Day 1 End Quiz Flashcards
Each workpaper, together with appropriate cross-references to other documents in the audit file, should stand alone in documenting the audit evidence obtained and conclusions reached.
True
False
True
Why do people ask questions?
To impress others
To test other people’s knowledge
To get more information and discover something new
To get more information and discover something new
What are the components of audit risk?
Inherent risk, control risk and detection risk
Internal risk, control risk and detection risk
Internal risk, control risk and legal risk
Inherent risk, control risk and detection risk
Checking financial ratios should be done during the completion phase of the audit
True
False
False
This is done during the understanding phase in order to test the effectiveness and design of identified internal controls. Often called a “test of one” procedure.
Test of Control
Risk Assessment
Walkthrough
Walkthrough
Which of the following is not a characteristics of a good question?
Concise
Biased
Easy to understand
Biased
If the expected deviation rate in a test of control is zero and the auditor finds a single deviation, the auditor should conclude that insufficient evidence has been obtained to support reliance on the control, and the auditor may:
Do nothing as this would just be an additional work
Test an alternative control
Report to the senior-in-charge or manager
None of the above
Test an alternative control
The overall objective of the auditor is to obtain absolute assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework.
True
False
False
It serves as our main audit file that contains the records that comprise the audit documentation for a specific engagement.
Working Papers
CaseWare
RSM Orb
CaseWare
During the audit of JF Company, Alice noted that the current ratio increased significantly during the year. In designing the audit program, she should focus on the following except:
Cash restrictions
Obsolete inventory
Long outstanding accounts payable
All of the above
Long outstanding accounts payable
