IPE test

1. Information produced by the entity (IPE) is any information created by the entity using the entity’s:

• a) Information technology (IT) applications
• b) End-user computing (EUC) tools
• c) Other means (including manually prepared information)
• d) All of the above

2. Which of the following is an example of information produced by the entity that auditors typically rely on during an audit?

• a) External audit reports
• b) Management representations
• c) Bank confirmation
• d) Industry benchmarks

3. Which of the following is an example of information produced by the entity that auditors may use to corroborate the existence of inventory?

• a) Purchase orders
• b) Bank statements
• c) Sales invoices
• d) Employee payroll records

4. When assessing the entity's ability to continue as a going concern, auditors may rely on information produced by the entity. Which of the following is an example of such information?

• a) Management's plans to restructure the business
• b) Competitor analysis reports
• c) Shareholder meeting minutes
• d) Economic forecasts from external sources

5. Why is IPE Evaluated?

• a) To ensure Completeness
• b) To ensure Accuracy
• c) To ensure Existence
• d) Both A & B
• e) All of the Above

6. Which of the following will be considered as High Risk IPE ?

• a) Information prepared on any tool

• b) System Generated Report with customisation
• c) Information provided in relation to Fraud Risk/Significant Risk Area
• d) All of the Above

7. Which of the following is NOT considered IPE? 

• a) Bank reconciliation
• b) Prepayments schedule
• c) Signed lease agreement for client’s current office
• d) Employee Masterfile

8. Which of the following procedures are examples of testing the accuracy of your IPE: 

• a) Recasting/recalculating for mathematical accuracy
• b) Tracing a sample to source document
• c) Obtaining an understanding of the parameters used to run the report/generate the data
• d) All of the above

9. We are substantively testing prepayments as we have scoped them in as a material only balance. We have selected a sample of 3 items based on PM (ensuring the untested balance is not material). When testing the completeness and accuracy for IPE purposes over the prepayments balance, we: 

• a) Top up our substantive sample to meet the IPE requirements per the audit manual
• b) Use our substantive sample as the accuracy test
• c) Perform a separate test for IPE
• d) Do nothing, a prepayments schedule is not IPE

10. We have identified a SCOT+ Financial Statement Line Item. With regard to the IPE obtained for this, do we: 

• a) Automatically assume “high risk” because it relates to a SCOT+
• b) Determine high risk vs low risk based on the various considerations in the audit manual.
• c) Don’t do anything; we trust the client.
• d) Assume “lower risk” because it results in a lower sample size for consideration