CH 13 Overall Audit Strategy and Audit Program
Terms in this set (8)
The auditor looks for an indication on duplicate sales invoices to see whether the
accuracy of invoices has been verified. This is an example of
(1) a test of details of balances.
(2) a test of control.
(3) a substantive test of transactions.
(4) both a test of control and a substantive
test of transactions.
An auditor's decision either to apply analytical procedures as substantive tests or to perform
substantive tests of transactions and account balances usually is determined by the
(1) availability of data aggregated at a high level.
(2) relative effectiveness and efficiency of the tests.
(3) timing of tests performed after the balance sheet date.
(4) auditor's familiarity with industry trends.
The auditor faces a risk that the audit will not detect material misstatements that occur
in the accounting process. To minimize this risk, the auditor relies primarily on
(1) substantive tests
(2) tests of controls.
(3) internal control.
(4) statistical analysis.
A conceptually logical approach to the auditor's evaluation of internal control
consists of the following four steps:
I. Determining the internal controls that should prevent or detect errors and fraud.
II. Identifying control deficiencies to determine their effect on the nature, timing, or
extent of auditing procedures to be applied and suggestions to be made to the client.
III. Determining whether the necessary internal control procedures are prescribed
and are being followed satisfactorily.
IV. Considering the types of errors and fraud that can occur.
What should be the order in which these four steps are performed?
(1) I, II, III, and IV
(2) I, III, IV, and II
(3) III, IV, I, and II
(4) IV, I, III, and II
To support the auditor's initial assessment of control risk below maximum, the auditor
performs procedures to determine that internal controls are operating effectively.
Which of the following audit procedures is the auditor performing?
(1) Tests of details of balances
(2) Substantive tests of transactions
(3) Tests of controls
(4) Tests of trends and ratios
The primary objective of performing tests of controls is to obtain
(1) a reasonable degree of assurance that the client's internal controls are operating
effectively on a consistent basis throughout the year.
(2) sufficient, appropriate audit evidence to afford a reasonable basis for the auditor's
opinion, without the need for additional evidence.
(3) assurances that informative disclosures in the financial statements are reasonably
(4) knowledge and understanding of the client's prescribed procedures and methods.
To test the effectiveness of controls, an auditor ordinarily selects from a variety of
Tests of controls are most likely to be omitted when
(1) an account balance reflects many transactions.
(2) control risk is assessed at less than the maximum.
(3) the understanding of the control structure indicates that evaluating the effectiveness
of control policies and procedures is likely to be inefficient.
(4) the auditor wishes to increase the acceptable level of detection risk.
OTHER SETS BY THIS CREATOR
CH 12 The Impact of IT in the Audit Process
CH 10 Internal Control, Control Risk, and Sec 404 Audits
BUS LAW CH 22 Bankruptcy
BUS LAW CH 21 Secured Transactions
THIS SET IS OFTEN IN FOLDERS WITH...
Chapter 14 Audit Problems
Chapter 13 Homework
Chapter 15 problems
AUDIT Ch. 9 & 10 Book questions