M07_Information used in the audit

M07Q1. Which of the following are the first 2 steps of the process for information used in the audit? Select all that apply.

• Evaluate relevance

• Evaluate reliability

• Evaluate precision

• Identify information used in the audit

• Identify information used in control activities

M07Q2. Which of the following is the third step in the process for information used in the audit?

• Evaluate relevance

• Evaluate reliability

• Evaluate resilience

• Evaluate repeatability

M07Q3. What are appropriate audit responses for information used in substantive procedures? Select all that apply.

• Understand the source

• Direct test

• Design and perform substantive procedures

• Test entity management’s controls

M07Q4. Where in the Workflow do you document the audit response for information used in substantive procedures? Select all that apply.

• Estimates module

• Information module

• On-screen text box

• Documentation within the procedure

M07Q5. Entity management uses the inventory turnover report to identify potentially obsolete inventory. In this example, how is the information used in the audit?

• Subject of substantive procedures

• Perform a control activity

• Management estimates

• Perform risk assessment procedures

M07Q6. What is the appropriate audit response for the inventory turnover report discussed in the last question? Select all that apply.

• Substantive audit procedures to evaluate the source

• Understand how the control operator is satisfied

• The control procedure addresses reliability

• Test management’s controls

• Direct test the information

M07Q7. Should you activate the information module in the workflow if KPMG uses the information to select a sample for testing?

• Yes

• No

M07Q8. What are some examples of controls that address data input risks for the information presented in the prior slide? Select all that apply.

• Purchase orders are authorized by the FC in the finance system prior to issuance to the supplier.

• Access to the finance system database is restricted to limited IT personnel whose access is commensurate with job responsibilities.

• Purchase orders can only be entered by individuals who have the purchase ledger clerk role allocated to their user account.

• The report is configured to extract complete and accurate information.

M07Q9. The financial audit team have identified information and would like to adopt the direct testing method. The RAWTC associated with the information is Significant and there are over 250 lines of data. How many items would be tested by the financial audit team?

• 120

• 80

• 60

• 45