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A walkthrough is: a brief tour of a client's office, warehouses, manufacturing and other operating facilities consists of the auditor following one or more transactions
- A walkthrough is:
- a brief tour of a client's office, warehouses, manufacturing and other operating facilities
- consists of the auditor following one or more transactions through the entire accounting process
- normally used to obtain substantive evidence as to whether an account is fairly presented
- performed near the end of the audit to be satisfied that all relevant assertions have been tested
- Substantive tests:
- are procedures designed to test for monetary misstatements in financial statement accounts and disclosures
- are used to determine whether transaction-related audit objectives have been satisfied for each class of transactions
- are used to determine whether ending balances and disclosures in the financial statements are correct and in compliance with the stated accounting framework (e.g., GAAP)
- all of the above
- The auditor observed whether personnel responsible for handling cash have no accounting responsibilities. This procedure is most likely:
- a test of controls
- a substantive test
- an analytical procedure
- a test of details of cash balances
- Audit data analytics can be used in each of the five types of audit tests
True
False
- Substantive tests of transactions usually include which of the following types of tests?
- Confirmation
- Observation
- Inspection
- all of the above
- Which of the following factors affect the auditor's decisions regarding the mix of audit evidence to be obtained in the audit?
- the nature and effectiveness of the client's internal control
- the level of assessed inherent risk
- the results of testing during the audit
- all of the above
- The relationship between audit assurance obtained from substantive tests and tests of controls is best described as follows:
- the auditor can obtain almost all of the assurance needed in an audit by performing tests of controls
- performing tests of controls may reduce the amount of assurance needed from substantive tests
- even when it is more efficient to perform substantive tests, the auditor must rely, at least to some degree, on controls
- there is no relationship between the amounts of assurance required by substantive tests and tests of controls
- Which of the following affect the design of the auditor's tests of details of balances?
- performance materiality
- assessed level of control risk
- evidence obtained from substantive analytical procedures
- all of the above
- Auditing standards require the auditor to use a written audit program.
True
False
- If the auditor identifies a significant risk due to either error or fraud, the auditor should:
- identify controls that mitigate the risk
- design and perform substantive tests to determine whether misstatements occurred
- incorporate knowledge of the significant risk in the evaluation of inherent and control risk
- all of the above
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