AUD 10 Flashcards
Which of the following is an auditor’s client MOST LIKELY to use to perform queries requested by the auditor of a relational database?
Data manipulation language
In the audit of which of the following types of profit-oriented enterprises would the auditor be MOST LIKELY to place special emphasis on testing the controls over proper classification of payroll transactions?
A manufacturing organization
Which of the following elements in an entity’s internal control structure includes the development of personnel manuals documenting employee promotion and training policies?
control environment. this sets the tone of the organization
A cash shortage may be concealed by transporting funds from one location to another or by converting negotiable assets to cash. Because of this, which of the following is vital?
simultaneous verification’s; the concealment will be exposed.
which of the following is not a procedure performed primarily for the purpose of expressing an opinion on the financial statements, but my bring possible illegal acts to the auditor’s attention?
review of policies concerning effectiveness of management’s decision making policies.
On 3/1, Green CPA expressed an unqualified (unmodified) opinion on Ajax’s financial statements. on 7/1, Green’s internal inspection program discovered that engagement personnel failed to observe Ajax’s physical inventory. Green believes that this omission impairs Green’s ability to support the unmodified opinion. If Ajax’s creditors are currently relying on Green’s opinion, Green should first:
undertake to apply the alternative procedures that would provide a satisfactory basis for Green’s opinion.
in testing controls over cash disbursements, an auditor would be post likely to determine that the person who signs checks also
is responsible for mailing the checks
an auditor’s purpose in reviewing the renewal of a note payable shortly after the balance sheet date most likely is to obtain evidence concerning management’s assertions about
presentation and disclosure
in assessing control risk, an auditor ordinarily selects from a variety of techniques, including
reperformance and observation.
holding other planning considerations equal, a decrease in the number of misstatements in a class of transactions that an auditor could tolerate most likely would cause the auditor to
perform the planned auditing procedures closer to the balance sheet date
which of the following types of audit evidence is MOST reliable
confirmation on account information
An auditor discovered that a client’s AR turnover is substantially lower or the current year than for the prior year. This may indicate that:
there was an improper cutoff of sales at the end of the year.
the objective of test of details of transactions performed as test of controls is to
evaluate whether internal control structure procedures operated effectively
analytical procedures used in risk assessment for an audit should focus on identifying
areas that may represent specific risks relevant to the audit
the reliance placed on substantive tests in relation to the reliance placed on internal control varies in a relationship that ordinarily is
inverse
