Revision Quiz

Which of the following are parts of an audit?

• Planning.

• Testing internal control.

• Performing substantive test.

• All the above

A test designed to prove that internal control is operating according to laid down procedures is known as a __________________.

• Test of control

• Walk-through test

• Procedural test

• Test of accounts balance

The main purposes of the engagement letter is to_______________

• avoid litigation.

• confirm the terms of the engagement.

• indicate the likely opinion to be issued.

• clearly delineate the auditor's responsibility for the conduct of the audit.

Which of the following types of documentation is obtained from management of client's company at the completion of an audit?

• Engagement letter.

• Management letter.

• Letter of weaknesses.

• Management representation letter.

Which of the following internal control procedures is not usually performed in the accounts payable department of a large company?

• Indicating the asset and expense account to be debited.

• Computing the mathematical accuracy of supplier's invoice.

• Matching the supplier's invoice with related receiving report.

• Checking of goods for quantity and condition upon receipt from supplier.

The use of pre-numbered documents, then accounting for their numeric sequence meets primarily the auditor's objective of ____________.

• valuation.

• ownership'

• disclosure.

• completeness.

Initial audit planning involves four matters. Which of the following is NOT one of these?

• Develop an overall audit strategy.

• Identify the client's reason for the audit.

• Request that bank balances be confirmed.

• Schedule engagement staff and audit specialists.

Which of the following is not correct regarding the communications between successor and predecessor auditors?

• The burden of initiating the communication rests with the predecessor auditor.

• The burden of initiating the communication rests with the successor auditor.

• The predecessor auditor must receive their former client’s permission prior to divulging information to the successor auditor

• The predecessor auditor may choose to provide a limited response to a successor auditor.

Internal controls ______________.

• are implemented by and are the responsibility of the auditors.

• consist of policies and procedures designed to provide reasonable assurance that the company achieves its objectives and goals.

• guarantee that the company complies with all laws and regulations.

• only apply to public listed companies.

Internal controls are NOT designed to provide reasonable assurance that ______.

• all frauds will be detected.

• transactions are executed in accordance with management's authorization.

• the company's resources are used efficiently and effectively.

• company personnels comply with applicable rules and regulations.