University of Tasmania

BFA 713

CHAPTER 08

1)After obtaining an understanding of internal control and assessing control risk of an entity, an auditor decided not to perform tests of controls. The auditor most likely decided that:

Assessing control risk at a level below high most likely would involve:
An auditor may decide to assess control risk at high for certain assertions because the auditor believes:
After obtaining an understanding of an entity’s internal control system, an auditor may assess control risk at a high level for some account balances because he or she:
Test of controls must be performed:
A procedure that would most likely be used by an auditor in performing tests of controls that involve segregation of functions and that leave no transaction trail is:
Which of the following audit tests would be regarded as a test of controls?
Which of the following procedures most likely would not be included as part of an auditor’s tests of controls?
Evidence about which aspect(s) of internal control is usually gained when the auditor is assessing control risk?
Based on a study and evaluation completed at an interim date, the auditor concludes that no significant internal accounting control weaknesses exist. The records and procedures would most likely be tested again at year-end if:
An auditor wishes to perform tests of controls on a ABC Ltd’s cash disbursements procedures. If the control procedures leave no audit trail of documentary evidence, the auditor most likely will test the procedures by
When undertaking tests of controls which are related to controls built around a major transaction flow, which assertion would be of least interest to the auditor?
While auditing at Bandana ltd and undertaking tests of controls which are related to controls built around their integrated sales and purchases system, which assertion would be of least interest to you as auditor?
In the examination of which of the following general ledger accounts will tests of controls be particularly appropriate?
Tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about management’s assertion of:
Which of the following tests of control most likely would help assure an auditor that goods shipped are properly billed? Checking that the client has:
While auditing Georgie ltd you have identified as a risk whether all sales have occurred. The procedure that will be most effective in verifying this assertion is:
To determine whether internal control structure policies and procedures operated effectively to minimise errors of failure to invoice a shipment, the auditor would select a sample of transactions from the population represented by the:
For effective internal control, the billing function should be performed by the:
Tracing shipping documents to pre-numbered sales invoices provides evidence that:
Tracing bills of lading to sales invoices provides evidence that:
Which is not a key segregation of duties for the revenue process? Different parties should: .
All of the following are important controls over credit memos except:
When undertaking tests of controls for revenues, auditors are more concerned with controls associated with the occurrence assertion than they are with the completeness assertion because:
An auditor selects a sample from the file of shipping documents to determine whether invoices were prepared. This test is performed to assess which assertion for sales?
While auditing the sales system of Candle pty ltd you have determined that there is a risk of sales being misstated, and that this potential misstatement is associated with the completeness assertion. Which of the following would be an appropriate audit response to this assessed risk?
Which of the following is a test of controls for the control assertion of completeness for revenue?
An auditor most likely would limit substantive audit tests of sales transactions when control risk is assessed as low for the occurrence assertion concerning sales transactions and the auditor has already gathered evidence supporting
Beta pty ltd posts to its perpetual inventory records directly from its sales invoices. Inadequate control procedures over the invoicing function allow goods to be invoiced that are not shipped. The inadequate control procedures could cause an:.
Beta pty ltd posts to its perpetual inventory records directly from its sales invoices inadequate control procedures over the invoicing function allow goods to be shipped that are not invoiced. The inadequate control procedures could cause an: .
Which of the following internal controls would be most likely to deter the lapping of collections from customers?
Purchase cut-off procedures should be designed to test whether all inventory:
The cut-off assertion for accounts payable involves testing whether all accounts payable are:
Which of the following is a primary function of the purchasing department?
To ensure the completeness of purchases made during the year, the auditor should:

While undertaking the audit of the payables and disbursements system at Broil Ltd, you find that the internal control questionnaire indicates that an approved receiving report is required to accompany every cheque request for payment of merchandise. Which of the following tests of control would provide you with the greatest assurance that this control is operating effectively?

An audit client erroneously recorded a large purchase twice. Which of the following tests of control would be most likely to detect this error in a timely and efficient manner?

When goods are received, the receiving clerk should match the goods with:
In a properly-designed accounts payable system, a voucher is prepared after the invoice, purchase order, requisition and receiving report are verified. The next step in the system is:
In auditing the purchases system, an auditor vouches a sample of entries in the voucher register (accounting records) to the supporting documents. Which assertion would this test of controls most likely support?
Tests of controls for the occurrence assertion for purchases include all of the following except:
Which of the following is the most effective test of control to detect vouchers prepared for the payment of goods that were not received?
Which of the following internal control activities is not usually performed in the accounts payable department?
In a properly-designed purchasing process, the same employee most likely would match suppliers’ invoices with receiving reports and also:
Tests designed to detect payroll payments made after the end of the year that have been incurred in the current year provide assurance about management’s assertion of:
To check the accuracy of the accounting records with regards to the recorded hours worked, an auditor would ordinarily compare time sheets with:.
Selected employee time cards that have been approved by supervisory personnel during the year are compared to the payroll register to ensure that they have been recorded. Which of the following assertions for payroll expense does this test.
Which of the following procedures would be most likely to be considered a weakness in an entity’s internal controls over payroll?
Selected items from the payroll register are compared to employee time-cards that have been approved by supervisory personnel. Which of the following assertions for payroll expense does this test?
Possible misstatements related to the occurrence assertion for payroll transactions include all of the following except:
When reviewing the audit working papers of coffee ltd you find the following audit populations were used as the basis from which to select a random sample in response to an account balance, assertion at risk and an appropriate audit procedure. Which of these populations would be of most concern to you as being an inappropriate audit population, given the assertion at risk and the audit procedure selected?

Auditing by testing the input and output of an it system instead of the computer program itself will:
An auditor will use test data to gain certain assurances with respect to the:
Which of the following is a significant difference between the test data (test deck) approach and an integrated test facility (ITF)?
When testing a computerised accounting system, which of the following is not true of the test data approach?
Which of the following is not the errors that an auditor might include in the test data when auditing a client’s it system?
An auditor who is testing it controls in a payroll system would most likely use test data that contain conditions such as:
An approach to testing real-time processing of a computer-based information system is known as the integrated test facility (ITF) technique. This approach involves:
Jones Ltd has numerous customers. Each customer file contains name, address, credit limit and account balance. The auditor wishes to undertake a test of the automated control that does not allow account balance to exceed credit limit. The best procedure for the auditor to follow would be to:
In a daily computer run to update cheque account balances and to print out basic details on any customer account that was overdrawn, the overdrawn account of the computer programmer was never printed. Which of the following control procedures would have been most effective in detecting this irregularity?

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University of Tasmania BFA 713 CHAPTER 08 1)After obtaining an understanding of internal control and assessing control risk of an entity, an auditor decided not to perform tests of controls

Accounting

University of Tasmania

BFA 713