Mini Quiz! Ready?? Set?? GOOOOO!!!!
1) Which of the following items should be included in an auditor's report for financial statements prepared in conformity with a special-purpose framework?
A. A sentence stating that the auditor is responsible for the financial statements
B. A title that includes the word “independent”
C. The signature of the company controller
D. A paragraph stating that the audit was conducted in accordance with a special-purpose framework
2) Analytical procedures used in planning an audit should focus on:
A. evaluating the adequacy of evidence gathered concerning unusual balances.
B. testing individual account balances that depend on accounting estimates.
C. enhancing the auditor's understanding of the client's business.
D. identifying material weaknesses in internal control.
3) An auditor desired to test credit approval on 10,000 sales invoices processed during the year. The auditor designed a statistical sample that would provide a 1% risk of assessing control risk too low (99% confidence) that not more than 7% of the sales invoices lacked approval. The auditor estimated from previous experience that about 2.5% of the sales invoices lacked approval. A sample of 200 invoices was examined and 7 of them were lacking approval. The auditor then determined the achieved upper precision limit to be 8%.
The allowance for sampling risk was:
A. 5.5%.
B. 4.5%.
C. 3.5%.
D. 1%.
4) Which of the following types of audit evidence generally is the most appropriate?
A. Inquiries made of management
B. Confirmation of account information
C. Analytical procedures
D. Review of prior-year audit procedures
5) Which of the following is not an example of an accounting estimate that might be included in financial statements?
A. Allowance for loan losses
B. Accounts receivable
C. Annual effective tax rate in interim reporting
D. Percent of completion under contract accounting
6) Application controls pertain to:
A. processing of individual applications in an IT environment.
B. processing of all applications in an IT environment.
C. data processing with an IT environment.
D. the way in which controls are applied in an IT environment.
.