Question

Question:

Question 183

Processing auditor test data using the client's software application _______.

-will allow the auditor to verify manual controls within the software application are functioning as designed

-may corrupt the client's system, and should not be attempted

-will allow the auditor to verify that the software application is functioning as designed

-should be performed without the knowledge of the client's senior management

Question 19

The tolerable deviation rate _______.

-relates to how many immaterial misstatements the auditor finds

-refers to the extent that audit fees can go over the roughly agreed amount

-is the minimum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk

-is the maximum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk

Question 20

Which of the following refers to a sampling technique used to reach a conclusion about a population in terms of a rate (frequency) of occurrence?

-Benchmarking

-Attribute sampling

-Tests of control

-Control exception

Question 21

If tests of controls indicate that a key control is not functioning as designed, and if other compensating controls do not exist, the auditor should _______.

-All of these answer choices are correct.

-increase the assessed level of control risk

-make appropriate changes to the nature, timing and extent of substantive tests related to the assertion

-decrease the level of assessed detection risk

Question 223 pts

An IT application control will be ineffective _______.

-if it lists an appropriate transaction on an exception report

-if it is consistently used

-if the entity is hacked or experiences some form of phishing

-if it fails to put an invalid transaction on an exception report

Question 23

If the test results do not confirm the preliminary evaluation of controls, _______.

-the auditor should obtain additional written assurances from management

-the auditor should consider withdrawing from the engagement

-the auditor will consider whether there is a compensating control that might detect and correct a misstatement missed by the original control being tested

-the auditor will consider whether there is a compensating control that might prevent and correct a misstatement missed by the original control being tested

Question 24

Working paper documentation for test of controls should include _______.

-all client-owned documents which will be returned to the client once audit fees are paid

-the auditors' opinion of absolute assurance about control risk, and the basis for their conclusion (e.g., underlying evidence)

-the auditors' conclusion about control risk, and the basis for their conclusion (e.g., underlying evidence)

-comments on this year's audit by the prior auditor

Question 25

If the assessed risk of material misstatement for an assertion is high, auditors need to gather more persuasive audit evidence.

Group of answer choices

True

False

Question 263 pts

An audit strategy can take _______.

-a reliance on controls approach, a substantive approach, or a combination of both

-neither a reliance on controls approach, nor a substantive approach

-an approach whereby only internal control is audited

-a reliance on procedures approach, a substantive approach, or a combination of both

Question 27

After auditors have completed testing controls and drawn a conclusion about control risk, _______.

-they should withdraw if control risk is assessed as high

-they are ready to issue the audit opinion

-they make decisions about the nature, timing, and extent of substantive testing

-they make decisions about the nature and timing of substantive testing

Question 283 pts

An auditor mailing positive confirmations is an example of _______.

-a substantive procedure

-a compilation engagement

-a review engagement

-a test of internal control

Answer 1

SOLUTION IS -

18. C - will allow the auditor to verify that the software application is functioning as designed.

19. C - is the maximum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk.

20. C - Tests of control

21. B - make appropriate changes to the nature, timing and extent of substantive tests related to the assertion

22. D - if it fails to put an invalid transaction on an exception report

23. C - the auditor will consider whether there is a compensating control that might detect and correct a misstatement missed by the original control being tested

24. C - the auditors' conclusion about control risk, and the basis for their conclusion (e.g., underlying evidence)

25. TRUE

26. B - neither a reliance on controls approach, nor a substantive approach

27. D - they make decisions about the nature and timing of substantive testing

28. A - a substantive procedure