Prep class test 2 quiz

The auditor tests which type of controls?

• All controls within the business

• All controls in the financial and reporting cycles

• Direct controls within the financial and reporting cycles

• No controls

Test of controls can be performed for

• Manual controls only

• Both manual and computer controls

• Computer controls only

• No controls

When you formulate a test of control you need three things? This is?

• Verb

• Person/document

• Control tested

• Data obtained

which one of the following are NOT verbs used in an audit procedure?

• Confirm

• Ensure

• Verify

• Inspect

Which one of the following verbs will provide you with the least sufficient evidence?

• Inspect

• Recalculate

• Observe

• Inquire

In a computer environment, how can we identify if approvals and authorisations were done, when there is no physical document that is signed?

• Observe the person performing the task

• Inspect the log for authorisation

• Try to create a transaction without approval

• There is nothing to do

In a computerised environment, user logins and access rights ensure that the right person does the right thing. What can an auditor do to test this control?

• Inspect the access tables for specific access rights

• Try to log in with the username and password

• Try to log in with a different username and password

• When logging in with a different username and password, inspect that you do not have access rights

Which one of the following test of control will provide you with more persuasive (better, more reliable) evidence?

• Use test data to try and create a Purchase order without an approved requisition on the system

• Observe the employee creating a purchase order from an approved requisition on the system

• Inspect the computer that there is a dropdown for the approved requisitions

• None of these

What is the computerised equivalent of the manual control where a senior will review the purchase order and ensure it agrees to the requisition?

• Matching test - the computer automatically populates the PO

• Reasonability test - the computer provides an error if the information is outside certain parameters

• Sign test - the computer provides an error when a positive amount is negative

• There is no computerised control for this

When you formulate a substantive procedure you need three things? This is?

• Verb

• Person/document

• Control tested

• Data obtained