Auditing in the Construction Industry (Pre-Test)

The construction industry includes individuals and entities engaged in building, alteration, and/or repair.

• True
• False

The construction industry is highly influenced by Government initiatives.

• True
• False

Revenue from contracts with customers in the construction industry is recognized in 3 steps: identification of the contract, identification of performance obligations, and determination of the transaction price.

• True
• False

Auditors do not need to assess a construction company's ability to continue its operations when conducting substantive testing.

• True
• False

Job site visits are part of the audit planning procedures in the construction industry.

• True
• False

Assessing the going concern status is an important step in auditing in the construction industry.

• True
• False

Contract costs and related liabilities are examined during substantive testing in the construction industry.

• True
• False

Internal control considerations in the construction industry include estimation and bidding process, project administration, assessing non-performing loans, contract costs, and contract revenues.

• True
• False

Revenue recognition, accounts receivable, and retentions are areas of focus in substantive testing in the construction industry.

• True
• False

Auditors in the construction industry do not need to consider internal controls when auditing contract costs and revenues.

• True
• False