1- Which assertion does the audit of accounts payable place more emphasis on gathering evidence about?

Select answer from the options below

existence

completeness

occurrence

diversification

2- Which of the following controls ensures that employees of the entity are paid only for the hours worked?

Select answer from the options below

Employee signing in at work.

Prompt notification of an employee termination.

Independent check of the personnel master file.

Segregation of the payroll and personnel departments.

3- The risk of paying employees more than the authorized rate relates to the auditor objective of

Select answer from the options below

accuracy.

completeness.

cut-off.

occurrence.

4- Auditors will check to ensure receiving reports and purchase orders are pre-numbered. This test of control relates to the audit objective of

Select answer from the options below

existence.

presentation and classification.

cut-off.

valuation.

5- Which of the following is NOT a function of the purchase cycle?

Select answer from the options below

requisitioning goods

receiving goods

preparing purchase orders

issuing invoices

6- Which of the following tests performed by an auditor could be a dual purpose test?

Select answer from the options below

Inquiry of procedures surrounding the requisition of goods.

Examining supporting documentation for invoices.

Observing the performance by receiving clerks.

Examining purchase orders for approved requisitions.

7- Which of the following assertions is most at risk for the purchase and payables cycle?

Select answer from the options below

classification

accuracy

completeness

existence

8- Which of the following is NOT an important control related to the hiring of employees?

Select answer from the options below

Segregating the functions of personnel and payroll.

Restricting access to the personnel master file.

Employees are hired by the human resources department.

Changes to the master file are checked by the same person who enters the data into the computer.

9- What information is usually NOT included on a confirmation of accounts payable?

Select answer from the options below

Supplier name and address.

Request for the amount of purchase commitments at a specific date.

Signature of management.

Balance owing at a specific date.

10- Generally speaking, overall audit risk needs to be

Select answer from the options below

significant.

low.

moderate.

high.

11- Which of the following describes the audit objective of accuracy, valuation, and allocation as it relates to inventory?

Select answer from the options below

inventories recorded represent items on hand at the end of the reporting period

the entity has rights to the inventories included in the balance sheet

inventories are properly stated at the lower of cost and net realizable value, determined in accordance with applicable accounting standards

inventories include all materials, products, and supplies on hand at the end of the reporting period

12- Which of the following accurately describes the auditors assessment of control risk for property, plant, and equipment?

Select answer from the options below

always assessed as high because transactions are usually few and material

rarely assessed because there are typically many immaterial transactions

rarely assessed because transactions are usually few and material

assessed as high because there are typically many immaterial transactions

13- Which of the following documents controls the movement of goods from raw materials through work in process through to finished goods?

Select answer from the options below

inventory transfer requisition

receiving report

purchase requisition

shipping document

14- Ensuring disposals are correctly journalized and posted provides evidence related to which audit objective?

Select answer from the options below

classification

completeness

occurrence

accuracy

15- The initial procedures an auditor performs on the inventory balance are to gather evidence for the assertion of

Select answer from the options below

occurrence and existence.

completeness.

rights and obligations.

accuracy, valuation, and allocation.

16- Which of the following is accurate as it relates to the auditors approach, if the entity determines inventory quantities by a physical count at or near the end of the reporting period?

Select answer from the options below

this is a control testing approach to auditing inventory

this is a substantive-based approach to auditing inventory

inventory records are essential to this auditing method

approach is used when inventory value is immaterial

17- An auditor is performing an audit for a merchandising entity that has material amounts of property and plant and an immaterial amount of equipment. What audit strategy is the auditor likely to follow?

Select answer from the options below

substantive approach

combined approach

analytical approach

control testing approach

18- Which of the following describes the audit objective of completeness with respect to the presentation and disclosure of property, plant, and equipment?

Select answer from the options below

non-current asset balances include all applicable assets used in operations at the end of the reporting period

transactions are disclosed accurately and at appropriate amounts

property, plant, and equipment are appropriately aggregated and or disaggregated

information presented is clearly expressed, relevant, and understandable

19- Who would be the most appropriate person for the entity to assign responsibility to for the inventory count?

Select answer from the options below

warehouse manager

employee responsible for ordering inventory

inventory receiving clerk

accounts receivable manager

20- When an auditor observes the entitys physical inventory count, they are performing a(n)

Select answer from the options below

test of details of balances.

initial procedure.

test of details of transactions.

analytical procedure.