WorksheetsPerforming Substantive Test
Total questions: 10
Worksheet time: 5mins
The primary objective of tests of details of transactions performed as substantive procedures is to:
A. Comply with generally accepted auditing standards
B. Attain assurance about the reliability of the accounting system
C. Detect material misstatements in the financial statements
D. Evaluate whether management's policies and procedures are operating effectively
A procedure designed to test for monetary misstatements directly affecting the validity of the financial statement balances is a:
A. Test of controls
B. Substantive test
C. Test of attributes
D. Monetary-unit sampling test
The auditor must plan and perform audit procedures to obtain sufficient appropriate audit evidence to provide a reasonable basis for his or her opinion. Among the two, which correctly measures the quantity of audit evidence?
A. As the risk of material misstatement in the audit of financial statements increases, the amount of evidence that the auditor should obtain also increases.
B. Quality of the audit evidence obtained. As the quality of the evidence decreases, the need for additional corroborating evidence also decreases.
The reliability of audit evidence is influenced by its source and by its
nature and is dependent on the individual circumstances under which it is obtained. Which among the two about the reliability of audit evidence is not useful?
A. Audit evidence is more reliable when it is obtained from knowledgeable
independent sources inside the entity.
B. Audit evidence that is generated internally is more reliable when the
related controls imposed by the entity are effective.
Which of the following is not one of the primary functions of working papers?
A. Assist the auditor in planning and performance of the audit
B. Assist the auditor in supervision and review of work
C. Provide information useful in rendering other services
D. Support the auditor's opinion on FS and as to compliance with PSA
Which of the following statements about working papers is true?
I. Working papers are the property of the auditor and the client has a right to the working papers prepared by the auditor.
II. Working papers may be considered as a substitute for the client's accounting record.
A. Both statements are true
B. Only statement I is true
C. Only statement II is true
D. Both statements are false
To obtain satisfaction about the reasonableness of the accounting estimates, the auditor can do the following except?
A. Review and test the process used by the management to develop the estimate
B. Make an independent estimate
C. Make sure to include the accounting estimates in the financial statements
D. Review subsequent events which confirm the estimate made
It is the approximation of the amounts of an item in the absence of a precise means of measurement.
A. Testing of calculations
B. Accounting of item
C. Accounting estimate
D. Accounting accounts
The work of internal auditors may affect the independent auditor’s:
i. Procedures performed in obtaining an understanding of internal control
ii. Substantive procedures performed in gathering direct evidence
A. Both statement are true
B. Only statement 1 is true
C. Both statements are false
D. Only statement 2 is true
What is/are the preliminary assessment of internal auditing?
A. Due professional care
B. Scope of function
C. Competence
D. All of the above
