Chapter 13

Question 1

Evaluations of financial information through analysis of plausible relationships among financial and nonfinancial data

Answer 1

Analytical Procedures

Question 2

The combination of types of tests to obtain sufficient appropriate evidence for a cycle; there are likely to be variations in the mix from cycle to cycle depending on the circumstances of the audit

Answer 2

Evidence Mix

Question 3

Combination of tests of controls, substantive tests of transactions, analytical procedures, and tests of details of balances performed in response to risks of material misstatement identified by the auditors risk assessment procedure

Answer 3

Further Audit Procedures

Question 4

The four aspects of a complete audit 1) plan and design an audit approach, 2) perform tests of controls and substantive tests of transactions, 3) perform analytical procedures and tests of details of balances, and 4) complete the audit and issue an audit report

Answer 4

Phases of the Audit Process

Question 5

Procedures used by the auditor to gather evidence about the design and implementation of specific controls

Answer 5

Procedures to Obtain an Understanding of Internal Control

Question 6

Audit procedures designed to test for dollar misstatements of financial statement balances

Answer 6

Substantive Tests

Question 7

Audit procedures testing for monetary misstatements to determine whether the six transaction-related audit objectives have been satisfied for each class of transaction

Answer 7

Substantive Tests of Transactions

Question 8

Audit procedures to test the effectiveness in controls in support of a reduced control risk

Answer 8

Tests of Controls

Question 9

Audit procedures testing for monetary misstatements to determine whether the eight balance-related audit objectives have been satisfied for each significant account balance

Answer 9

Tests of Details of Balances

Question 10

The five categories of audit tests auditors use ti determine whether financial statements are fairly states: risk assessment procedures, tests of controls, substantive tests of transactions, analytical procedures, and tests of details of balances

Answer 10

Types of Tests

Question 11

Focus on both the Blank and Blank of internal control are used to assess control risk

Answer 11

Design and Implementation

Question 12

Types of evidence for Tests of Controls

Answer 12

Make inquiries of appropriate client personnel, Examine documents, records, and reports, observe control-related activities, and reperformance of client procedures

Question 13

Tests of Controls depends on two things

Answer 13

(1) The extent of evidence obtained in gaining the understanding of internal control and (2) The planned reduction in control risk

Question 14

Often referred to as monetary tests

Answer 14

Substantive Tests

Question 15

The two most important purposes of analytical procedures in the audit of account balance are

Answer 15

(1) Indicate possible misstatements in the financial statements and (2) Provide substantive evidence

Question 16

Types of evidence for the tests of control audit procedure

Answer 16

Inspection, Observation, Inquiries of the Client, and Reperfromance

Question 17

Types of evidence for the substantive tests of transactions audit procedures

Answer 17

Inspections, Inquiries of the Client, Reperformance, and Recalculation

Question 18

Types of evidence for the analytical procedures audit procedures

Answer 18

Inquiries of the client and analytical procedures

Question 19

Types of evidence for the tests of details of balances audit procedures

Answer 19

Physical examination, Confirmation, Inspection, Inquiries of the Client, Reperformance, and Recalculation

Question 20

Types of tests in order of increasing cost

Answer 20

Analytical procedures, risk assessment procedures, tests of controls, substantive tests of transactions, and tests of details of balances

Question 21

An exception in a test of control only indicates the likelihood of BLANK

Answer 21

Misstatements affecting the dollar value of the financial statements

Question 22

An exception in a substantive test of transaction or a test of details of balances is BLANK

Answer 22

A financial misstatement

Question 23

Exceptions in tests of controls are called

Answer 23

Control test deviations

Question 24

Analytical procedures only indicate BLANK

Answer 24

The likelihood of misstatements affecting the dollar value of the financial statements

Question 25

4 step approach to reduce assessed control risk

Answer 25

(1) Apply the transaction-related audit objectives to the class of transactions being tested, (2) Identify key controls that should reduce control risk of each transaction related audit objective, (3) develop appropriate tests of controls for all internal controls used to reduce primary assessment of control risk below maximum, and (4) design appropriate substantive tests of transactions for potential misstatements

Question 26

If the results of the tests of controls, substantive tests of transactions, and substantive analytical procedures are not consistent with the prediction then BLANK

Answer 26

Auditors will need to change the tests of details of balances as the audit progresses

Question 27

Each of the factors that affect the tests of details of balances are

Answer 27

Subjective

Question 28

Review phases of audit and transaction and balance related audit objectives

Answer 28

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