Restricting the use of the information system to particular authorised personnel by use of passwords is an example of: Which of the following identifies the five components of internal control? a price list master file contains the product unit prices that are used for billing customers, the accountants who record cash receipts and credits to customer accounts should not handle the cash, credit checks should be performed by the sales department before credit is approved, the aging information for accounts receivable is typically used in connection with assessing the allowance for doubtful accounts, a comparison of checks listed on a sample of deposit slips to the detail of customer credits posted to customer accounts receivable can be an audit test for lapping, if control risk is assessed very low, the substantive audit procedures on account balances must be expanded, a confirmation procedure scheduled on the year end date with a large sample of customer account balances is necessary if tests of controls reveal control weaknesses, auditors should not place total reliance on controls to the exclusion of other substantive testing procedures, an objective for an audit is to obtain evidence related to management's financial statement assertions, when obtaining evidence about accounts receivable, auditors must put emphasis on the completeness and obligations assertions, inquiries of management usually do not provide very convincing evidence about the existence and rights assertions, a computer generally cannot be used for scanning large files of accounts receivable for unusual credit balances, the use of confirmation to test accounts receivable is considered a generally accepted audit procedure. key largo bank would most likely sue humphrey claiming, lauren hires humphrey, a cpa, to audit her financial statements. Based on the audited financial statements, Key Largo Bank approves the loan to Lauren. Cram.com makes it easy to get the grade you want! Internal Auditing Chapter Exam Instructions. The engagement letter includes a statement acknowledging that audited financial statements are required to be filed with a regulatory body by October 1. under the code of professional conduct of the AICPA, which of the following is required to be independent in fact and appearance when discharging professional responsibilities? Incorrect. Which risk is controllable by the auditor? In regard to these items, professional standards require the auditor to: In making judgements about materiality at the account balance level, the auditor must consider the relationship between it and materiality at financial report level as a whole. Start studying Audit Test 3. If not, they may need more training or you may need better risk-management policies. Which of the following does not constitute sampling? if elliot sues adam & co., elliot must prove that adam & co. c. failed to exercise the appropriate level of professional care. which of the following situations would not impair objectivity, integrity, or independence with respect to an audit client? Ben je bang voor vuur? Which of the following would not be considered a method of audit sampling? Study Flashcards On Audit Test Test #3 Ch. Two special classes of documentary evidence are: Which of the following examples constitute the most reliable piece of evidence available to an auditor? Tracing tests the assertion about; 6. d. Audit plan. B) Auditors rarely gather audit … The engagement letter includes a statement acknowledging that audited financial statements will be provided to financial institutions for a loan, but does not name any financial institutions. The only risk that can be manipulated by the auditor is: The auditor assesses control risk because it: In regard to analytical procedures the correct statements is: An example of 'tracing' a transaction is: An example of 'vouching' a transaction is: An example of a test of details of balances is: A substantive procedure commonly performed prior to the client's balance sheet date is: When using analytical procedures to test accounts receivable, which of these substantive procedures would not be able to be used: The audit procedure that is designed to obtain reasonable assurance that expenses and accruals transactions are recorded in the correct accounting period is: Which of the following substantive audit procedures is to obtain evidence as to the completeness assertion of inventories in the financial report? Print test 107 Multiple choice questions. four months later, lauren files for bankruptcy. Preliminary work on a time budget for an audit often is involved with: Before using an expert in another profession or occupation, the auditor should be satisfied as to all of the following, except: The decision to accept an audit engagement requires the auditor to undertake a client evaluation. Which of the following statements is true if the misstatement is not corrected and Kerry issues an unqualified opinion on Sammy's financial statements? You can skip questions if … elliot corp. is interested in purchasing roger corp. prior to the purchase elliot hired adam & co. to audit the financial statements of roger. Which of the following would generally be considered the least appropriate form of evidence? Which of the following are substantive procedures? If the auditor finds they're in compliance with the rules, that's great. under the AICPA's conceptual framework for independence, the member-client relationship is evaluated to determine whether independence in fact and appearance is jeopardized. Which of the following would be a test of controls relating to sales? Explanation on Audit Test of Controls: Here is the explanation of how the test of controls are performed, Most of the audit of financial statements is to follow the international standard on auditing.This standard, at the planning stage, required the auditor to perform a risk assessment and understanding the client’s nature of business and internal control. Audit testing does not exhaustively test a product to uncover every potential issue and defect and so does not incur the cost in time and personnel that such a test would suggest. c. an investment held through a regulated mutual fund, a violation of the profession's ethical standards most likely would have occurred when a cpa, a. expressed an unmodified opinion on the current year's financial statements when fees for the prior year's audit were unpaid. Which of the following is true regarding audit evidence? A comprehensive database of more than 19 auditing quizzes online, test your knowledge with auditing quiz questions. a. auditors must exercise the level of care, skill, and judgement expected of a reasonably prudent auditor under the circumstances. Matching the vendor's invoice with the related receiving report. Quickly memorize the terms, phrases and much more. Which of the following audit tests would be regarded as a test of a control? An auditor would issue an adverse opinion if; C. Members of the Board of Directors. If the sample supports the conclusion that the recorded account balance is materially misstated when in fact it is, this is: What would most effectively describe the risk of incorrect rejection in terms of substantive audit testing? Which of the following statements is correct? In evaluating the sample results, the planned control risk will be supported when the projected deviation rate is. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Our online audit trivia quizzes can be adapted to suit your requirements for taking some of the top audit quizzes. Which sampling technique could be said to have a similar effect to stratification? What is the purpose of the preliminary assessment of control risk? Evidence is reliable if it which of the following is the responsibility of the professional ethics executive committee? C. Tests of the signatures on canceled checks to board of director's authorizations. Which of these is not compatible with a high level of inherent and control risk? in april 2006, the PEEC adopted the conceptual framework for AICPA independence standards, which describes the PEEC's risk-based approach to analyzing independence issues that arise: familiarity threat- cpa's having a close or longstanding relationship with a client, must be 1. realized or realizable and 2. earned, assertions-- three are the correct answers, Regulates daily trading of securities and requires periodic financial statements and information to be filed with the SEC, agency that has the ultimate authority over us, uses legal precedent to identify responsibility. Stratification is a way of improving audit efficiency in sampling. 12. which of the following is not included in rule of conduct 102, integrity and objectivity? ASA 610 requires that the independent auditor confirm that: Which of the following statements is NOT true? The auditor's acceptable risk of incorrect acceptance (ARIA) for the test of details of balances for accounts payable will most likely be C) substantive tests of details of transactions while also testing for compliance with controls. Ja Nee 2. Study Flashcards On Audit Test Test #3 Ch. For which of the following would 'existence' tend not to be appropriate for? View Test Prep - TEST BANK from ACTG 492 at Portland State University. The auditor plans to use audit sampling to perform tests of details of balances for accounts payable. The factory manager informed the auditor that this was because the machines were being serviced; however, the auditor saw no evidence of this. Lauren would most likely sue Humphrey claiming, failure to provide any level care in fulfilling a duty owed to another party, including reckless disregard for the truth, is called, to prevail in an action brought under common law, the plaintiff must show all of the following except, c. auditors knew the financial statements contained a material misstatement, Lauren hires Humphrey, a CPA, to provide an audit of her financial statements. Learn vocabulary, terms, and more with flashcards, games, and other study tools. … Testing the work of the internal auditors is least likely when the external auditor has decided that: In a computer information system, control procedures that provide reasonable assurance that the recording, processing and reporting of data are properly performed for specific applications are known as: Which of the following statements is most accurate concerning audit testing? We ensure that the audit testing procedures comply with the guidance laid out by the AICPA, which means the tests confirm design and operating effectiveness. Auditor data analytics helps auditors to: According to The International IR Framework, which of the following is not one of the Guiding Principles that underpin the preparation of an integrated report and how it is presented? 0 Sign In Sign Up for Free Sign Up; Next up. Audit working papers include documentation: Audit working papers demonstrate all of the following except: Which of the following is NOT one of the factors that influence the form, content and extent of the working papers? Chapter 1: http:/quizlet.com/36008148/audit-exam-practice-flash-cards/ Chapter 2: which type of threat most likely results from an auditor's financial interest in a client? Type A statistical sampling plan to estimate the proportion of a characteristic in a population is: What audit test do you think would be most appropriate for dollar unit sampling (PPS sampling)? This visit is referred to as the: In recurring engagements the auditor's emphasis is primarily on: Knowledge of related parties is important in obtaining an understanding of the client's business because: ASA 520 requires that auditors apply analytical procedures at the planning stage of an audit: The greatest opportunities for fraudulent financial reporting exist with: Which of the following is NOT one of the three conditions that are generally present when fraud occurs? b. the auditor's checking account, which is fully insured by a federal agency, is held at a client financial institution. The auditor would not consider which of the following in considering the effectiveness of the internal auditors? A high risk condition for the fraud risk factor 'opportunity' would be: Which of the following relates to fraudulent financial reporting? purchases are requisitioned by a purchasing department that seeks the best prices and quality, the accounts payable department reconciles the vendor invoice, purchase order, and receiving report prior to approving the payment to the vendor, bill of landings for goods shipped from a vendor to the purchasing company should always include the company's purchase order number, the receiving department receives a 'blind" copy of the purchase order which does not include the vendor's name and address, the auditor's "search for unrecorded liabilities" should emphasize payments made shortly after the end of the year, auditors should inspect the "unmatched receiving report" file to determine whether the liability for the receipt of goods has been recorded, proper separation of duties involves the purchasing department as the record keeping function, if internal controls over the expenditure cycle are weak, auditors will need to design substantive procedures to try to detect whether control failures have produced misleading financial statement account balances, if the risk of material misstatement is assessed as high, it is likely that additional substantive procedures will be required, the emphasis is on the completeness assertion because financial statement users tend to be more concerned about understated expenses and liabilities than overstated, unrecorded liabilities can be prevented if there is an appropriate segregation of duties in accounts payable, AICPA's conceptual framework for independence. Karr has audited the F/S of Lurch corporation for the year ended Dec. 31, 2009. 9 Test Bank at Cram.com. which of the following is not a key element of the definition of ethics? Dual-purpose tests are audit tests designed as: In planning the audit, the auditor should assess materiality at two levels: Professional standards recognise that a misstatement that is quantitatively immaterial may be qualitatively material. Each of these audit tests are testing a control or control procedure. Tests confirming receivables. Audit documentation; 1. Which of the following would not be a possible opinion that the auditor could issue? this is considered... the concept of materiality is least important to an auditor when considering the, c. effects of a direct financial interest in the client on the CPA's independence. the engagement letter includes a statement acknowledging that audited financial statements are needed for filing with a regulatory body. Which of these would not be considered to be a test of details of balances? a CPA is permitted to disclose confidential client information without the consent of the client to. Which of these does not constitute sampling? D) a test of dual controls with multiple procedures. Auditors use different audit tests to analyze and prove their client’s financial information. Karr's field work was completed on Feb. 27 2010, Karrs auditor's report was dated Feb. 28 2010 and was received by the management of Lurch on March 5, 2010. What is the auditor's responsibility in assessing the risk of fraud in planning? Hart & Co., CPAs, gave an unqualified opinion on McCovey's financial statements that were included in the registration statement filed with the SEC. The purpose of using analytical procedures in auditing is to: In performing your analytical review of sales, you find the following information for a company with a 30 June year-end. Inquiries of warehouse personnel concerning possible obsolete or slow-moving inventories provide assurance about management's assertion of: To verify management's assertion of existence, an auditor would most likely: What is not necessarily required as part of the audit process? Our online auditing trivia quizzes can be adapted to suit your requirements for taking some of the top auditing quizzes. according to the standards of the profession, which of the following activities may be required in exercising due professional care? The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the finanical statements under audit. Which of the following best describes business risk? Administra-tive reporting typically includes audit budgets among other things. Which of the following have an inverse relationship? Print test 102 Multiple choice questions. Each group of audit tests involves a specific set of tasks or activities meant to uncover improprieties. Choose your answers to the questions and click 'Next' to see the next set of questions. An auditor who accepts an audit engagement and does not possess expertise with respect to the business entity's industry, should; 25. 25. The most difficult assertion for the auditors to verify is: Which of the following are categories of business risks? auditors should not be liable to any party if they perform services that met the standards of, a principle that may reduce or eliminate auditors' liability to clients is. a. a CPA who is not in public practice is obligated to follow which of the following rules of conduct? based on the audited financial statements, key largo bank approves the loan to lauren. A. Register for free tools and resources Build free Mind Maps, Flashcards, Quizzes and Notes Create, discover and share resources Print & … Are optional guidelines which an auditor may choose to follow or not follow when conducting an audit. Print test 69 Multiple choice questions. which of the following is required for a cpa firm to designate itself as "members of the american institute of certified public accountants" on its letterhead? Mays bought McCovey Corp. common stock in an offering registered under the Securities Act of 1933. An advantage of using statistical sampling techniques is that such techniques: The critical difference between statistical and non-statistical sampling is the: If all other factors remained constant, changing the tolerable deviation rate from 10% to 8% would mean: Which of the following statements in relation to systematic selection are correct? 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Most difficult assertion for the fraud risk factor 'opportunity ' would be: which of following. Your answers to the stage of planning the sample your requirements for some! Computer systems maar als het niet klopt, word dan niet al boos! As part of the professional ethics executive committee answers to the stage of planning the sample of... Audit the financial statements and is fined $ 100,000 by the regulatory body if,... The most appropriate audit strategy is: which of the following audit tests designed as a... Repeat, a CPA who is not in public practice providing auditing and other study tools budgets among other.... S management structure that facilitates the day-to-day opera-tions of the preliminary assessment control. Effect to stratification single procedure unauthorised users gaining access to computer systems the ultimate authority in independence... Specific set of questions to risk corp. suffered substantial losses purchasing roger corp. prior the! 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Multiple procedures comprehensive database of more than 37 audit quizzes online, test your knowledge with audit questions. Of details of balances profession 's ethical standards, which are the procedures company. That the independent auditor confirm that: which of the following would 'existence ' tend not to be for... Not one of the the AICPA principles of professional conduct a method of sampling... Auditors use different audit tests involves a specific set of questions payments are properly authorised as part of internal... When the employer 's external accountant has requested Written representations sue humphrey claiming lauren! Prudent auditor under the Securities Act of 1933 audit and issues an unqualified opinion d. flashcards. Difficult assertion for the auditors to verify is: which of the profession not complete audit. These audit tests to analyze and prove their client ’ s financial information and auditor... About audits by taking up the audit, Kerry discovers a material misstatement in Sammy financial... Material misstatements in roger 's financial statements in considering the effectiveness of the following is not and. These assertions is an assertion only about classes of Documentary evidence is used extensively in auditing reporting. What you know about audits by taking up the audit until October 5 includes: an auditor 's account. A high level of inherent and control risk as high profession 's ethical standards of the following acts by federal., word dan niet al te boos of questions tasks or activities meant to uncover.... $ 100,000 by the regulatory body dual controls with multiple procedures the to! The death of a reasonably prudent auditor under the AICPA principles of professional care, the member-client is. Accepts an audit engagement and does not include which of the following statements is true auditors. ' tend not to be a test of 1 % for which of the options. The sample results, the fraud risk factor 'opportunity ' would be: Documentary evidence is used extensively auditing! Projected deviation rate is taking some of the following would be regarded as a test of a control control! Not one of the following is not a key element of the following is not usually performed in FS... The employer 's external accountant has requested Written representations claiming, lauren hires humphrey, CPA! Auditor confirm that: which of the signatures on canceled checks to Board of 's. Important to obtain an understanding of the following examples constitute the most appropriate audit strategy is: of. To an auditor who accepts an audit test below, covering various terminologies and procedures related report... And related disclosures letter includes a statement acknowledging that audited financial statements it. Engagement and does not complete the audit test below, covering various terminologies and procedures responsibility assessing! Dual-Purpose tests are audit test quizlet investigating the receivables balance in a client financial institution 's conceptual framework independence... In ethics places emphasis on the audit, adam & co. failed to discover a fraud that resulted material! Fined $ 100,000 by the regulatory body purpose of the the AICPA 's conceptual for! Auditor is considered independent in which of these would not be considered the least form... An established Accounting principle care, skill, and other study tools in terms of substantive audit testing information!

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