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    18 views22 pages

    5 6282732427500584984 PDF

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    brooke

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    © All Rights Reserved
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    of 22
    AUDITINGTHEORY (>) ‘ ea te pg oF tien Bl Repleen haw tune infermatioe C= Thad recommendeticns Ia wrung at & pants Pinsntts rend cna Y An audit ofinancial quiches is eondote to dstermine ifthe ” vet Financial statements ire sate) in aedoelRiee Wi ing fener, 1, __clicap’s internal control is functioning ax inteted. jization is operating cificienily and effectively. audithe is following spi 1X Non-assurance engagements inclede all of A Combliance audit. B, —Agrefd-upon procedures. replace of tx return whore no coetuion i expressed 9. Management consult 3 For assurance en; c Dd. W Following, FXCEPT itd are called _ x 7 B. ¢ D. —_Exanijnations. ‘Gand ASSURANCE SERVICES (¢ applicable financial procedures or rules set down by|some inigher authority. assurance engagements J When » CPA expresses an opinion on financial stsemens, his or lea extend (0 TA. Whether the results of the client's operating decisions financial statemeats. B. ‘fhe underlying wisdom of the client's management éecisi ©. Activg participation ir D. _ Anongoing responsibility forthe client's solveney. fairly presented ia the the implementation of the advice gived to the client. © Tresabjese mane of ap astyance pagent sea ake bellowing os, RCP valuation of a capital investert propa. B. _Histoncal or prospective fname sztements E.— Company’sintomul conto! D. Performance of aa entiy that c¢ YC Which ofthe following eriteria is urigue tthe su A. independence B. General competen C. Due professional exec D._— Familiprity with the part {fwhich the auditor's 8, What are the three (3) most com vices? x ‘A. Audits, reviews and othe ees. B. — Andits| review and cormpilatius CC.» Aadits| compilations and other assur D.__ Reviews, compitations and other assurvne: surviee. 8. Which of the following) attibutes is MORE closely associated with assurance CPA firm than with othar-lines of professional work? ‘A. Indepepdence. icace. informed in current professional developments. serves the aveus cf management | [hich is performer by a professional practitioner as an ‘ch is incidentally cancerrd with the detection and Pj herein (hv: audiras showd be independent of manage 8 Internal auditing relates A. Audit Bl Audit C Augit DB. Audit mental itd. : AT) One of the government fuditing standards which is NOT observed by indepe sector is: A. Areviel shall be made of comoliance vith legal and statutory B. —Ancevaluation shall bs vaade of de system of inter} control. leervives performed by otis part \dspendent contractor. inion of fraud. rent both in fact and in ¢ CAS in the private equirements. Sufficient competent evidential matter shall be obtng observation, inquiries and D__Theautitiato be adequately planet ard wien 3X An audit designed to evaluate the efficiency and effectiveness 2! “would not come under the tite of. AD Compliance andi Management © Operational sus D. Performance audit OB. toteroalauiing is consdered te be part of an orgaiztion's ‘A, Conbol envizonment B._Extemal controls, Accounting stem Iniernal contol procedures. {Operational auditing does not focus on A. Complisnce B. Eificioney. Economy ‘an organizatip BL Extatncnes (2d reasivenen of he appicaten of Philippine Stydards on Auditing (SAS) 8 "Ar Tounderate prope dy and luaton of he Oxsng ne Bl Nottoobuinchentsby satan C. To charge fees fair! ‘Which of the following describes MOST completsly how the profession defines A. Accepting respons Code of Conduet BB. __erforming an audit from the public's point of view C. Avoiding the appearance of a significant interest in an audit D.__ Resisting a client's reluctance to reveal evidence 3X2; What particaar auitelated services provide NO assurance? ‘A. Agreed-upon procedure and compilation engagements B. Review and compilation engagements C.—Agreed-upon procedure and review y D. _ Audit and review engagements "Y6. ‘Most of the independent auditor's work in formulating, an opinion on ‘tinancial and reasonably in relation to costs of engagements, D.__ To inspect all fixed assets acquired during the vear lity to act professionally and in accor eagements ‘A. Obtaining and examining evidential matter B. Examining cash transactions Gaough inspection, rion : etna assistants are to be properly ‘supervised. mn or some part thereof the anditor: at control lependence? ‘with the professional t's interest statements consists of C. Comparing recorded accountability with physical existence of pfoperty D. Studying and evaluating interaul control 1 An external audit: ‘A. Complements an interel audit B. —Overlaps an internal audit CC. Contradicts aa internal audit DB. Confirms an internal audit : , Philippine Stendards va Auditing (PSAs) sbould be looked upon by practitioners ‘A. Minimum ste:aeds of performance which must be acl engagement B. _Leals to save for, but which are not wchievable. C_ Maximum standards which decote excelent work, D. _Beachaark to be used on all audits, reviews, and compilations. ‘An anditor should NOT renéer a report on: ‘A. The achivvability of forecasts 4 B. Client internal control C.— Management performance D. _ Quarterly financial information / Which of the following types of audite would be intended to cover environ’ ‘impact on the financial stateinents? ‘A. Anenvironmentel audit, B. Aprogram audit. CC. Aoperational mudit. D. A financial statement audit. wved on cach audit tal matters that may a HW The batimar” of hing is: B Professional judgment Co Magik audit tecmnology D. ‘and audit risk 2Y Which ofthe fotowing voneee d auling standards | TAL MCW atements does NOT propery describe limitation ofan aut? tement assertions cannot be audited. B. Many audit con B__ Many suit concason are made onthe bss of oxmining a samp of evidence § tite andcaciesnes cn case airs to veo pera evidence, Song eviereesopporing peo setts in te nial wens mast be (Bwana aoc ten presents of anes t important qualities for an operational auditor? ea ‘A. Competence and tschnical training B. Independence and compstence C. _ Persinality and appearance ti game bk ada liens xe 2G Which government afting staard is NOT cbserved by wndependent CPAS it rflew tal be made of compliance wih legal and satan rea rement B! The buat tobe adequately planned and assistants ae tobe propely supervised ation sall made ef te system of intra con ent computent evidential matter shall be ‘obtains tough inspection, ston, ingurns an confemations ee OH clstaction detec inependent avin and intra suiting? acerca for bth vaiity and vlevance of evidene, id almost exclusively with validity Witce, whereas external auditors are the private sector? interpal auditors are concern ial auditors are employees of the independent contractors. c ¢ span of coverage goes beyond financial auditing to encompass ‘opesptional and performance auditing, D. onent naditors represent tizd party users external to the auuitee entity, whereas ‘auditors report directly fo management. jis ere MOST similar? land independent Financial statement audits. ial audits ond independent firancial statement audit “onal wudite and compliance audits. Financial statement audits ard oper | c. D. jonat audits. 2S. Toherent risk and control risk collectively are known as | | ‘of material misstatement CC. Thejdual risk team D. _ Thelrisk of information dissemination Hee eae tne extent to which the desired results of an activity established by the vorizing body arc being achieved. legislative or other: | SSA. Program results audit B. — Fingacial-related audit. C. —_Eeobomy audit. D. __ Effifiency audit. 30, of the followihg is an objective of a review engagement? aI modifications should be made to such financial statements ing whether materi th ly accepted accounting principles. iting that he Financial statements, in all material respects, fairly present the B. al position and operating results ofthe client. c i oe positive opinion that te Financial information i presented i= conformity woe etceed exons PNB as re ‘have agreed as to procedures that will be Sherali TIMI ls at cen A. Inquiry and anal; rival procedures. B. Ass ‘sement of accounting and internal control systems. Raepette Ferret per nee rena ete rie, go ape sinh ie taxis. {he Joga minima Norse to change upon audit Suppored by tor cents oie financial tatoments Computed in coaformity with gsneral'y accepted accounting p 1 sei Se ety ony an ntl occ, Reptiog review procedares, which of the following statements is INCORKECT? 7 pOB> “There is a greater risk that misstatements will not be detected in an audit than in a review. 2. The auditor should apply judgment in determining the specific oatur, timing and extent of review procedures ‘The auditor should apply the same materiality considerations as! would be applied if an audit opinion on the financial statements were given. 4, The judgment as to what is material is made by reference to the information on which ‘the auditor is reporting and the nceds of those relying on that tion, not to the level of assurance provided. = CLIENT ACCEPTANCE, AUDIT FS AUDIT. ‘Preliminary arrangements agreed fo by the auditors and the client by the auditors. The beat place to set forth these arangomcats isin: be reduced to writing 3 a 1. _‘A memoranda tbs plored inthe permanetsrcton ofthe eodking working papers. An andit engsgenent leer ‘A Bay totbe prepared each period fr areuring autitengagemett B. _Ispropnred frie benefit of tne autor, audit elet end gener public G.__Shatlinciade te epeiic audit procedures to be pertomed vy the auditor tothe io upon te commencement the audit | B.__ Isusuaily sent by a | SK, The cagngemeat eter: A Con aes eal spon te clit | Can be sed to alter the auditor's expenses under the sanfards on aditing, c Is used only if it is an engagement, but fas no effect for Feview or compilation i servis D. ‘Affects the CPA firm's respnsiility to extemal users af auitel financial statements. | SS Opin fue towing acts ends i sediog LEAS TANF t plan an otf | ‘A. Financiol pressures affecting employees. | B. High thmover of senior management. C. Inadequate monitoring of sheiient controls D.__Inabillty to yoncal positive cashflows fom operations. 2X. Which one of these is NOT a type of evizence Wat would he used fr both obtain an Understanding ofthe corte smuctre and testing the cons? "A. Reperformance BIoquinis. _nspetion D.__ Observation, Which ofthe following ie NOT generally considered a financial statemegt audit ak factor? oS tanagement operating and financing decisis are dominated y top management B. Rate of change in the entity's industry is rapid. €._-Arnew cient wih prio? aut history 5. Poottabiiy ot the enty relative to te industry i inconsistent, Y ative scepter Sen heme Sine “A "Substantive tet should ineease B.Shstantve tos should decreas €._Testsof contol should increase D,__ Testofeontvos shoul dora. YE tawhicn the folowing statins would an pet be LEAST Wel cana by a CPAP Seance plication of ancouningsethods tn compating inventory balfno B. Determination of fair values using specialized statistical tect C.__Legal opinions conceming interpretations of engagements, states Tike land and buildings. provided from: pes. sand regulations. Swans pe ras a (Cebus ey meet net he at ete tients arte ober aceon "A.___Jess than or equal tothe preliminary judgment, eaae Peeper raagg eed EEF ete eee Ceee eee eee ceeaaeeceeceaceceaaae cgay aay 1 prein nu judgne M0 he relma jut the prelisninary judgment, cryin abot ay, TaN videnes required Jona low pcs wou than fora high pov amount. epndece i requred fore tow fem anu an Oras ou oun evens ogare fr cterow ergo aos to eainsip here tan he peso umount of evens needed. Dd - owing character s" "9 Sey een Wer of senior accounting personnel is low. recently purchased additional shares of te entity's stock. _D. The ate of change ia the enti st I Aas procs ge ia the entity's industry is slow B Cc Test D. ide e ith respect to errors hid itor should plan to, "A. Seardh for errors or iregularities that wonld have @ material effect on the FS. B for irregularities that would have a material effect and for errors that would ial statements, haveleiner material or imaterial effect on the finan C.— Sear for errors that would have a material effect and for iregolariies that would dave either metcral or immateril effect onthe financial statements. isobver errors oF bveguarities that have ether matrial or immuverial effect on the 1g. With respect to planni "A. Itis Receptable to perform t port B. An engagement should not be accepted after the client's year-end. ifventory count aust be observed at year-end. "Matfing decisions must be made prior to completion ofthe planning singe. fit planning process most likcly to te agreed spo sation of the rocedures to be performed. ‘nthe inquiry of the clients aftomey. B. Pending legal matters to br included vdertaken to discover litigation, claims, and assessments. “ovide a sufficient basis for the auditor's opinion. D . "S soccns Dinter cosot te ras te oD wos nt petal ae ue [cd hy iliac a snare Sviend pO, See ny sot fen and werdngenpia Ble co Cll by ani ements ih Seem oe oR er arg net net ose yu. | he oe nang oo 2 engage ft katy he | Dicer | of — rata wensatos nd vet FER re el cause ofl coal wala j C.— Relafed party cznsactions. | D Fae wre act props en lag aaenos ates TRUT? f gen tii dats with the client before audit strategy is the determin: c D. cto be gathered 10 p rich of ee followbe i LEAST ikely considered by dhe auditor in establishing the overall audit strategy and developing the audit plan? reife ms of payment pertaining to other auditors and their respective clients Br Undbrizanding of the accounting and interval vontol systems. C. Ris and snatesality D. vyalverycnt of other auditors in the audit of major subsidiaries JE Wich of the fol i NOT considered by the CPA wher he makes an overall aust plan? A The F the representation Kt. Bl Thekeect of information cecknology on the aut E G Sr ctr complen accounting, areas including those involving accounting pates. eee and timing of ports and other communication wit the eat that are cexpgcted under the engagement. 9X Tee auditor should gn the writtcn audit program so that: —, ‘A. Treaudit procedures selected il eRe specific audit objecHve* A _Shfctansve tests prior to the balance sheer da ill mini ._Sbstantve ts Poxions wil be sleet for SUMS CA net eed wer mer es FS Is oF tests of nransactions. designing audit programs, en auditor should establish specif to the. fie ausit objectives that related primarily A Financial statement essen. B. _ Selrcted audit techniques. 2 FRminpot aude proeeoes § Cineetat arms idence 3x cost-benefit considerations are part of ati planning. In relation ts Cont Sol ie LEAST sry pert! oe yical peur: BS Teawofconoa : 2 Tewsottaimes. S._Sebtanave tess of anertions. 1 @ Pema aga any CASNOT te ale Oe nel proms analy CAN OT Ns tral concal as Bee complet | i Gonsieran owtnc sed ny he editor te CEN aa en hev aca communsted one audit Opens, Reparation sms Un performed and docefente. Ben orde enn ney NOH nee onlay ae the lowing ane HNO och orev, eessn, Geer ev cot otreneftecg the eondut of ays snes G.__Legiataion and reguiation that significantly affect the entity's qperations Seen Sees ml ny speci pace wen obcmsing 2 andenteding of an ny tral comel as suite Wren oan er that for bees Cf enrol rate ae on pps anal but nett on en Sosa ny crema emt rp ’ which of the following audit wuld concentrate on the Be Tae cea yt eet oer Phe conte yA an conn cnssin cae porcine erent ong a dea roping tects neal fo Otani ahr of eal mise B._ Consens at a pes an prorore have teen peed in operation. 1D. _Tdeatify the types of potenti! aisstatements that may occur. Aye most common statistical technique used with analytical procedure is ‘A. Regression andl i +B Adeeision rae table Comparison of eurent year dia D. _Dissogregated data 23. Te overtv of perteming aa rose ristence of onal trannctons and events, a“ Unustal waar went undetcted because of intra contol wepinesses C._Related pry wansations Related par acon hat were not propery authorized. || 76. The autor should design the writen al Progen th eeeccpe audit procedures selected will achieve specific audit sets locking for large peso of largk percentage changes. res in planning an audit engagement is to identify the 'B. Substantive tesis prior to the ‘balance sheet date will be minimif B._ Sublet al transection wil be scectd fr substantive tet D. niet ane oh bd oF Oo traneactions Yo. cost-benefit considerations are part of audit planning, In relavon © this, which of the following audit Early the LEAST cat 19 perfor? 1a. _ratytical procedures B. Testsofconvols C. Tests of balances. 5. Substantive est of transactions I. Tee aut program uly CANNOT be Baz’ ae Fr geraion ofthe ett’ intemal control Kas been completed Engdgement Se ete cision thant tio ble conditions bave Bee commanicated tthe asi commits. ise un hips among data Sn may reasonably be he of known conditions to the oak. procedures cart place en face and rasan. Sea = formation may lead to the discovery of material errors in They of anc rasan cet aati ote nena of unusual of audit planning is preplanning. Whi ing is pre-planning. Which of the following is NOT invelved uring the pre-planning phase? * ng information about client's legal obligations Seem . ig staff for the engagement sexo Oona ne er eee ‘continue an audit engagement SE, Which ofthe following aaner is LEAST ily wo be distance ‘engagement lctter? ‘Theft ht an ait dos a plan to detect materia iregularities The fast hat he finance! statements sre the responsibility of management C. Assistance to be provided by client personnel D. Timing of the performance of the examination ‘an auditor MOST | | (By conta ts mnereting gfx coining ces busines ening audi, { 7 4 | A. Reap jr pa year wonking papel andthe parmancst ile for the lent Bl Reap opeialfeadintustyjourals and balances i | Bbc of ets of ranentons D. —_Reekaluate elient’s intemal control environment ANPING ENTITY including INTERNAL CONTROLS RISKS! interval control calls for Score seresion ff pss in a ate ers ‘separation of the findtions of: ‘A. Authorization, recording, and custody. B. Authorization, execution, end payment ©. Custody, execution, and reporting. D. Authorization, payment, and recording “anion oc aon reeein re iin e ar Flown ena chck wih no prea ord A Dac reconciliations are not performed ona timely basis ounce eredit checks are wot performed. & oe Cato ata tras ies (acess wea x evi ae ee She amr roves reasonable ee nee regularities have been prevented or detected. Pros have not been riscumvented by. collusion. ‘agement cangot ovenide the System. rae el efficicncy has been achieved in accordance ety to test forthe internal contol that provi for cr to eet revenue and expense transactions by product line sicvof the purchase and salc of marketable secuntios, roarison of receiving reports and vendors invoices ‘with purchase orders. ing disbursements and reconciling the bank management plans. c SB. Sepregation of the funetions of record Epp wetrdesiqnd spn of interna ant st Je functioning effectively is MOST likely to detect an regularity arsing from: : ‘A. Tab taudalent action of an indivival employee. 4 Tap faudulene action of several employees B TNbmmal deviations from the eficial organization char. D. nt fraud. ‘would have uncovered (Gremio ig Cer ie Sans Ain the fraud. B, When the fraud uid wo result from collusion. I sear's francis! 5. When ied partes are Tikely 1972 ca the client's Tima Guditor to be inadeduats D, _ Whenine client's System, atime srl be ‘eran cong procetes Wien an ator ora56 Pan sis the ar Leis Fost likely inrense Oe A. Bateutoftests of details B._Levelof inherent risk Caen! ftese ofconzle D.__ Level of detection yu the Drie of te tattowing aut wchrianes would wovide an auditor with ie MOS assurance abo “effectiveness of the operation of an internal control proced A. Observation of client personnel B. Inquiry of eient personne! i C— Confrration with ouside pats. §; _Recompatation of account balance amounts. ‘ Ope snaior may compensa for 9 weakness rane ty conte structure By inetasing vA Exivat of analytical procedures B, Level of detection risk j C___ Extent of tests of controls D. Preliminary judgment about audit tisk. 1 Je. smmedialy upon ean of sh, a apes epics soul { "prepare a remittance listirg’) $ Cate the subsidiary accounts receivable records. Prepare a deposit slip in tripticate $ _Redord dhe amount the cash roeipts journal Yh To determine wher secouts payable we. mnie oe i aitor performs atest to verify that all merchandise ved i reverded. The popalation of Tor this tests consists ‘Ac Receiving repors. Bo Peyment vouchers. CC. Purchase requisitions D. __ Vendor's invoices. audton obec to communicate a propesed aut ajustment 0 an nts aut committee only ifthe adjustment: ‘A. Hata siynificanteffect onthe eniy’s financial reporting proses B._ Hias not been recorded before the'end of the ‘auditor's field work. Bea recuning matter that was proposed te managemen’ 1 the ptior year. SAIN Bom the comection of & prior pet's departure fom finaacial reporting standarés. PC white performing avdit, Mr. ABZ, CPA; decides to reset the risk of material misstatement to 3% a MI abi lve of detection risk Be if inhernt ik is 2574 aod control risk is 40% ae ee A 30% ~ re \t YT, . B. 03% Cc 12% ' D. 333% (Byron “of me folowing statsments BEST deserts why aw audio maxes a preliminary estimate of rwaterality? ‘a. Mvestimatete he auditor plan de appropri e¥thetes accumulate Bl Anestimate S vequired by general “accepted auditing standards CE. Theestimate provides Shasis for evaluating Tikely misstatements SB. Estimating materiality Berky helps the quétor 60 id legal liabillty JK which of the following veuld be [LEAST likely to be considered an ‘abjcctive of the internal control A ing management fraud I CeesTing te accuracy ad rlibility of accounting dats ca Safeguarding assets DB. Encouraging atberence fo managerial policies 7% When setting a ps rnd about materiality, sami aque for ow peso aroun than fOr 4g peso amouns. poP> low peso amount ess evidence is requived for @ is required for cither “The same amount of evidence i ‘There is no relationship dewworn it 1 ow oF hi itand the peso amount of evi ‘than for a high peso amount. igh peso amounts. lence needed, audit ris nga it perfaring cei nae procedures, rswsing ish ming cen aay proces. asin interen ik, sessing cnr Hk sing audi i asesing contol sk, atrmining det sk ” LEAST likely to be considered an objective of the interna control ures sing audit is, performing certain analytical procedures, assessing ineren isk ng certain analytical procedures, assessing inherent risk, assessing control risk 3g audit sing control risk, determining detection risk gis asst corres ‘oncemniny, U:c undozsianding of internal control needed by ‘The uditors nmst understard the control environment, the accounting system, and must ase jdyment as to vont procedures which must be considered B. The futtors must understand the congol envizonment but aot the accounting syst OF oot procedures. the accounting system, and not D. The fadito’s must understand the contol envirnment, the accounting system, and all procertures. Trwesn an entty’s objectives and the-cantrols it implements ta provide A an itor likely be concerned with intemal control policies and edures that provide Pa i a eat proce tp ca ec an asic nia a B. The efficiency cf management's decision-making process. Cc Serer ange ‘should chazge for its products. i D. 1ods of assigning production tasks w employees. | (BP ren comme ays be rear othe uf emai ida ap of company- produced infe tioh in designing and performing further ‘audit procedures (L¢., tests ‘of controls and } ‘substantive teste). | A Is over completeness and accuracy. | B over completenss and consistency. revibions. D. ey change in the regulatory or operating environinent. A. Which ofthe following saiemenss BEST describes conszoLenvionment? the follow ryder te governance and management functions andthe stiniies, PETE es eased with governance and management conceming the entity's itelnal conto! and is importance fo the nity. p. MaA yrs process for idntying business sks relevant 1 Fn reporting Say er tng about ection tadaress these risks, and dhe results thre iin et nfornation from wanssction processing systems {0 Oe financial reporting syst. iretives are carried out ‘porting and iis emphasis on meeting projected an entity's contr environment when: profit goals most lidely would significantly A agement is Jominated dal who is also a sharcholder. B. roliccsextalishes by partis outside the entity affect is secon practices. c mal PO fot is active to overseeing the ity’ nancial reporting Doves CPi cor awe dacctscees tue Board wf estos and ety management : ie system? (eyaish ofthe following statements desribes the processing function ofan accounting system? "A. Editing sod validation, calculating, measuring, valuing, summarizing, and reconciling B. The preparation of financial reports as well as other information, if clect one or printed formal that the enuty uses. in. measuring and reviewing the entiy’s performance : C. —[deatifying and capturing the relevant information for transactions pr events. D.__Allof te choles deserve the processing function. ‘Which of the following descriptions pertain fo physical cactcols? "A. Physical security of asses, including adequate safeguards suchas fecured facilities over acoras to sects aad record, B. Thc assipumentof incompatible functions te different people. C. Conwrol activities that include reviews and analyses of actual| performance versus budgets; forecasts, and prior period performance. D. Contras performed to deck sectracy, completeness, and authoriajtion of tansactions. 2K A process implemented by management to assess de cfectivencss of intemal confrot performance Over ome A. Monitexng of comtots BL Quality conta system C. Tests of controls D.__Risk agement procedures YG. Which of following would be preventive controls? ’A. Requirement that two persons opea mal B. Preparation of bank eeonclition, €. Those of tats tous D, Reconciling the accounts receivable sobsidiry fle with the conae ecount (GO Wat is an example of specific wanssetion auhoriestion? "A. Aporoval ofa constuction but for a new warehouse BL Seilapofaptomauis voter poss, ._Fatablichmeat of sales prices D._Extolishment ofa customer's ered Finis An entity's ongoing monitoring activities fen include "Reviewing the purchasing function 1B. Thewuditef the sonual nancial stents . Conat na acsessment in conjunction with quarterly reviews. D.__Peredic audits bythe audi conmitee a "When an organization has a strong internat control stricture, management can expect various benefits Which of tese bears ig LEAST Hkely to ceca? ‘A. lsnination ofemployee aud BL Availabliy of lable dis for decisionmaking purposes and photetion of important documents and records Sime ssmranes of compliance with SEC regulations D.__ Reduces cost of mextemal aude 39 Which of he following isan example ofan inherent limitation in. client's intemal control system? eae A. In nt performance of rnst contol procedures, tere are possibites of errors arising fom mistakes io jeden ] Procedures for binding ye sumbere of tranactons ae progessed by information technology (1) equipment. ¢. The etfesivencss of procedures depends on the segregation ofetployee duties. B. Procedures are éesigued to assure he execution and rove f Wansactions in accordance with masgeement’s authorization. 4. Which ofthe following pieces of evidenos Is LEAST tikely to be examined by te audio examines to “ctermine wastheroperatious are compliance withthe internal con sear Ar Coofismutions of accounts rcciable B! Cancelled supporting documents C. ‘Signatures or =shoneation forms D.__Records dovimeating usage of TT prosrams 36, Which ofthe folowing is ordinarily a test of internal Zonta procedures? "A. Exacaation of signers on checks BL Count ands cash on hand G._Seoding confirmation leters to ban . Obtain or prepa reconciliatoe sbtements of bank accouats af of the balance sheet ane | | | ri K or VES, a aera wees: ES, EVIDENCE & DOCUMENTATION (4) - ly related to financial reporting standards B. ide rela fo tauren ay Snes eae stndets on susitee @ A distinction mast Heed fo nancial repetng andards. Seoounrbalance Yr Tale betvees nea adit oijsnvs ad eps sar bers for cach A : ae ‘The gencral audit objectives are applicable to every account balance on the financial B. ca audit objectives are applicable to every account balance on the financial i general audit objectives are stated ia terms tailored to the cogagement. Dee ae eet ce ja terms tailored to the agreement be of the fol ‘Oj ud proper match of auditor’s objective with management's assertion? ‘A. Clafsification matches with presentation. BG ‘ship matches with rights ar.d obligations. C. Completeness matches with completeness. ® oe of the following statements Lest describes the auditor's responsibility with respect to illegal acts ‘that do not have a ‘effect on the client's financial statements? notify parties other than personnel ‘A. Generally, the auditor is under no obligation | ‘within the client's organization. | B. Generally, the audivor is under an obligation to see that stockholders are notified c mn the auditor is ebligated te disclose the relevant facts in the auditor’s report Ce i ct us compl ie chen to adhere to requrement fe | Pe ian Pcties et Anat evidence den ene dierent Teun wth differen degrees AST EAST perssive ppc of eden? nee Tce cct sls invoices 3 Vetiorvineice Beco shines fom te S Belk eer aae by be adi (@> robe compesen, xfoense muse both Sead leant BU dence Cc Tirpeiy and substantial. D. __ Refiable and documented. ‘used by auditors to evaluate reasonableness of accounting estimates? of persuasiveness. Which of the ‘corporate organizational structure, J of detection.risk increases, an auditor may change the: “A Timing of substantive tests trom year end to an interim date. Bl Nature of substantive tess from 3 less effective to a more effective procedure C__Assessed level of control tisk from below the maximum to the roaximum ievel §& —_AEGraoce provided by tests of contvols by using a larger sample size than pianned. fessertion for an asset, an auditor ordinarily works from the: ‘A. Adcounting records to tne supporting evidence. B. Supporting evidence to the accounting records. vancial statements to the potcutially unrecorded items. D. ly unrecorded iters to the financial statements. : fo. Tae primary sourec of information to be reported about litigation, claims, and asscssmenis = the: "A. Clieat’s management. B. Safependent auditor. c. jent’s lawyer. rt records. a i Oe Es ttn of workin poe Lear aT es : ‘seniors in reviewing and supervising Pepvide support for the auditor's report C.—Aldipariners in planning and conducting future audits, D. _Dpptmeats sttf compliance with standards on aditing, jent MOST keh De permanente seaon of te wing per at Ref 8h it client MOST ely . intemal contls. 'AL Namrtive deserptions of he client's seequming Proceaee SG A. Neate desert tr eg xan TOC Ee Be Comes se cngement by ach NNN EE gust work SA sche of ime pono gacons and comments FeEpSI OS . performed 34, Working papers int record the proeturs wed by the sues wl 1 evidence should be K._Designed to meet the circumstances ofthe particular engagement B. Destroyed when the audited eatity cease to be a client. 2 _Despeyed i eppont for the financial statements bes amin S Considered ti Prrmacting Tak between tbe books of account and te financial statements (Byresotcouots icons we eww done atthe same time a8 “Ar Sabtantve toss of transaccions B. Substantive tests of balances C. Compliance tests . D. Analytical procedures (The primary emphasis in most teas of details of balances is on the _ "A. Balance sheet wecounts. B._ Income statement accounts Cash flow statement accounts. D. Allof these Jy Managene aerns de hair's ue fr auiceitenes, Thee assefions are Sa aly related to generally socepted accouatiog principles. BS. Indiectly related vo gencraily accepted avditing standards O_ilecty related to generally accepted necounting principles, BL Directly related to generally accepted auditing standards Which of te following audit pccedures is used extensively throughout the aut but does not, by itself, provide sufficicot appropriate evidence? ‘A. inquiry BL Inspection of tangible assets. C.__ Inspection of records or documents D. Observation. JX. Complete the statoment: "The evidence gathering tecinique of obsvation — {A Ts limited to what the auditor sees” B._ Requires the gathering of corroborative evies C___ Is useful in most pats ofthe ait” DB. Israrety sufficient by self.” The fotlo lag ws descriptions of axerons about presentation and dsl, Which one refers t0 Boa ee comes? gre tat should have been included inthe Sinan sntemems Pave Been included. aru, ents, eansactions ander mater hav gecurredhnd peti. ig C. Financial information is appropriately presented ‘and described, and disclosures are clearly expressed. oat re er ifermaton a disclosed faily anda appiariags amc Pysiealenainaton of tangible assets iniiet form of vides pom the auditor wants 0 determine the____. ‘A. ~Owaership ofthe asset B. Condition or quality ofthe asset Existence ofthe usset 5. Quantity and scription of the asset. 4. Contiation is ine process of obaining » enesenain of information orlof an existing condition Cone ind pry. Traftonally confirmation are web 1 ¥e3KY ———— ae 8 ank balances and accounts receivable A Har gual rasections between organizations, suchas Sales txasactions C__Pbxed asset additions D. Ailorthe caoiees. @r sigas the confirmation request letter prior to ‘sending the same to the recigient? se The appropriate level of management B. The ausit partner. CC. The CEO/CFO of the client. Tequests may be used vinen A lalge number ofsnall balances i involved & Asapstatial numberof errs is expected. ~ Theodora reson Utne hat espondens wil direyanlagaive confimation x D, The fssessed levels of inh ; sed levels of inherent and contol risks are HIGH, ‘When the recpiat hfs scampished the confemation request replies shoul be 4" Senet tear ae B. _Senrety othe hn ser wich he cient gves the ele toe aor . Sentfdirecty tothe auditor, with another copy ofthe reply going tothe cle. ent back since a confirmation request dors wot necessitate repic AUDIT’ /POST-AUDIT RESPONSIBILITIPS (4) 2, eSATA AE ASTI ity of a misunderstanding couceming management's responsibility for the fal statements. B. The scope of an auditor's procedures conceming related party tansactions and subsqquent event ©. Audit isk to on aggregate level of misstatement that could be considered materi. D. Abvapditer’s responsibilty to detect material misstatements only to the exteot thatthe cris relied on. Prior to the audit report ease dat, andor nave a responsibly to-mamegsmen's dissosue of subseqpeat events uatit -_ ‘A. The audivrepon release date B. The Jearend balance sheet date Segue sepo te The folowing year's Balan. sheet date. ‘efbich of the following normally ovcurs GarliesL3A the audit examination? ‘A. Revigw of audit documentation B. ‘of an omitted audit procedure. ©. Dual dating the auditor's report on the cuity’s events that exit atthe bance sheet date. ration of the raanagement letter. fg substantive provedures should auditors ordinarily perform regarding subsequent financial statements for subsequent the Glient’s customers Who fale to respond to intial accounts B. roquests nation request. c. son con material weaknesses in internal contol to the client's audit committee he cut-off bank statements for several months after the year-end, 5, AK The scope an tion rere eno aoe ein epee % NOT rented when an ory easntveaenon in We Tor OF Ie tation, B. earn ofthe likelihood of a unfavorable outcome of the marters disclosed PY ic y's opiaion of the entity's historical experience in event snilrIigaon- Sacto ame of apr clims and pending or heated igaon |X Wh te apc PORE fe nee a ven ena ih pete natal proces, B. c. 7 : D. Obtain an understanding of iuternal contro ‘An andor Aesisied concerning whether oF uot to “DUAL, DATE” the audit report based upon the auditor’ willingness fo ‘auditing procedures. B. Accept responsibility for subsequent events, C. Permit inclusion of a note captioned: event (unaudited) subsefusnt to the date of the auditor's report © D.__ Assume responsiblity for events subscquent tothe issuance of the auditor's report. ‘An auditor issved an audit report that was dual dated for a subsequent ‘completion of field ‘work but before issuance of the auditor’s report. The aufitor’s responsibility for events occuring subsoquent tothe completion of ficld work was ‘A. Limited tothe specific event referenced BB Cnmited to include only evens occurring before the date of te last subsequent event Extended to subsequent events occurring through the date of issuance of the report. Oem ma Extended to include all events occuring since the completion of fils work A as performed mest of the audit of Censolidated Company's financial statements and hale a the princigal auditor. CPA Frm B di the remainder ofthe work, Fir A wishes to asume ‘esponsibility Tor Frm B's work. Which the following statement is CORRECT? in such ciroumstances, when appropriate requirements have béen roet, Firm A should wp, Rite, Astandard unqualified pion 0 the tna satement| 3 such ekeomsamoe, when appropate require tv bln mi, Fin should issue ar unqualified opinion on th financial statements but should make eppropriat reference tothe Fim Bin te audt pore . ia C. Such assuroption of responsibilty violates the profession's stanpards. D. CPA Firm A should normally qualify its audit reper on the bass ofthe scope limitation z involved wher. another CPA firm is involved. | XE Which of se following is most accurute with respect to a C? concern question on audits? ‘A. Based on audit procedures performed, assess whether there is| substantial doubt about the entity's ability to continge as a going coneem. "s responsibility in considering a going | B. Determine that related uncertainties se properly disclosed and|make no mention in the audit report | C. Perform analytical procedures aimed pawticularly at assessing whether berkruptey is probable. if fal ne D. Issue a report with a “going consem” modification when fale is atleast reasonably probable JA letter of audit inquiry shall be prenared by ()__~_, sent hy I) __| and addressed to IN) A. G) client ( auditor (TD counse? B. G1) avditor (i) client (ID) counsel CC. counsel (ff) auditor (I) client D. (client 1) counsel (I auditor ‘The auditor shall consider the status of lega! matters up zo "A. Date of audit report B. Date of issuance of the financial statements | C.__Date of audit report or date uf issuance of financial statements, Whichever is earlier D._ Date of audit report or date of isunce of financial statements, whichever slater Yy- Regarding litigation, the audier’s primary means of obtaining ion of mauagement’s information is Teter of audit inquiry to the client's lawyer. Letter of corroboration from the avditor’s lawyer review of the legal documentation. é - Confirmation of claims and assessments from the other parties fo the litigation. 1D. Confirmation of claims and assessments from an officer of the} court presiding over the P BP Weston wee conde eee ine of management's writen represrtatins as ait evidence sbott the Completeness assertion, an auditor should understand tht such ropreseatations “ECeamplement, but do not replace, substantive test designed to st B. Constitute suicient evidence to support the assertion when ‘with reliance ot internal accounting contls. ‘tc lesan C.__Ars not parts of the evidential matter considered to support the psscr $B RPeiace on internal accounting contol 8 evidence topper the assertion ve of analytical procedures used inthe final feviewv of an wut i to_ cssist the audi in assessing the validity of the conclusions reached. B. Gbuain evidcoce from details tested to comonorate particular axfrtions entfy arcas that represeat specific risks velevant tothe a : oy res ht er Pe a's iy cio in xen ort the assertion. fered in combination ere Ba lawyer re Fuses PR GSI Rites Famish concboratng information regarding ts “out ng gan, $ Govsier hereto he tatnount is ° 1 a scope imitation, Cea ete oe cen oer eon. eke obtain the rating information from managemer ' YW da asoney rx ight etn theses te neal secoe : Timit the regpesret RE ' an itor asa rest ofthe elias Teter of audit inquiry bay apyropriately AL Matis To Wi i> wilicn the wtomey has given subsaniive ateation io the form 2 2 lation oc represeatuion’ on fe ee ee a ms, which have high probabili f s Bt probability of being resolved tothe clients detrimeat. 5, ASsetled claims and pending oe threatened litigation, . Legal maters subject to unsealed points of nw, uocorborted infomation, or other __,__ complex judgments, ¥ ‘The audit inquiry teu to te clonts legal counsel sbould be mailed only by the ‘A. Audijor after preparation by the client and review by he auditor B. liegt after tie auditor has reviewes it for appropriate content, C Avail after preparation by the client and review by the auditor. D._Cliea after review by the auditor's attorney. . Shortly after the a already beon released to the entity, an auditor discovered that ‘material subsequent ing adjustment of the financial statements, Accordingly, the auditor claitns, and assessments, ‘A. Notity the persons ultimately responsible for the overall direction of the entity not to Issue ancl baterents ond the aut report thereon ted putes. B. lbsuea modified report au comigendu, togeicr witha writsa apology addressed to ‘acdpeet af eres arclacs fc si ©. ula modified report a coriyendom, but wibout writen apology D. _ Insula stemene in sewapeper of gencraleuvulavon asking the public at age not to telydn he financial statements and the audit report thereon {te approprat ate For the client to speci asthe efective dat nthe aud "hr Te frpcte date eft complain of wvd eld work Bl The falnos shout date G._Seveh ekg days ater he raves rceived by te lawyer 3. _ The faot the ait inquiry tall ater CPA'S badt report wat intued, toe CPA leaned of eran cated pany transactions that aecrnang using Wl year aver audi These tansacions wore NOT diclow inthe noes 10 Ue faocia tment |e CPA should ae cfmine wheter te lck of velosure woud aff the autor’ epot. G.PeSfo soos unosoctons dingo net ungagsents. Rec alleopiesof te ated franca statement TR ek io ahcoue ths wancactnns In suteccnt interim salcment ey ecliie a ees ecooulive wife and xe ci financial oTRcer 3 grechont and te eharperen ofthe Doon. é ed te tteral auditor §, SoaghiseCeunact andthe audit commites chairperson ® ‘Management reproseptation letters should be dated as of the Jute of the: areal separ B_ Balapce shect c interim financial statements D. _Lauep related party transaction. ‘Management represeptation letters _ eee me *a iliy_of mivundertanding, ot misitepreuion conceming aetteemmats eons Torte financial sateen Ha isk to an aggregate level of misstatement that could uiry to a lawyer is B, Rede iahcrent risk and eoatzel ri be ebnsidered material. C.Tnergase an auditor's responsibilty to dewet material mi that fe letter is relied on. : i D. Clarifies the scope of a professional accountant’s procedures conecraing the going ‘coadern assumption ard events after balance sheet date. “The auditor should opiain evidence of management's acknowledgment of responsibility for: The fair prescutation of the financial statements in accordance with GAAP in the Philippines Th. Approval of the financial statements statements only to the extent A. Both Tand It B. Tonly ‘| C. Moaly S D._ Neither {nor 1 Fe, Which of follwing ts NOT required by the Philipine Standards on Auditing? A. Management letter , B. . Attomey leter C. ¢ Management representation D. \ Enpagemens liter . 27) Prior to the audit report release date, auditors have a responsibility t0 1 ‘subsequent events uatil ‘| | ~ £ Berane } a REPORTS on AUDITED FINANCIAL STACEMENTS (4) ‘Under which ofthe following conditions can z disclaimer of opiaicn never be ‘A. The auditors have determined thatthe ent uses the NIFO ( costing method. B. Going-couccrn problemas are highly materia and significant. Ee CC. The entity does not allow the suitors to have access to ev accounts, D. _The auditors ovm stock inthe tity Ta the report of the. group engageinent team, reference fo the fact that a portion ‘a component auditors ae "A. Not to be constracd asa qualification, but rather as a division o the two CPA firms. B. Not in uevordance with Philippine Standards on Auditing (PSAs). C. A qualification that lessens the collective responsibility of both ‘An example of «dual opinion requiring the signatures ofboth ators y 5 (CZ owsny Xie sR ebay to mie Sn ata of Coma EBB pate woos tector A. CompanyX ~ 2B Gmmyy & Ata D pen rien eo at sina int te soe of be mit impos SO senly ewe war pee opm 7a B. Qualified Unqualified. D. _ Adverse. ‘An adverse opinion is issued when the auditor believes that = "A. The overall financial statements are so materially misstated oF that they do not present fairly the financial position or result flows in conformity with PERS. B. Some parts of the financial statements arc matorially misstated, C._ The fikarcial statements will be foard to be misleading or m investigation is performed. D. The audit fra is not independent. 'A disclaimer is issued whenever the auditor "A. Has been unable to satisfy bit fairly. R. Believes that the overal C. Believes that some mat D. _ hes determined that the . (7) primary concem ia measur ‘materiality when a clicnt one rts erin the sects involved, compared wih BL Mcasurability of the peso error The nature of the item in error. D_ Whether it sesame ne tt fray rh mal ern “1 ‘A. The audit was conducted in ‘accordance with financial reporting 1 financial statements are not presented ff financial statements arc presented fairly. tral part(s) ofthe financial statements ant yement's disclosure of ped? in, first out) inventory {dence about important 1s made by the audit responsibility between CPA firms. ‘and deliver the report the client, the auditor misleading as a whole lof operations and cash ‘or misleading. stated, if an adequate jatements are presented rly. rot presented fairly wef otee Pr isasnty pre base. ‘easonable basis for vail am cresting rnc sed 1d SESE supptengs CPONSIIIY oF the 6 mone ald iste ga PME emai “ "ormatinn required hy the Commission on Audit inion Witt an additional opinion, # ion explanatory paragraph, cetin ‘ith an explanatory paragraph je CPA’, JRO ON & review ofthe ims finan ent se Neri financial statenents of 8 publicly-held y. rence to another accountant, lly are addressed to, f Nwriters of securities, & Seepitor financial institutions Bh Theelicnt's audit commitce The Seeurtcs and Exchange Comision, X The term “Financial Statements” fy see contain ent iene iy found in which sections of « typical audit report that A Tembdctory paragraps, management's responsibilty, audios responsi and 3 itn Qdition, managements responsibilty and auditr’s responsibility 5, Mafagemen’s espraiiity and actor's responsi utrpductory paragraph and management's responsibil Dx me auators report oe ena i india A Thaf itis the report ofan independent auditor, When the audit was completed fpame ofthe clicot ite ge Tis period covered by the Financial stents. J, The auditor's reports normally addres tote A. Tagse charged with governance nn shareholders. B. These charged with govemance andthe chair ofthe audit committe &_Tegse charged with govemance, shareholders, andthe chair of th audit commie. D._ Shareholders and ths char of he midtconsion DE ‘tne expression“ nocalsticnens ckense se ‘A Eniplly to a complet: sc of Rance sical Sid to an individual feanil epee B. Only tom complete st cf Fanci statements c ‘cach financial statement. 5 eebestmcermrnataae eee ee « ‘material respects the financial position, results of operations, and cash flows in conformity with GAAP” A.A qualified opiaion B. Anhinqualified opinion C.Anbéverse opinion D. A disclaimer of opinion : : Ax The phrase “Accordingly, we do not express an opinion un the financial statements...” indicates: ‘A.A disclaimer of opinion B. Anhinqualified opinion C.Ankverse opinion ). A qualified opinion # reporting eS Ce ee ee See | — + repentng responsibilities B. Batis for modification | Ce jion paragraph D. Other matters paragraph | (BE The auditor's signature is: ‘A. Anyof the choices is allowed by PSA 70¢ ((tedrafted) B. c D. Both in the name of the firm and the personal name of the aditer. ‘suditer's report should be dated no earlier than the date: A B. c D. . A Teter of aut inquiry is receiv ents attomey of Fecord. WC The auditor's wrod athe audaorsrepers The seis nope ‘A B c D. the address of the majority shareholder of the audit client. 36 If supplement 1 the name of the audit firm, In th: persimal name of the auditor. Toe auditor has obtained sufficient, appropriate audit evidency on which to base the opinion. The repor is é-vered tothe entity audited. OF the balance shee forthe lates period reported on. #ddrcss is also presented ia the auditor's epert. The adsress is 2h location in the jurisdiction where the auditor prgctices. ‘the principal place of business 2f tir audit elie the exact location where the auditor's report was signed. ly: tary information that is not required by the applicable financial feporting framework is resented withthe audited financial statements, the auditor shall ‘A. evaluate whether such supplementary information is clearly fifferentited from the audited financial statements, 1B. Withdraw from the engagement. [sve a qualified opinion due co disagreement with management] #8 adverse opinion due tw departure from the applicable financial reporting, Bat (Baa wesior SB ctermine the wmous associated with ieyl ets comfted by a elon, The a aio is ies ts comfited by ain. Th A B c D auditor may noi express a qualified 09) - A B. c. D. 26 An auditor who concludes that a material (hut not pervasive) uncertainty is not! the financial A B. c D. re likely issue: Either # qualified opinion or a disclaimer of opinion. ‘An adverse opinion. Either a qualified opinion or an adverse opinion. A disclaimer of opinion, | when ‘The auditor lacks independence with respect ta the audited entity. Civeumstances prevent th: autor frora completing an important ‘The auditor's report refers io the work of a specialist. An {ocounting Principles at variance with gencraily accepted Accounting principles is audit procedure. dcquately disclosed in statements should issue a(n): ‘A qualified opinion ‘An unqualified opinion ‘An adverse opiaion j A disclaimer of opinion wn auditor has coucluded that fraud or error has a material effect on the finbneial statements, The ‘reud/error has not been corrected an reflected in the financial statemeds In this. case, the pervasiveness of the effect of fraud and srror will determine the opinion, ingly, the auditor should issue a(n): ‘A. Qualified or adverse opinion. B. Unqualified cpinion with emphasis of matter. C. Adverse or di D. Qualified or disclaimer of opinion JB. An entity o information that should be incluced inthe group financial statements. Dusiness activity for which group or componcat management prepares financial at cata B. Responsibility Center - Sabie Di Act group fi 2. An auditor who, atthe request ofthe grcup engagement team, performs work da financial iformation ‘Suthlwoacomponcn forte pvp aie 1 Component air Bi Siccewer aur CSyeciaatorespert D. Auxiliary auditor . : pec oe OA a em who is reponse forte poup anc egpgenes sd C2 ge essen te fom en os Sadat aes Sm : A. Group engagement pactner B, Lead c. estes Dyin iog parte "ced int eaBABCMeNt parte a sment {esung aed the services of an ‘unmodified enigessoF 2 &XPert during the audit of a clients finanek AOE lr rpm bates 8 CN nel semen Wen B. Mention the expe geet 3 this might Mention tie ont 43 this might mislead Gaancial statement ws SNe feaion te eed JUS the use of the experts services. eon a onset te pain and instead aloe te expert in the notes . ‘the auditor's report and the notes to the financial statements A LUDITING in 2 CIS >A database managemdt AUDITING in 2 Cis ENVIRONMENT (4) A. Physically stores each clement of ; meni of data only once B.Allows quik eieva fda buat cost of inet use of fe pe Alls quick renival of dats tit need oupate ies continu. ._Stords data on different fies for different purposes, but always koows where they are and Dw to retrieve them, z i ees Comparing the conti cavironment in complex versus noa-complex Computerized Information System as) Pr vO w> & Auditors usually eval Mort critical because of the bigh degree Less Less ), the control eavironment in complex CIS system is: ‘critical because there is greater potential for errors and irregularities ‘of technical competence needed by the 2:2 operators, ritical because the complexity casures that controls wi ‘critical because non-experts de not have the opportuni and mess it up, te the effectiveness of M1 be built into the system. ity to interact with the = oe ‘controls before applications control. ms GB Hedencectiets Sex Breanne ee nd et dt oc fee meer ers C. Are mutually exclusive. Suet intemal control is INEFFECTIVE when computer department personne: ‘A. Originave charges in masier Fies. B. Provide physical securiey for program files C.__ Partigipate in computer software acquisition decisions. D. Design documentation for computesized systems. ela Computerized infpation System, suomi ennipmenteangols oF hardware controls are designed to | A. Delaptand control errors arising From use of equipment. Bi Arrange data in a logical sequential rnanner tor processing purposes: C._Comtot errors in the computer programs. DD. Monktor and detect errors in source documents “The real-ting feature bf a Computerized Information System would be LEAST useful when applied to ‘sccolnting for a firm's ‘A. Propprty and Depreciation B. Custbmer account receivable. c. B. _Bank-accourt balances. @Computer systems ‘are|typically supported by 9 variety of utility software packages that are important to ‘an atditor because they ___ seaman |. Maylenable unauthorized changes @ data files if not properly controlled 3 Aretery versatile programs that can be used on hardware of many manufacturers, CC. Maylbe significant components of a client's application programs D. Are Written specifically to eneble auditors to extract and sort data. a auditor would LEAST likely use computer software to: c. Prey D. Construct parallel simulations. IS contol risk. eqas client data files. spreadsheuts. | | 2, Which of the foitowing is a computer test made to ascestal group? ‘A. Validity cheek, Bl Ueho chee Limit check D.__ Parity check. c processing funct icteristic belongs to the in whether a given char} sions such as sorting Auditors often make use of computer programs thet perform rout vslable be cleqzonie dara processing ‘od merging These propane Me made cSt ety corto sity prams = OF URee - Seen : sper peas a) oh ting sper ating ts Soe ear egsber wiht cleat opeaing pore) process? eee ee a. Fred west ty. ST pron € Ponisi, Cenacle nod sateareprogsmmg yet cokes eee i ong hd ray ea ae diy eb? A SUITS Mepeich ce ney 3 Tita apbrersh and parte sutton &Peuitsmaee nd cpa thy : ft aaa ees ari sonlaion nd gated ttf [76 Wien ofthe flowing stents & NOT ow of te et dat sprue whe accounting system? A. Thctest data must consist ofa possible valid an invalid conditions Bl The test data needs to consist of only chose valid and invalid auditor. C. Only one transaction of each type needs to be tested Beat data are processed by the client's compe softer under AD) is a state implying data has certain atibutes: completeness, soundaes, purty "AL Data integrity B. Data verification. C_ Data sateen D. Data integration. Y% what are controls that are design complete, and accurate? A “Tnput controls | BL Processing controls Output controls ed to assure that the information processed by D. General controls of atatch processed computer sjstem? (Prue ore alga NOT g rane NO an cca 20 Be A printouts. é p,_The collection of lke transactions that are sorted and master file. followed ty machine processing. co eaphncing of tansaction. Serra of numerous Da main cts res a ah ame A ee doy ; fn oc a ony fora 2m rote arse ice oom than in ah im may NO B. Transaction tails C___ Errors in some transactions cau B. Randor errors are morc likely ities would most likely 9 Which 1¢ following activi D)rrnicn oF me Foe anormavien tomachinerenabls FM cael BB, Correction of transuctional 0's fing. application. 1nd real transactions to ‘aware of the testing ter-Assisted Audit Techniques (CAATS) testing a computerized ditions that interest the auditor's control [and veracity the computer is valid, “without intermediate {a sequentially against a 1 be detected immediately because ing transactions ina batch syst period of time in the batch. ine system. performed inthe TT department? Be Tetation of changes o existing a ion ree oman acing em aml resi? Which of tne following charact tro toe FOr nator processing, virtually, chim cerntatly associated with manual processing Sear ularities NSS In computer proceasin 1B will tilt 5 Ystematic em Proves oF is ordinarily greater i sing ly wroter in manual processing than in computer syst EpUtE Systems are des exist, ‘We designed so tat wansaction tails wscul for audit purposes ote bbe detecicd soon after their teri Geant oten associated with computer systems? 8 ti oa ily be scparawed in a manual syster bined compuser B Fer system, Computer: ‘equipineat is more sul Bn ene Ibject to systeras error than manual processing is subject D. Combet Satipment processes and records similar transactions in sitnilar menner. 1 procedures for detect sou of tne unpre fo detection of invalid und unusual trasaton are less festive microcompures cane Satements MOST ‘ikely represents disadvantage for sn ent ce ter propped data fles rater than matuelly propel fies? ec BH poually easier for unauthozed persons to ansess and arte fs Random enor asocaed wih pecesing similar ansictons i different ways is C. It is usually moze difficult to compare recorded account ability with physical count of Y a ofthe programming process rather than errors in Preventing someone ith sufficicne technical skill from eireumventing ‘changes to produstiog progrems is BEST accomplished oy ‘A. Providing suitable scyrcation of dics B. Reviewing reports ofjobs completed C._Comsparing production programs with independently consolled copies. ___D._Runing test data periodically. ‘Which of the following employees in a company’s compute designing new or imjroved data processing procedures? 1g security procedures and making 1 department should be responsible for gis at coasters of Se ool pom ee Cc. The itor, See ae pbc aout Dronien ot be spe Ee tout cons wold ish of ee Be oramajer eat ch aman So er enon 3 Se arden oes MOST likely assist an entity whose system D. _ Cheak digit verification. KB Which of the followin is the auditor's concer regarding a distributed data process!98 set-up? A controis. B. rare controls. c. fms docuinentation controls D. izational controls a low level in a computerized environment, Under these (GB An auditor anticipate assessing -ontrol risk at , Ap umstances, on wich ofthe Tolowing procedures would he aor iitiy focus? "A." Gengral contrat procedures Bl Prog ‘control procedures. C.__ Application contro! procedures D. Output control procedures. PX Which of the followin fs a computer test made to ascertain whether a gi group? i ‘A. Valigity ebeck. B. Parity check C. Eehd chock. D. Limif check. iven characteristic belongs to a 226. Totals of arsounts in computer-recordea dota fields, data processing control purposes are calicd__ ‘A. Hash totals BL Recon totals ©. Haas-Larzen Totals D. Field totals OTHER ASSURANCE & NON-ASSURANCE SERVICES (4) IK Aroview service raaiaemeat involving awaited furl semen ‘involves: A Less werk thon an, audit but more work than a compilation. Bl Less work than ¥-

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