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Online Quizzes
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1

Which of the following is not a component of audit risk?
A)Control Risk.
B)Detection Risk.
C)Sufficiency Risk.
D)Inherent Risk.
2

Which type of risk does an auditor have control over through substantive auditing procedures?
A)Control Risk.
B)Detection Risk.
C)Sufficiency Risk.
D)Inherent Risk.
3

Which type of risk does the management of a company have the most control over in the short term?
A)Control Risk.
B)Detection Risk.
C)Sufficiency Risk.
D)Inherent Risk.
4

Which of the following descriptions best describes inherent risk?
A)Auditors fail to discover a material misstatement in the course of their audit and do not modify their audit opinion.
B)A company's internal control fails to identify a material misstatement in a timely fashion.
C)Auditing procedures fail to find a material misstatement.
D)The possibility that a material misstatement will occur in any given account before considering internal control.
5

Which of the following is least likely to serve as a substitute for performing other audit procedures?
A)The physical observation of the counting of company inventory.
B)Sending letters to debtors or creditors of the company to confirm amounts the company owes or is owed, respectively.
C)Tracing an amount on the financial statements back through the accounting system to the underlying supporting documentation.
D)Obtaining a representation letter signed by top management.
6

The type of transactions that ordinarily have a high inherent risk because they involve management judgments or assumptions are referred to as:
A)Estimation Transactions
B)Nonroutine Transactions.
C)Routine Transactions.
D)Substantive Transactions.
7

Which of the following ordinarily is considered the weakest form of evidence?
A)Actual physical evidence.
B)Documentary evidence obtained from outside the company.
C)Documentary evidence obtained from inside the company.
D)Replies by company employees to auditor oral inquiries.
8

Which method of analytical procedure analysis is most useful because many expenses, such as cost of goods sold, might be expected to bear a predictable relationship to net sales?
A)Horizontal analysis.
B)Reasonableness analysis.
C)Trend analysis.
D)Vertical analysis.
9

One type of analytical procedure is trend analysis. Which of the following is the best example of trend analysis?
A)Comparison of company financial ratios to that of its competitors.
B)Comparison of accounting records to budgeted amounts.
C)Comparison of inventory levels over the past 3 years.
D)Comparison of interest expenses to outstanding loan balances.
10

Which of the following is not one of the primary approaches auditors use when evaluating the reasonableness of accounting estimates?
A)Review and test management's process of developing estimates.
B)Confirm estimates directly with outsiders.
C)Independently develop an estimate of the amount to compare to management's estimate.
D)Review subsequent events or transactions bearing on the estimate.
11

Audit documentation relating to the A Company audit should be sufficient to allow which type of auditor to understand the audit work performed?
A)Any auditor.
B)Any auditor that works on A Company's audit.
C)An experienced auditor.
D)An experienced auditor with experience on A Company's audit.
12

Documentation may not be deleted from the working papers after the:
A)Audit report delivery date
B)Date of the audit report.
C)Documentation completion date.
D)Final day of fieldwork.







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