Section 6 F8

Which of the following substantive procedures provides evidence over the EXISTENCE of non-current assets?

• A Select a sample of assets included in the non-current asset register and physically verify them at the client premises
• B Review the repairs and maintenance expense account to identify any items of a capital nature
• C For assets disposed of, agree the sale proceeds to supporting documentation and cash book

Which of the following is a substantive audit procedure for wages and salaries?

• A Inspect a sample of clock cards for evidence of authorization by a responsible official
• B Recalculate a sample of payroll deductions such as employment taxes to confirm accuracy
• C Attempt to access and make changes to the payroll master file using the log on for a junior clerk

Which of the following NOT should be included in an audit engagement letter?

• a) Objective and scope of the audit
• b) Results of previous audits
• c) Management’s responsibilities

Which of the following is NOT a responsibility of the auditor?

• A To provide an opinion on the truth and fairness of the financial statements
• B To conduct an audit in accordance with International Standards on Auditing
• C To express an opinion on the company’s going concern status

Which TWO of the following substantive procedures provide evidence over the EXISTENCE of trade receivables? (1) Agreeing a sample of goods despatched notes to sales invoices and to the sales ledger (2) Undertaking a receivables circularisation (3) Review of post year-end cash receipts, if these relate to year-end receivables follow through to the sales ledger (4) Recalculating the allowance for uncollectible accounts

• A 1 and 3
• B 2 and 4
• C 2 and 3
• D 1 and 4

Which of the following statements is/are true with respect to analytical procedures? (1) Analytical procedures can be used throughout the audit. (2) Analytical procedures must be used as risk assessment procedures.

• A (1) only
• B (2) only
• C (1) and (2)
• D Neither (1) nor (2)

Which two of the following would be classified as substantive procedures? (1) Tests of control (2) Walk-through tests (3) Analytical procedures (4) Tests of details

• A (1) and (2)
• B (1) and (4)
• C (2) and (3)
• D (3) and (4)

The auditor of G Co is performing audit procedures to confirm the company's ownership of motor vehicles. Which of the following would provide the most persuasive evidence of this?

• A Physical inspection of the motor vehicles
• B Inspection of vehicle registration documents
• C Checking that the motor vehicles are recorded in the non-current asset register D Review of vehicle insurance documentation

Which of the following audit procedures would provide the auditor with evidence of completeness of inventory?

• A Tracing test counts performed at the inventory count to the detailed inventory listing
• B Reviewing the physical condition of inventory when attending the inventory count
• C Casting the inventory listing
• D Vouching the cost of a sample of inventory items to suppliers' invoices

Which of the following statements is/are true regarding direct confirmation of accounts receivable? (1) Responses from the customer must be returned directly to the client. (2) Under the positive method the customer only replies if the amount stated is agrees with the customer's records.

• A (1) only
• B (2) only
• C (1) and (2)
• D Neither (1) nor (2)