Question

10. Which of the following ratios, used in analytical review would not assist the auditor in planing ee audit? A. Gross profit margin B. Inventory turnover C. Receivables collection period D. Earnings per share 11. In which of the following stages of audit, would it be inap propriate to conduct an analytical review? A. Audit completion 8. Substantive testing C. Compliance testing D. Audit planning 12. Which of the following statements are true in respect of detection risk? 1) If inherent and control risk are assessed to be low then the auditor will need to lower the detection risk 2) If inherent and control risk are assessed to be low then the auditor will need to increase the size of samples when substantive testing A. 1only B. 2 only C. Both of them D. Neither of them 13. Which of the following statements are true in respect of substantive procedures? 3) Auditors will note and aggregate errors discovered during the course of substantive testing. The level of substantive testing can be reduced if tests of controls show that controls are operating effectively 4) A. B. C. D. 1 only 2 only Both of them Neither of them 14. You are a newly appointed audit firm and your client has asked you undertake some lucrative management consultancy work in addition to the annual audit. This situation is known as A. A self-review threat . An advocacy threat C. A self-interest threat D. An intimidation threat

Answer 1

10. Ans Option C). Receivable collection Period

11.Ans Option D). Substantive testing