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WorksheetsTopic 4 - Quiz
Total questions: 15
Worksheet time: 10mins
Which of the following procedures would provide the most reliable audit evidence?
Inquiries of the client’s internal audit staff held in private.
Inspection of prenumbered client purchase orders field in the vouchers payable department
Analytical Procedures performed by the auditor on the entity’s trial balance.
Inspection of bank statements obtained directly from the client’s financial institution
Which of the following groups is not part of “accounting records” used as an evidence?
Worksheets, spreadsheets and supporting cost allocations
General and Special Journals
Minutes of the meeting, external confirmation replies and analyst reports
Related accounting manuals and cost allocations.
Evidence is generally considered appropriate when:
It has been obtained by random selection.
There is enough of it to afford a reasonable basis for an opinion on financial statements
It has the qualities of being relevant, objective, and free from known bias.
It consist of written statements made by managers of the enterprise under audit
Audit procedures fall into three categories. Which of the following is not a category of audit procedures?
Audit procedures fall into three categories. Which of the following is not a category of audit procedures?
Test of Controls
Risk Assessment Procedures
Substantive Procedures
Non-sampling risk is risk that the auditors conclusion based on a sample may be different from the conclusion reached if the entire population were subjected to the same audit procedure or if the auditor used a sample that was not representative of the population
True
False
Risk assessment procedures provide sufficient appropriate audit evidence on which to base an audit opinion
True
False
Audit documentation should provide a sufficient and appropriate record of the basis of the auditors report and evidence that the audit was planned and performed in accordance with PSAs and applicable legal and regulatory requirements
True
False
Which of the following is not a purpose of audit documentation?
Assisting the engagement team to plan and perform the audit.
Enabling the conduct of quality control reviews and inspections in accordance with PSCCQ 1
Enabling the conduct of external inspections in accordance with applicable legal, regulatory or other requirements.
Retaining a record of matters of continuing significance to future audits.
The audit workpapers are owned by the auditor. Such workpapers must have a retention period of a maximum of 5 years.
True
False
It is neither necessary nor practicable for the auditor to document every matter considered, or professional judgment made, in an audit. Hence, oral explanations by the auditor may not be used to clarify or explain information contained in the audit documentation.
True
False
Test of Balances is generally applied to large volume of transactions representing relatively material amounts
True
False
Which of the following is a true statement regarding audit evidence and audit procedures?
Inquiry is a type of audit procedure that typically does not require the auditor to perform additional procedures.
Substantive procedures are performed to test the operating effectiveness of a client’s internal control.
The auditor has a responsibility to design and perform audit procedures to obtain sufficient appropriate audit evidence.
Risk assessment procedures alone provide sufficient appropriate audit evidence on which to base an audit opinion
Analytical Procedures are required to be used in the planning, testing, and overall review stages of the audit
True
False
One of the causes of non-sampling error is
Failure to draw a random sample
Failure to draw a representative sample
The use of inappropriate or ineffective audit procedures
The use of attributes sampling instead of variables sampling
What actions should auditors take if they identify control deficiencies at their client?
Assess the severity of those deficiencies.
Determine whether and how the preliminary control risk assessment should be modified.
Provide documentation about the effect of the control risk assessment on modifications to substantive procedures.
Actions (a), (b), and (c) are all appropriate.
Only (a) and (c) are appropriate.
