Question
1.To conclude that a management review control is effective, the auditor is required to identify a selection of instances in which the control operated, evaluate
1.To conclude that a management review control is effective, the auditor is required to identify a selection of instances in which the control operated, evaluate whether management followed the procedures specified by the control, and properly evaluated and resolved exceptions.
A) True B) False
2. Which of the following statements about substantive analytical procedures is correct?
A) The results of the procedure provide evidence about the existence or absence of misstatement in an account. B) The results of the procedure almost always identify the amount of aknown misstatement, if one exists. C) The auditor designs substantive analytical procedures to assess the risk that an account is misstated. D) All of the above.
3. Which type of audit procedures includes both inspection and recalculation?
A)Substantive analytical procedures B) Tests of controls C) Substantive tests of transactions D) Risk assessment procedures
4. The accounts payable accounting clerk recorded the same purchase twice. Which of the following tests would most likely detect the duplicate entry?
A) Reconciling the vendors statements to the accounts payable trial balance B)Tracing monthly balances from the purchases journal to the general ledger C) Vouching from the general ledger to the purchases journal D) Recalculating the purchases journal
5. Which of the following procedures would the auditor likely perform to test the completeness of accounts payable:
A) Vouch a sample of items from the accounts payable trial balance to invoices received from the clients vendors B) Vouch a sample of items from the accounts payable trial balance to expenses recorded in the general ledger C) Compare the year-end statements received from the clients vendors to the accounts payable trial balance D) Perform substantive analytical procedures comparing ending accounts payable balances by year
6. Which of the following audit procedures would the auditor use to test for the existence of equipment recorded in the property, plant and equipment accounting records?
A) Examine vendor invoices and receiving reports B) Review transactions near the balance sheet date C) Recalculate vendor invoices D) Examine the company purchase order for authorization by an appropriate company employee
7. To audit the existence of cash, the auditor is most likely to confirm the bank balance with the bank and:
A) perform substantive analytical procedures B) test the completeness and accuracy of the reconciling items on the bank reconciliation C) inquire as to whether the balance per the bank agrees to the companys general ledger balance D) count and observe the cash in the bank
8. The auditor normally does not need to test the existence, accuracy or classification of property, plant and equipment recorded in prior periods if the auditor is the continuing auditor (i.e., the auditor has previously audited one or more of the immediately preceding periods) because the related financial statement assertions:
A) usually have low inherent risk B) don't affect the companys net income C) are not important to financial statement users D)were verified in previous audits
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