QUESTION 1
A walkthrough is:
a brief tour of a client’s office, warehouses, manufacturing and other operating facilities
consists of the auditor following one or more transactions through the entire accounting process
normally used to obtain substantive evidence as to whether an account is fairly presented
performed near the end of the audit to be satisfied that all relevant assertions have been tested
QUESTION 2
Substantive tests:
are procedures designed to test for monetary misstatements in financial statement accounts and disclosures
are used to determine whether transaction-related audit objectives have been satisfied for each class of transactions
are used to determine whether ending balances and disclosures in the financial statements are correct and in compliance with the stated accounting framework (e.g., GAAP)
all of the above
QUESTION 3
The auditor observed whether personnel responsible for handling cash have no accounting responsibilities. This procedure is most likely:
a test of controls
a substantive test
an analytical procedure
a test of details of cash balances
QUESTION 4
Audit data analytics can be used in each of the five types of audit tests
True
False
QUESTION 5
Substantive tests of transactions usually include which of the following types of tests?
confirmation
observation
inspection
all of the above
QUESTION 6
Which of the following factors affect the auditor’s decisions regarding the mix of audit evidence to be obtained in the audit?
the nature and effectiveness of the client’s internal control
the level of assessed inherent risk
the results of testing during the audit
all of the above
QUESTION 7
The relationship between audit assurance obtained from substantive tests and tests of controls is best described as follows:
the auditor can obtain almost all of the assurance needed in an audit by performing tests of controls
performing tests of controls may reduce the amount of assurance needed from substantive tests
even when it is more efficient to perform substantive tests, the auditor must rely, at least to some degree, on controls
there is no relationship between the amounts of assurance required by substantive tests and tests of controls
QUESTION 8
Which of the following affect the design of the auditor’s tests of details of balances?
performance materiality
assessed level of control risk
evidence obtained from substantive analytical procedures
all of the above
QUESTION 9
Auditing standards require the auditor to use a written audit program.
True
False
QUESTION 10
If the auditor identifies a significant risk due to either error or fraud, the auditor should:
identify controls that mitigate the risk
design and perform substantive tests to determine whether misstatements occurred
incorporate knowledge of the significant risk in the evaluation of inherent and control risk
all of the above
