Quiz (September 23, 2021)

Question 1

A listing of all the things which the auditor will do to gather sufficient competent evidence is
an audit program.

T or F?

Answer 1

TRUE

Question 2

Audit programs should be designed so that most of the required procedures can be performed as interim work.

T or F?

Answer 2

FALSE

Question 3

Analytical procedures used a risk assessment procedures are performed primarily to assist the auditor in identifying areas that may represent specific risks.

T or F?

Answer 3

TRUE

Question 4

The auditor should properly plan engagements to enable proper on-the-job training of employees

T or F?

Answer 4

FALSE

Three main reasons why the auditor should properly plan engagements:

• To enable the auditor to obtain sufficient appropriate evidence.
• To avoid misunderstandings with the client.
• To help keep audit costs reasonable

Question 5

Inherent risk is directly related to detection risk and directly related to the amount of audit evidence.

T or F?

Answer 5

FALSE

Inherent risk is indirectly related to detection risk and directly related to the amount of audit evidence.

Question 6

Risk assessment procedures would include reperformance of client’s procedures

T or F?

Answer 6

FALSE

Risk assessment procedures would include all of the following:

• Inquiries of management and others within the entity.
• Analytical procedures.
• Observation and inspection.

Question 7

Inherent risk is the susceptibility of the financial statements to material error, assuming no internal controls.

T or F?

Answer 7

TRUE

Question 7

The most important consideration in developing the audit plan and audit program is the client size

T or F?

Answer 7

FALSE

The most important consideration in developing the audit plan and audit program is the audit risk model used in its planning form.

Question 7

The purpose of analytical procedures during the audit planning stage is to aid in planning the observation of physical inventory

T or F?

Answer 7

FALSE

The purpose of applying analytical procedures in planning the audit is to assist in planning the nature, timing, and extent of auditing procedures that will be used to obtain evidential matter for specific account balances or classes of transactions.

Question 7

The purpose of analytical procedures during the audit planning stage is to aid in planning the observation of physical
inventory

Answer 7

FALSE

Question 7

In the planning phase, the auditor normally considers the kind of opinion that is likely to be expressed.

T or F?

Answer 7

FALSE

Question 8

A listing of all the things which the auditor will do to gather sufficient, competent evidence is the audit program.

Answer 8

TRUE

Question 9

During audit planning, the auditor ordinarily reviews and evaluates client’s internal control.

T or F?

Answer 9

FALSE

During audit planning, the auditor obtains understanding of the client’s business and industry

Question 10

In the planning stage, an auditor usually requests for the confirmation of the bank balances

T or F?

Answer 10

FALSE

Question 11

Analytical procedures are required to be done during the testing phase of the audit.

T or F?

Answer 11

FALSE

Analytical procedure will be required during the planning phase and the final review of the overall audit engagement.

Question 12

A auditor should design the written audit program so that each account balance will be tested under either test of
control or tests of transactions.

T or F?

Answer 12

FALSE

An auditor should design the written audit program so that the audit procedures selected will achieve specific audit objectives.

Question 13

The audit program usually cannot be finalized until the engagement letter has been signed by the auditor and the
client

T or F?

Answer 13

FALSE.

The auditor should obtain a sufficient understanding of the entity and its environment, including its internal control, to plan the audit of the entity’s financial statements.

Question 14

In designing written audit programs, an auditor should establish audit objectives that relate primarily to the financial statements assertions

Answer 14

TRUE

Question 15

The audit plan and related program should no longer be changed once the audit is started

T or F?

Answer 15

FALSE

Question 16

An audit program should be designed for each individual audit and should include audit steps and procedures to provide assurance that the objectives of the audit are met.

T or F?

Answer 16

TRUE