1) Which assertion will auditors test for when they test the adequacy of the provision for inventory obsolescence?

a.occurrence

b.valuation and allocation

c.classification

d.rights and obligations

2) Which of the following statements regarding the level of demand for the goods sold or services provided by companies is correct?

Select one:

a.If a client operates in an industry subject to changing trends, the client does not risk inventory obsolescence.

b.If a client's products or services are seasonal, this will not affect revenue flow.

c.When a product or process is subject to technological change, there is never a risk that the client will be left behind by its competitors.

d.If a client's products or services are seasonal, this will affect revenue flow.

3) A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a

Select one:

a.random sample.

b.judgment sample.

c.representative sample.

d.statistical sample.

4) Checklists and preformatted questionnaires are particularly helpful:

Select one:

a.in industries that the auditor may not personally be familiar with auditing

b.when control risk is high

c.when less experienced auditors find it difficult to identify which are the critical controls

d.both a and c

5) All of the following are components of internal control, except for:

Select one:

a.the control environment

b.monitoring of controls

c.audit committees

d.the information system