Question 1

Tests of controls are performed to support a reduced assessment of detection risk.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following procedures would most likely be performed in response to the auditor's assessment of the risk of monetary misstatements in the financial statements?

Accepted Answer

A) Ratio analysis 
B) Tests of controls 
C) Tests of details of balances 
D) Risk assessment procedures 
A) Ratio analysis 
B) Tests of controls 
C) Tests of details of balances 
D) Risk assessment procedures

Question 3

Which of the following is generally not included in the "evidence mix"?

Accepted Answer

A) Tests of controls 
B) Substantive tests of transactions 
C) Risk assessment procedures 
D) Tests of details of balances 
A) Tests of controls 
B) Substantive tests of transactions 
C) Risk assessment procedures 
D) Tests of details of balances

Question 4

Which of the following audit tests would be regarded as a test of controls?

Accepted Answer

A) Comparison of the inventory pricing to vendors' invoices 
B) Tests of the signatures on canceled checks to board of directors' authorizations 
C) Tests of the additions to property, plant, and equipment by physical inspections 
D) Review of the specific items making up the balance in a given general ledger account 
A) Comparison of the inventory pricing to vendors' invoices 
B) Tests of the signatures on canceled checks to board of directors' authorizations 
C) Tests of the additions to property, plant, and equipment by physical inspections 
D) Review of the specific items making up the balance in a given general ledger account

Question 5

In phase 4 of the audit, complete the audit and issue an audit report, there are five activities required.List below the activities.

Accepted Answer

1.Perform additional tests for

Question 6

Auditors follow a four step approach to reduce assessed control risk.Which of the following is not one of the four?

Accepted Answer

A) Apply transaction related audit objectives to a class of transactions. 
B) Identify accounts that have high inherent risk. 
C) Identify key controls that reduce control risk. 
D) For potential misstatements, design appropriate substantive tests of transactions. 
A) Apply transaction related audit objectives to a class of transactions. 
B) Identify accounts that have high inherent risk. 
C) Identify key controls that reduce control risk. 
D) For potential misstatements, design appropriate substantive tests of transactions.

Question 7

Collectively, procedures performed to obtain an understanding of the entity and its environment, including internal controls, represent the auditor's:

Accepted Answer

A) audit strategy. 
B) tests of controls. 
C) risk assessment procedures. 
D) tests of transactions. 
A) audit strategy. 
B) tests of controls. 
C) risk assessment procedures. 
D) tests of transactions.

Question 8

The auditor would design which of the following audit tests to detect possible monetary errors in the financial statements?

Accepted Answer

A) Control tests 
B) Analytical procedures 
C) Risk assessment procedures 
D) Tests of operating effectiveness of controls over revenue and cash 
A) Control tests 
B) Analytical procedures 
C) Risk assessment procedures 
D) Tests of operating effectiveness of controls over revenue and cash

Question 9

Analytical procedures must be performed in:

Accepted Answer

A) the planning and test of control stages. 
B) conjunction with tests of transactions and tests of details of balances. 
C) the planning and completion stages. 
D) the planning, test of control, and completion stages. 
A) the planning and test of control stages. 
B) conjunction with tests of transactions and tests of details of balances. 
C) the planning and completion stages. 
D) the planning, test of control, and completion stages.

Question 10

Analytical procedures are the least costly type of audit test.

Accepted Answer

A) True 
 B)False

Question 11

When controls are deemed ineffective and assessed control risk is at the maximum for a private company, which of the following would normally be true?

Accepted Answer

A) No emphasis is placed on the controls. 
B) Relatively little emphasis is placed on the controls. 
C) Moderate emphasis is placed on the controls. 
D) Heavy emphasis is placed on the controls. 
A) No emphasis is placed on the controls. 
B) Relatively little emphasis is placed on the controls. 
C) Moderate emphasis is placed on the controls. 
D) Heavy emphasis is placed on the controls.

Question 12

If tests of controls support the control risk assessment, then ________ in the audit risk model is increased.

Accepted Answer

A) planned detection risk. 
B) planned inherent risk. 
C) planned fraud risk. 
D) planned assurance risk. 
A) planned detection risk. 
B) planned inherent risk. 
C) planned fraud risk. 
D) planned assurance risk.

Question 13

Which of the following statements is not true?

Accepted Answer

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

Question 14

The evidence mix includes risk assessment procedures.

Accepted Answer

A) True 
 B)False

Question 15

The auditor's understanding of internal control performed as part of risk assessment procedures provides the basis for the auditor's initial assessment of control risk.

Accepted Answer

A) True 
 B)False

Question 16

You are auditing Rodgers and Company.After performing substantive analytical procedures you conclude that, for the accounts tested, the client's balance appears reasonable.This may indicate that:

Accepted Answer

A) details test of balances can be eliminated for those accounts. 
B) certain tests of details of balances may be eliminated for those accounts. 
C) control tests may be eliminated for those accounts. 
D) control tests may be reduced for those accounts. 
A) details test of balances can be eliminated for those accounts. 
B) certain tests of details of balances may be eliminated for those accounts. 
C) control tests may be eliminated for those accounts. 
D) control tests may be reduced for those accounts.

Question 17

Which of the following types of procedures will be performed in an audit of internal control over financial reporting?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 18

Which of the following audit tests form the basis for an auditor's report on internal control over financial reporting?

Accepted Answer

A) Analytical procedures 
B) Tests of transactions 
C) Tests of controls 
D) Tests of details of balances 
A) Analytical procedures 
B) Tests of transactions 
C) Tests of controls 
D) Tests of details of balances

Question 19

Tests of controls should be performed after substantive tests of transactions.

Accepted Answer

A) True 
 B)False

Question 20

Tests of controls provide evidence about the likelihood for misstatements in a client's financial statements.

Accepted Answer

A) True 
 B)False

Exam 13: Overall Audit Strategy and Audit Program

Tests of controls are performed to support a reduced assessment of detection risk.

Which of the following procedures would most likely be performed in response to the auditor's assessment of the risk of monetary misstatements in the financial statements?

Which of the following is generally not included in the "evidence mix"?

Which of the following audit tests would be regarded as a test of controls?

In phase 4 of the audit, complete the audit and issue an audit report, there are five activities required.List below the activities.

Auditors follow a four step approach to reduce assessed control risk.Which of the following is not one of the four?

Collectively, procedures performed to obtain an understanding of the entity and its environment, including internal controls, represent the auditor's:

The auditor would design which of the following audit tests to detect possible monetary errors in the financial statements?

Analytical procedures must be performed in:

Analytical procedures are the least costly type of audit test.

When controls are deemed ineffective and assessed control risk is at the maximum for a private company, which of the following would normally be true?

If tests of controls support the control risk assessment, then ________ in the audit risk model is increased.

Which of the following statements is not true?

The evidence mix includes risk assessment procedures.

The auditor's understanding of internal control performed as part of risk assessment procedures provides the basis for the auditor's initial assessment of control risk.

You are auditing Rodgers and Company.After performing substantive analytical procedures you conclude that, for the accounts tested, the client's balance appears reasonable.This may indicate that:

Which of the following types of procedures will be performed in an audit of internal control over financial reporting?

Which of the following audit tests form the basis for an auditor's report on internal control over financial reporting?

Tests of controls should be performed after substantive tests of transactions.

Tests of controls provide evidence about the likelihood for misstatements in a client's financial statements.

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Internal Control, Control Risk, and Section 404 Audits

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

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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