Audit Process Quiz

What is the primary goal of substantive testing in an audit?

• To teach employees financial skills

• To increase company profits quickly

• To ensure financial records are accurate

• To create new financial policies

How many types of substantive tests are there?

• Four

• Three

• Two

• Five

What does control testing evaluate?

• The effectiveness of internal controls

• The company's profitability

• The marketing strategies

• The accuracy of all financial data

Which test focuses on checking individual transactions' accuracy?

• Concurrent test

• Analytical procedures

• Test of details of transactions

• Tests of balances

Why are control tests conducted before substantive tests?

• They provide immediate financial reports

• They improve team performance

• They teach new auditing techniques

• They affect the scope of substantive tests

What are substantive analytical procedures primarily used for?

• Calculating tax returns.

• Counting physical inventory items.

• Checking bank statements and checks.

• Evaluating the reasonableness of transactions and balances.

Which of the following is a type of substantive analytical procedure?

• Document inspection.

• Physical examination.

• Variance analysis.

• Confirmation of balances.

What should auditors consider when using analytical procedures?

• Acceptable differences needing no explanation.

• Total number of invoices.

• Sales in the last quarter.

• Number of employees in the company.

When are tests of details of balances typically most important?

• For verifying final ledger balances.

• During bank reconciliations.

• Creating company budgets.

• At the start of a project.

Why might some tests of details be eliminated?

• When no errors are found in initial tests.

• If the company reports high profits.

• If account balances seem reasonable from analytical procedures.

• Because tests are too expensive.