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Question 1

Which objective achieved when auditor decides to employ classic variable sampling

Answer 1

To determine inventory quontities on hands

Question 2

SUBSTANTIVE PROCEDURES:

• BANK/AR CONFIRMATION
• INQUIRY
• RECALCULATION
• ANALYTICAL PROCEDURES

Answer 2

Test of CONTROLS:
INSPECTION
OBSERVATION
REPERFORMANCE

Question 3

SUB PROCEDURES
CONFIRMATION A/R,Bank
INQUIRY
RECALCULATION

Answer 3

Test of CONTROLS:
INSPECTION
OBSERVATION
REPERFORMANCE

Question 4

Which is correct about PPS sampling

Answer 4

Auditor controls the risk of incorrect acceptance by specifying that risk level for sampling plan

Question 5

Analytical procedures required for

Answer 5

Planning

Final review

Question 6

When applying analytical procedures which is the best approach for developing expectations

Answer 6

Identify reasonable explanation before talking to client

Question 7

Who’s is true about using analytical procedures as substantive test

Answer 7

Abalitical procedures not required to be used as sub test more used for PREDICTABLE ACCOUNTS

Question 8

DOCUMENTATION REQUIREMENTS FOR ANALYTICAL PROCEDURES

Answer 8

Document BOTH:EXPECTATION AND FACTORS FOR EXPECTATION

Question 9

If an auditors risk assessment based on the effective operation of controls, auditor will:

Answer 9

Identify Internal Controls that likely to detect or prevent material misstatement

Question 10

Auditor used knowledge provided by the understanding of internal control and final assessed risk of material misstatement to determine NET of

Answer 10

SUB PROCEDURES

Question 11

Which factor most important conserving auditor’s responsibility to detect errors and fraud

Answer 11

Risk that mistakes and falsification may cause FS to contain material misstatements

Question 12

Analytical procedures required:

Answer 12

As substantive test-NO

In final review-YES

Question 13

Analytical procedures in the overall review stage of audit performed by

Answer 13

Partner who has comprehensive knowledge of clients business and industry

Question 14

After obtaining understanding of internal control and performing risk assessment auditor decideed to to perform test of controls. Why?

Answer 14

Additional evidence to support reduction in control risk was not cost beneficial to obtain

Question 15

PCAOB standards state relevance of audit evidence DOES NOT DEPEND on

Answer 15

Auditor’s risk assessment. Auditor s risk assessment affects only NET

Question 16

Which statement is correct about reliability of audit evidence?

Answer 16

The more effective IC STRUCTURE, THE MORE ASSURANCE

Question 17

Which of the following procedures would be most effective in reducing attestation risk?

Answer 17

Examination of evidence

Question 18

To determine the sample size for a test of controls auditor consider
TOLERABLE DEVIATION RATE
ALLOWANCE FOR ASSESSING RISK TOO LOW
EXPECTED DEVIATION RATE

Answer 18

Upper deviation rate used to evaluate a balance after sampling was performed

Question 19

Which is correct concerning pps sampling

Answer 19

Auditor controls risk of incorrect acceptance by specifying that risk level for sampling plan

Question 20

Auditor uses knowledge provided by the understanding of internal control and final assessed risk of Material misstatement to determine NET OF

Answer 20

Substantive procedures

Question 21

As the acceptable level of detection risk decrease, an auditor may change

Answer 21

Nature of substantive tests to more effective

Question 22

The objective test of details of transaction performed as test of controls

Answer 22

Evaluate Internal control operated effectively

Question 23

Procedures to search unrecorded liabilities

Answer 23

Vouch a sample of cash disbursement recorded just AFTER year end

Question 24

Auditor determines whether dividend income from publicly held investments is reasonable by computing the amount that should have been received by referring to

Answer 24

Records produced by investment services

Question 25

What doesn’t help to prevent lapping

Answer 25

Preparing bank transfer schedule

Question 26

Who approves write offs of uncollectible accounts

Answer 26

Treasurer

Question 27

Test data not true

Answer 27

Test data consist of all possible and impossible valid conditions

Question 28

Unmodified opinion can’t be issued if

Answer 28

Inadequate discloser of going concern of entity