assurance services

Auditors’ legal environment

Audit quality and ethics

Audit responsibilities and objectives

Audit evidence

Audit planning and documentation

Materiality and risk

Internal control and control risk

Fraud auditing

The impact of information technology on the audit process

Audit of the sales and collection cycle: Tests of controls and substantive tests of transactions

Completing tests in the sales and collection cycle: Accounts receivable

Audit sampling

Audit of transaction cycles and financial statement balances I

Audit of transaction cycles and financial statement balances II

Completing the audit

Audit reporting

Other auditing and assurance engagements

Filters

Exam 11: Overall audit plan and audit program

Under normal circumstances, there should be no variation in the audit evidence mix from cycle to cycle for a given audit engagement.

Which of the following is true when a significant amount of evidence is in electronic form?

The results of tests of controls and substantive tests of transactions affect the design of the tests of details of balances.

Which one of the following statements is False?

If an auditor performs substantive tests of final balances before the year end, he or she must check activities in the period between the date of this work and the year-end.This period is known as the:

For efficiency, tests of controls are frequently done at the same time as:

When should a complete audit program for an engagement generally be developed?

Contrast the circumstances in which the auditor would choose not to test controls with those in which he or she would perform tests of controls.

Extended performance of tests of controls is most likely when:

The results of tests of controls and tests of details of balances affect the design of substantive tests of transactions.

Which one of the following statements is NOT correct?

Even when all transaction-related audit objectives are met, the auditor will still rely primarily on substantive tests of balances to meet the following balance-related audit objective:

Phase I of the audit primarily relies on which type(s)of audit evidence?

Performing substantive tests of balances before the year-end is only advisable if the internal controls have already been assessed as ineffective.

Auditors follow a four-step approach to reduce assessed control risk.Identify and describe these steps.

Analytical procedures performed during substantive testing are typically ________ those done as part of planning.

Only when testing details of balances will audit procedures include confirmation and physical examination.

Even when all transaction-related audit objectives are met, the auditor will still rely primarily on substantive tests of balances to meet the following balance-related audit objective(s):

Which one of the following is ordinarily designed to detect possible material dollar errors in the financial statements?

Professional auditing standards recognise that in instances where a significant amount of audit evidence is in electronic form, it may not be possible to reduce detection risk to an acceptable level by performing only substantive tests.

Demand for audit and assurance services

Auditors’ legal environment

Audit quality and ethics

Audit responsibilities and objectives

Audit evidence

Audit planning and documentation

Materiality and risk

Internal control and control risk

Fraud auditing

The impact of information technology on the audit process

Audit of the sales and collection cycle: Tests of controls and substantive tests of transactions

Completing tests in the sales and collection cycle: Accounts receivable

Audit sampling

Audit of transaction cycles and financial statement balances I

Audit of transaction cycles and financial statement balances II

Completing the audit

Audit reporting

Other auditing and assurance engagements

Filters