Audit Enumeration 3

Question 1

Steps in using audit risk model

Answer 1

1. Set the desired level of audit risk
2. Assess the level of inherent risk
3. Assess tve level of control risk
4. Determibe the acceptable level of detection risk
5. Design substantive test

Question 2

Components of internal control

Answer 2

1. Control Environment
2. Risk assessment
3. Information and communication system
4. Control activities
5. Monitoring

Question 3

Steps in consideration of internal control

Answer 3

1. Obtain understanding of the internal control
2. dicument the understanding of accounting and internal control systems
3. Assess the level of control risk
4. Perform test of controls

Question 4

Types of substantive test

Answer 4

1. analytical procedure

2. Test of details

Question 5

Audit evidence consist of

Answer 5

1. Underlying accounting data

2. Corroborating information

Question 6

Guidelines for the preparation of working papers

Answer 6

1. Heading
2. Indexing
3. Cross-indexing/cross referencing
4. Tick marks

Question 7

Risks in sampling

Answer 7

1. Sampling Risk

2. Non-sampling Risk

Question 8

Types of sampling risk

Answer 8

1. Alpha Risk

2. Beta Risk

Question 9

Types of audit sampling plans

Answer 9

1. Attribute Sampling

2. Variable Sampling

Question 10

Steps in audit sampling

Answer 10

1. Define the objective of the test
2. Determine the procedures to be performed
3. Determine the sample size
4. Select sample
5. Apply the audit procedures
6. Evaluate the sample results