Audit Technical Training (Opening quiz)

Question 1

The following are common approach for testing cash and cash equivalents balances, except:

Obtaining bank confirmation letters

Reconciling the cash account to the bank account statement

Casting the reconciliation

None of the above

Answer 1

None of the above

Question 2

Name the techniques available to auditors under GAM 530 for selecting samples from a population.

Monetary unit sampling

Random selection

Haphazard sampling

All of the above

Answer 2

All of the above

Question 3

High-value scoping is an audit sampling approach this is used by auditors to obtain audit evidence results of which can be projected over the entire population.

True

False

Answer 3

False

Question 4

Which type of testing requires the auditors to set an expectation and compare this to the number reported by the client?

Tests of control

Tests of detail

Substantive Analytical Procedures

Answer 4

Substantive Analytical Procedures

Question 5

Test of controls alone is permitted as a risk response technique for a balance or transaction?

True

False

Answer 5

False

Question 6

Where do you think High Value Scoping would be more useful in an audit of fixed assets?

Where the fixed assets balance is made up a few large assets of high value

Where the fixed assets balance is made up of lots of lower value items

Answer 6

Where the fixed assets balance is made up a few large assets of high value

Question 7

If an auditor chooses to physically verify that a company is using a vehicle, which assertion are they addressing?

Existence

Ownership

Answer 7

Existence

Question 8

The following are the principal tests used to confirm the existence of trade receivables balances, except:

Customer confirmations

After-date cash review (also referred to as subsequent receipts testing)

Assessment of expected credit losses

Provisions - review aged receivables

Answer 8

Assessment of expected credit losses

Question 9

As long as the determined sample size is selected from a population it does not matter if it is a representative of the entire population.

True

False

Answer 9

False

Question 10

Will the sample size be higher or lower with a higher assessment of assessed risk?

Higher

Lower

Answer 10

Higher

Question 11

The auditor attends the year end inventory count. Which assertion will they be looking to address? Please select all that apply.

Completeness and Cut-off

Existence and Occurrence

Accuracy, Valuation, and Allocation

Rights and Obligations

Answer 11

Completeness and Cut-off

Existence and Occurrence

Accuracy, Valuation, and Allocation

Question 12

RSM Orb mandates sampling.

True

False

Answer 12

False

Question 13

Auditors check that everything in the financial statements is correct. Is it true or false?

True

False

Answer 13

False

Question 14

Which audit assertions are relevant to bank/cash? (Please select all that apply)

Completeness

Accuracy

Existence

Rights and obligations

Cut off

Occurrence

Valuation

Answer 14

Completeness, Existence, Cut off, Occurrence, Valuation

Question 15

Which audit assertions are relevant to wages? (Please select all that apply.)

Completeness

Accuracy

Existence

Rights and obligations

Cut off

Occurrence

Valuation

Answer 15

Accuracy, Cut off, Occurrence

Question 16

Can attribute sampling be used by auditors where the occurrence of recorded sales invoices is to be tested?

Yes

No

Answer 16

Yes

Question 17

Materiality is determined at the planning stage of the audit.

True

False

Answer 17

True

Question 18

If the auditor concludes that the controls have been designed and implemented appropriately then the auditor may plan tests controls and, therefore, will assess control risk as low?

True

False

Answer 18

True

Question 19

The auditor may inspect the purchase invoice for a PPE asset addition. Which assertions can likely be covered by inspecting the invoice? Please select all that apply.

Rights and Obligations

Accuracy

Cut-off

Existence

Answer 19

Rights and Obligations, Accuracy

Question 20

What is the name of the collective set of standards that auditors generally follow when conducting an audit?

International Financial Reporting Standards

International Standards on Auditing

International Law

All of the above

Answer 20

International Standards on Auditing