10) Which of the following is a significant difference between the test data approach and an integrated

test facility (ITF)?

Select one:

A. ITs are processed on a live run basis while test data can only be processed on a 'test run' basis

B. IF techniques test programmed application controls while test data techniques test both programmed

and non-programmed application controls

C. The auditor establishes a dummy entity on the client's system for the ITF approach while a dummy

entity is not required for the test data approach.

D. Test data techniques test general controls while IF techniques test application controls

11) After obtaining an understanding of an entity's internal control system, an auditor may assess control

risk at a high level for some account balances because they:

Select one:

A. believe the internal controls are unlikely to be operating effectively.

B. identify internal controls that are likely to prevent material misstatements.

C. perform tests of controls to reduce detection risk to an acceptable level.

D. determine that the pertinent internal control components are not well documented.

12) An audit client erroneously recorded a large purchase twice. Which of the following control would be

most likely to detect this error in a timely and efficient manner?

Select one:

A. Sending written quarterly confirmations to all suppliers

B. Reconciling suppliers' monthly statements with subsidiary payable ledger accounts

C. Tracing totals from the purchases journal to the ledger accounts

D. Footing the purchases journal

13) Which of the following audit procedures is least likely to detect an unrecorded liability?

Select one:

A. Analysis of response to a bank confirmation request

B. Reading of the minutes of meetings of the board of directors

C. Analysis and re-computation of interest expense

D. Analysis and re-computation of depreciation expense

14) The auditor will most likely perform extensive tests for possible understatement of:

Select one:

A. revenues

B. current liabilities

C. non-current assets

D. accounts receivable

15) To verify that all sales transactions have been recorded (the completeness assertion), a test of

transactions should be completed on a representative sample drawn from:

Select one:

A. the billing clerk's file of sales orders

B. entries in the sales journal

C. a file of duplicate copies of sales invoices for which all pre-numbered forms in the series have been

accounted for

D. the shipping clerk's file of duplicate copies of bills of lading (goods shipped notices).

16) In auditing accounts payable, an auditor's procedures most likely would focus primarily on

management's assertion of:

Select one:

A. rights and obligations

B. occurrence

C. existence

D. completeness.

17) In auditing intangible assets, an auditor would determine whether the amortisation amount is

reasonable in support of management's financial statement assertion of:

Select one:

A. completeness

B. existence

C. accuracy, valuation, and allocation

D. occurrence

18) Projection of sample results is required in evaluation of:

Select one:

A. all audit samples, both statistical and non-statistical

B. all audit tests, whether sampling is being performed or not

C. non-statistical audit samples only

D. all statistical samples

19) Which of the following is an element of sampling risk?

Select one:

A. Failing to detect a deviation on a document that has been inspected by the auditor.

B. Failing to undertake an audit procedure that is contained in the sampling plan

C. Choosing an audit procedure that is inconsistent with the audit objective

D. Choosing a sample size that is too small to achieve the sampling objective

21) Which of the following is appropriate in the selection of a statistical sample?

Select one:

A. Random selection

B. Haphazard Selection

C. Stratified selection

D. Block selection

22)Which of the following situations will not result in modification of the auditor's report because of a

scope limitation?

Select one:

A. Reliance placed on the report of another auditor

O B. Restriction imposed by the client

O C. Inadequacy in the accounting records

O D. Inability to obtain sufficient competent evidential matter

23) The auditor's report now requires a description of key audit matters, which are:

Select one:

A. the significant differences between what is disclosed in a financial report prepared in accordance with

the financial reporting framework and what is necessary to provide a true and fair view

B. matters which have been brought to the attention of the auditor by the audit inspection process, but

are not reflected in the financial report

C. matters that, in the auditor's professional judgment, are of most significance in their audit of the

financial report.

D. the five matters that are agreed between the auditor and the audit committee as being of most

significance in their audit of the financial report

24)Which of the following statements is correct?

Select one:

A. The date of the auditor's report establishes the date of the auditor's responsibility for knowledge of

events that should be reflected in the financial report

B. The auditor is responsible for ensuring that events occurring up to the date of the annual general

meeting are reflected in the financial report

C. The only procedures that should be performed after balance date are analytical procedures

D. The auditor's report should be dated the same date as the annual general meeting

25)When an auditor expresses an adverse opinion, the opinion paragraph should include:

Select one:

A. the substantive reasons for the financial statements being misleading

B. the principal effects of the departure from generally accepted accounting principles

C. a description of the uncertainty or scope limitation that prevents an unmodified opinion

D. a direct reference to a separate paragraph in the auditor's report disclosing the basis for the opinion