Which of the following would least likely be included in an auditors tests of controls. Are all financial reporting The following tests of controls and substantive tests of transactions audit procedures for acquisitions and cash disbursements are to be used in the audit of Ward Publishing Company. c. extend the audit conclusions r eached at the interim date. Approval of the purchase and sale of marketable securities. examination of materials Study with Quizlet and memorize flashcards containing terms like Which of the following procedures would least likely result in the discovery of possible illegal acts? A. Study with Quizlet and memorize flashcards containing terms like 11) Which of the following procedures would an entity most likely include in its disaster recovery plan? A) Convert all data from external formats to an internal company format. the relative costs of each type of test. Which of the following would least likely be included in an auditor's tests of controls? A. Under this scenario, the auditor would most likely take which of the following actions? a. For this purpose, inquiry combined with inspection, a. Which of the following factors would least likely affect the extent of the auditor's consideration of the client's internal controls? a. C) Develop an auxiliary power supply to provide uninterrupted If auditors conduct substantive procedures as of 10/31 for an entity with a 12/31 year-end: Multiple Choice additional tests are seldom conducted for the remaining period. Consequently, the auditor should do one or more of the following : 1) change the nature of substantive tests from a less effective to a more effective procedure, 2) change the timing of the substantive tests, such as performing Study with Quizlet and memorize flashcards containing terms like Assessing control risk at below the maximum level most likely would involve a. During the initial fieldwork phase the auditor's test of the client's controls indicate that certain controls are NOT operating effectively. D) Confirmation. The potential for fraud seems high. , A primary Which of the following tests of control most likely would help assure an auditor that goods shipped are properly billed? Checking that the client has: Select one: A. Generalized audit software is primarily used as a tool for performing substantive tests; the software is of limited value in tests of controls. Valuation. Certain general CIS controls that are particularly important to on-line processing least likely include a. See paragraph . B) Reperformance of a control. b c They have reduced the need for the auditor to study input controls for computer related procedures. A20) receivable,except when one or more of the following is applicable:(Ref:par. risk assessment procedures 2. System development and maintenance Study with Quizlet and memorize flashcards containing terms like statements are fairly stated. Internal control questionnaire. Identifying specific internal control structure policies and procedures relevant to specific assertions. Study Resources. An auditor's tests of controls over Study with Quizlet and memorize flashcards containing terms like A deficiency that implies that there is a reasonable possibility of misstatement in the financial statements that is significant but not material is A significant deficiency. Possible lack of visible transaction trail. The auditor’s communications of matters include all audit matters of governance interest. (Ref:par. Determine the existence of inventories and the occurrence of Which of the following is least likely to be considered a risk assessment procedure in a financial statement audit? Which of the following is most likely to be included in an auditor's inquiry of management while obtaining information to identify the risk of material misstatement due to fraud? Tests of controls are most likely in which Study with Quizlet and memorize flashcards containing terms like , A service auditor's report on a service center should include a(n), Which of the following is an advantage of describing internal control through the use of a standardized questionnaire? and more. Review of the client's internal control. Apply gross Correct:(B)t. Periodic comparison of removal work orders to Study with Quizlet and memorize flashcards containing terms like Which of the following would be LEAST likely to be considered an objective of internal control?, An entity's ongoing monitoring activities often include, A primary objective of procedures performed to obtain an understanding of internal control is to provide the auditors with and more. AI Homework Help Log in Join. Assertions used by the auditor fall into the following categories: I. Total views 100+ University of Engineering Study with Quizlet and memorize flashcards containing terms like Which of the following matters most likely would be included in a management representation letter for an integrated audit? 1. A detailed evaluation of the riskiest areas of the audit. No. Thus, the auditor should evaluate their design and determine whether they have been implemented. Which of the following is a risk factor for misappropriation of assets? a) Generous performance-based b. evaluate management. Under these circumstances, the auditors would most likely: - Reduce substantive procedures in areas where the internal control was found to be effective. , 9-5: Explain briefly the term systematic selection as used in auditing and indicate the precautions to be taken if a random sample is to be obtained. Assessing the adequacy of the available evidence. Test the computation of standard overhead rates. work performed by internal auditors who report to the audit committee of the board of directors b. Confirmation D. Verification. Pages 27. Total views 100+ Rensselaer Polytechnic Institute. BUSINESS. Study with Quizlet and memorize flashcards containing terms like 1. An insignificant deficiency. Accounting records least likely include a. Personal inquiry and confirmation. Separation of duties between those authorized to dispose of equipment and those authorized to approve removal work orders. a)Which of the following controls will most likely justify a reduced assessed level of control risk for the existence assertion for equipment, b) Equipment acquisitions that are misclassified as maintenance expense most likely would be detected by an internal control that provides Which of the following is least likely to be evidence of operating effectiveness of controls? Confirmations of accounts receivable. Study with Quizlet and memorize flashcards containing terms like Section 404 of the Sarbanes-Oxley Act of 2002 includes internal control reporting requirements for both management and auditors. Increase the extent of tests of controls for the inventory cycle. Analysis of balance sheet accounts. Which of the following is least likely to be included in the auditor's engagement letter? 1) Details about the preliminary audit strategy 2) Overview of the objectives of the engagement 3) Statement that management is responsible for the financial statements 4) Description of the level of assurance obtained when conducting the audit Analytical procedures would least likely be included in an auditor's tests of controls. auditors may fail Study with Quizlet and memorize flashcards containing terms like 1. Providing assurance that potential material misstatements will be identified. What are B&M's responsibilities with regard to contacting 3W's predecessor auditors?, An Which of the following is least likely to be considered by the auditors considering engagement of an information technology specialist on an audit? a) Number of financial institutions at which the client has accounts. substantive analytical procedures C. Which of the following is least likely to be considered an appropriate response relating to risks the auditors identify at the financial statement level? A. additional After obtaining an understanding of internal controls and assessing control risk of an entity, an auditor decided not to perform tests of controls for purposes of the audit. An increase in the assessed level of control risk is justified for certain financial statement assertions. ) Issue a modified audit report. Study with Quizlet and memorize flashcards containing terms like If auditors conduct substantive procedures as of 10/31 for an entity with a 12/31 year-end, incidental of the auditor's objective of forming an opinion as to the fair presentation of the financial statements, For certain controls, such as segregation of duties, documentary evidence Decrease the extent of tests of controls. , Which of the following procedures would least likely be included to test management's assertion of valuation, allocation, and accuracy? A. A schedule of individual audit team member billing rates, Which portion of an audit is least likely to be completed before the balance sheet date? A. Total views 100+ Nyack College. The provided text seems to contain several scenarios regarding internal controls at a bank. The entity's control components are interrelated. Significant weaknesses were found in the company's internal control. Reconciliation. The auditor hopes to reduce the amount of work to be For which of the following internal controls would an auditor be least likely to perform tests of internal controls closer to the "as of" date? A. C) Inquiry. Obtaining the user organization's representation regarding the effectiveness of the service organization's controls. List of audit objectives. Which of the following procedures would an entity most likely include in its disaster recovery plan? A. Substantive procedures. ACCT 3110 Which of the following is least likely to be considered by the auditors considering engagement of an information technology specialist on an audit? a) complexity of the client's systems and IT controls b) number of financial institutions at which the client has accounts c) client's use of emerging technologies d) extent of the clients Which of the following would least likely be included in an auditor's tests of controls? - Inspection. Review subsequent events occurring after completion of audit for evidence regarding FV measurements as of B/S date 2. - Inquiry. , Which of the following factors is an auditor least likely to consider when reporting on compliance with aspects of contractual agreement in connection with audited financial statements in accordance with Statements on Auditing Standards? These procedures will include tests of controls if: A. unmodified opinion, Management makes FS assertions related to: (Select all that apply) a. True. Maintain a program to prevent illegal activity. The auditor most likely decided that: A. Once a Q The auditors use analytical procedures during the course of an audit. The Which of the following tests of control most likely would help assure an auditor that goods shipped are properly billed? Checking that the client has: Select one: A. obtain more persuasive audit evidence the higher the auditor's assessmentofrisk. Is systematic selection applicable to unnumbered If auditors conduct substantive procedures as of 10/31 for an entity with a 12/31 year-end: Multiple Choice additional tests are seldom conducted for the remaining period. , 2. Documentation. . Encouraging adherence to managerial policies. D) Recalculating balances in inventory reports. For each of the following characteristics indicate the auditors' responsibility under generally accepted auditing standards and the procedures used to meet that responsibility. The auditor most likely decided that: Multiple Choice it would be efficient to perform tests of controls that would result in a reduction in planned substantive tests. , An auditor may Study with Quizlet and memorize flashcards containing terms like Which of the following procedures is most likely to prevent the improper disposition of equipment? A. Unlock. report flag outlined. Analytical procedures are less likely to be included in an auditor's tests of controls as they are used to ACCTG 344 LO 5-6. ) An auditor performs a test to determine whether all merchandise for which the client was billed was received. False. Which of the following tests would best assess the validity of the auditor's concern?, If a After obtaining an initial understanding of a client’s IT controls, an auditor may decide not to perform tests of controls related to the control procedures within the IT section of the client’s internal control. Confirmation VIDEO ANSWER: An audit client did not keep copies of its procedure manual. Control and distribution of unclaimed checks. Develop an independent fair value estimate 4. To obtain sufficient evidence to support the auditor's opinion on internal control over financial reporting as of year-end, and To obtain sufficient evidence to To obtain sufficient evidence to support the auditor's opinion on internal control over financial reporting as of year-end, and To obtain sufficient evidence to support the Which of the following is least likely to be included in an auditor's inquiry of management while obtaining information to identify the risks of material misstatement due to fraud? Inspection. When dec View the full answer Answer. Which of the following procedures most likely would be included as part of an auditor's tests of controls? A. Test of details and substantive analytical The auditor performs a preliminary risk assessment for a new client. Acknowledgment that management relied on the auditor's procedures as the basis for Study with Quizlet and memorize flashcards containing terms like Audit risk is the risk that FS will contain a material departure from GAAP and the auditor will issue: a. Tests of controls are least likely to include: A) Inquiries of appropriate client vendors. An auditor should perform tests of controls on significant control deficiencies before communicating them to the client. The independent auditors' objective is to express an opinion on the client's financial statements. The expected deviation rate from the control. Study with Quizlet and memorize flashcards containing terms like The major reason auditors gather evidence is to: form an opinion on the financial statements. Zero. The need of the auditor to make analytical procedures during the completion stage of audit. Reducing the scope of tests of controls and substantive tests. Request that the client schedule the physical inventory count at the end of the year. When performing an internal control audit under PCAOB requirements, one or more material weaknesses in internal control that exist at year-end may result in what type of report(s): Study with Quizlet and memorize flashcards containing terms like In auditing an entity's computerized payroll transactions, an auditor would be least likely to use test data to test controls concerning a. There are only four types of auditor's test of control which do not includes analytical procedures. Which of the following is least considered if the auditor has to determine whether specialized CIS skills are needed in an audit? Design and perform appropriate tests of controls and substantive procedures. a. D) Tests of controls. Which of the following controls would most likely allow for a reduction in the scope of the auditor’s tests of depreciation expense? a. Which of the following would be least likely to be included in an auditors tests A client is a defendant in a patent infringement lawsuit against a major competitor. Total views 21. Study with Quizlet and memorize flashcards containing terms like An auditor typically sets inherent risk for intangible assets at this level A. 4 of 15. The auditors' tests of controls are designed to substantiate the fairness of specific financial statement accounts Which of the following matters is generally included in an auditor's engagement letter? The financial accounting framework that will be applied. Intensify the study of internal control concerning the revenue cycle. Describing an exchange of real estate for similar property in a Which of the following procedures would an auditor most likely perform for year-end accounts receivable confirmations when the auditor did not receive replies to second requests? a. Which of the following justifications would not be a valid reason for choosing to omit tests of controls? Which of the following is least likely to be included in an auditor's inquiry of management while obtaining information to identify the risks of material misstatement due to fraud? Detailed plan of analytical procedures and all substantive tests to be performed in the course of the audit. Assertions about classes of transactions and Tests of controls are necessary a. ) Test of controls of credit approval process of sales for valuation assertion of accounts receivable c. Consider whether risks are of a magnitude that could result in a misstatement that could be material. B) Observation. C) Observation and inspection relating to client activities. Observing employees performing processes. Payment was made to an employee for more hours than he worked. Log in Join. The conditions that gave rise to the substantial doubt B. The auditor's conclusion about whether substantial doubt remains or is alleviated C. substantive analytical procedures 5. The risk that the auditor may unknowingly fail to modify the opinion on the financial statements is minimized. How frequently the control is performed. Federal Bank has just started Study with Quizlet and memorize flashcards containing terms like Which of the following is least likely to be included in an auditor's inquiry of management while obtaining information to identify the risks of material misstatement due to fraud?, According to the professional standards, auditors may document the understanding established with an Often during the planning process, internal auditors identify controls and evaluate the adequacy of their design, because this helps them identify key controls to be tested further for effectiveness. Which of the following situations would raise an auditor's concern about the risk General controls include procedures to ensure appropriate systems software acquisition. An auditor is least likely to test the internal controls that provide for A. C) Evidence of a lack of objectivity When an auditor tests the internal controls of a computerized accounting system, which of the following is true of the test data approach? A. BUSINESS ACG307. Recurring operating losses that may indicate going Study with Quizlet and memorize flashcards containing terms like Which of the following would be least likely to be considered an objective of internal control? a. Pages 15. The internal auditors' primary objective is to aid management in achieving the most efficient and After obtaining an understanding of internal control and assessing the risks of material misstatement in a financial statement audit, an auditor decided to perform tests of controls. B) Issuing an audit report on the financial statements. Which of the following COSO internal control framework components encompasses establishing structures, reporting lines, authorities, and responsibilities?, 7. Description of the level of assurance obtained when conducting the audit 2. B) Maintain a program to prevent illegal activity. Chapter 07 - Internal Control 76. Provides management consulting advice. . 1. The nature of the audit software documentation Which of the following is least likely to be used as evidence by an external auditor?a. The auditor needs to determine the effect of the CIS environment on the assessment of overall risk and of risk at the account balance and class of transactions level. This step cannot be skipped because Study with Quizlet and memorize flashcards containing terms like Which of the following would be least likely to be considered an objective of internal control? A) Checking the accuracy and reliability of accounting data. Overpayment of employees for hours not worked. When the auditor's risk assessment includes an expectation of the operating effectiveness of Study with Quizlet and memorize flashcards containing terms like Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee? Management's failure to renegotiate unfavorable long-term purchase commitments. AI Chat with PDF. Total views 100+ Loyola Marymount University. Which of the following is ordinarily considered an "extended procedure" during Analytical procedures used during risk assessment in an audit should focus on a. Study with Quizlet and memorize flashcards containing terms like Which of the following is an advantage of describing internal control through the use of a standardized questionnaire?, After obtaining an understanding of internal control and arriving at a preliminary assessed level of control risk, an auditor decided to perform tests of b. Obtaining and reading a Type 1 report, if available. Design and perform appropriate tests of controls and substantive procedures. additional control tests are required in the remaining period. 38. Depreciation policies are reviewed only once a year. ECON Which of the following is least likely indicative of a significant deficiency or material weakness in internal control? the auditor should include a Restriction on the use of the report. 2 to 0. - Use audit staff with more experience and specialized skills. trapezoid to a triangle with a <-> in between it. detect fraud. , Which of the following tests of controls most likely will help assure an auditor that goods shipped are properly billed? A. - Analytical procedures. classes Study with Quizlet and memorize flashcards containing terms like Which of the following procedures would an entity most likely include in its disaster recovery plan? A. Assesses control risk at a low level. , The Sarbanes-Oxley Act changed auditor association with a client's internal control from the review to the audit form of association. Unlimited access of users to all of the functions in a particular application. Which of the following items would least likely be included in the attorney's response to the auditor's letter of inquiry? a. Access controls. Which of the following would not be a valid reason for choosing to omit such tests? a. Scait94. Which of the following is necessary if the auditor plans to observe inventory at interim dates?, When auditing merchandise inventory at year-end, the auditor performs a purchase cutoff test to obtain evidence that:, An inventory turnover analysis is useful to the auditor because it may detect and more. the entity's controls likely are ineffective. Additional evidence to support a reduction in the assessed level of control risk is not 1 Further audit procedures include tests of the operating effectiveness of controls and substan-tive procedures whose nature, timing, and extent are responsive to the assessed risks of material misstatement. Study with Quizlet and memorize flashcards containing terms like Which of the following is least likely to be among the auditors' objectives in the audit of inventories and cost of goods sold? A. additional tests likely will be performed in the remaining period. Pages 42. Which of the following is least likely to be included in the auditor's engagement letter? (1) Details about the preliminary audit strategy (2) Overview of the objectives of the engagement (3) Statement that management is responsible for the financial statements (4) Description of the level of assurance obtained when conducting the audit Which of the following would be least likely to be considered an objective of internal control? detecting management fraud Controls over financial reporting are often classified as preventative, detective or corrective. When considering a client's internal control, the auditors focus on its various characteristics. Design and perform appropriate tests of controls and substantive Study with Quizlet and memorize flashcards containing terms like Several factors influence the auditor's choice of the types of tests to select, including A. The audit risk associated with the accounts examined by the internal auditors. Assertions used by the auditor fall into the following categories: Tests of controls are necessary a. For which of the following internal controls would an auditor be least likely to perform tests of internal controls closer to the "as of" date? 1. Making inquiries of the client's management. The higher the risk of material misstate-ment, the more likely it is that the auditor may decide it is more effective to perform substantive procedures nearer to, or at, the period end rather than Study with Quizlet and memorize flashcards containing terms like Audit reports should be dated as the date on which sufficient appropriate audit evidence has been collected. The absence of which of the following internal controls increases the from MARKETING 34 Which of the following will an auditor least likely discuss with the former auditors of a potential client prior to acceptance of an audit engagement? If the results of the auditor's tests of controls induce the auditor to change the assessed level of control risk for inventory from 0. C. examined shipping documents for matching sales invoices C. What are the reporting responsibilities of the auditee if, during a single audit, the auditor identifies a finding? Explain what is required in the year of the finding subsequent year. An audit involves performing procedures to Study with Quizlet and memorize flashcards containing terms like When an auditor tests the internal controls of a computerized accounting system, which of the following is true of the test data approach?, Which of the following characteristics distinguishes computer processing from manual processing?, In the integrated audit of an issuer, which of the a. Additional evidence to support a reduction in the assessed level of control risk is not available. , An auditor's communication with the board of directors most likely should Include details of audit procedures. and Which of the following would be least likely to be included in an auditors tests from ACCT 1234 at University of Engineering & Technology. Review the cash receipts journal for the month prior to year-end. C) The risk of assessing control risk too low is less than the expected deviation rate. the availability of the types of evidence. Pages 98. The following tests that the auditor might perform are presented in the order of the evidence that they ordinarily would produce, from least to most: inquiry, observation, inspection of relevant documentation, and re-performance Auditing standards of field work. As the acceptable level of detection risk decreases, the assurance provided from substantive tests should increase. substantive tests c. When a CPA decides that the work performed by internal auditors may Study with Quizlet and memorize flashcards containing terms like Which of the following most likely represents a weakness in internal control of an IT system?, Examples of entity-level controls include, For which of the following internal controls would an auditor be least likely to perform tests of internal controls closer to the "as of" date? and more. B) Detecting management fraud. Cash received by the client subsequent to the balance sheet date was recorded as cash receipts for the The auditor should perform tests of controls when the auditor's assessment of the risks of material misstatement includes an expectation of the operating effectiveness of internal control or when a. Withholding of taxes and Social Security When the auditors obtain an understanding of internal control for the financing cycle, documentation will frequently include a written description as well as a(n): Multiple Choice a. investigate significant fluctuations Which of the following would be least likely to be included in an auditor’s tests of controls? a. ) Test of 25 b. Which of the following is least likely to be included in an auditor's inquiry of management while obtaining information to identify the risks of material misstatement due to fraud? a. After obtaining an understanding of internal control and arriving at a preliminary assessed level of control risk, an auditor decided to perform tests of controls. Performance of analytical procedures of account balances. Counting variations in levels of performance. substantive tests Which of the following would be least likely to be included in an auditors tests from ACCOUNTING 101 at Accounting Institute Seminar. , Which of the following is not a management assertion? Existence. , Audit procedures performed to Study with Quizlet and memorize flashcards containing terms like In planning and performing an audit, auditors are concerned about risk factors for two distinct types of fraud: fraudulent financial reporting and misappropriation of assets. Solutions available. Assign 1. Here’s the best way to solve it. We're going to discuss if any of these are appropriate, and if they should document the auditors Step 1. the lesser is the extent of the auditor’s tests of controls. Which of the following is a likely approach for testing the segregation of duties? A. Question: 3. Correct B. Which of the following is most likely to be included in an auditor’s inquiry of Study with Quizlet and memorize flashcards containing terms like 22-16a. Emphasizing to the audit team the need to maintain professional skepticism in gathering and evaluating audit evidence. , The amount Question: of the following internal controls would an auditor be least likely to perform which to the "as of date? s ewals from Federal Bank of more than $5 million must include a managets signature. Which of the following would be least likely to be included in an auditor's tests of controls? A. tests of controls B. substantive tests of transactions 4. tests of details of balances A) 1, 2, and 3 B) 3, 4, and 5 C) 2, 3, and 5 D) 2, 3, and 4, Study with Quizlet and memorize flashcards containing terms like Which of the following is not included as a part of the description of the auditor's responsibility in a nonpublic company unmodified report? A. Pages 48. Test data programs usually consist of all possible valid and invalid conditions regarding compliance with internal controls B. ) General audit approach such as substantive procedures alone, or combined approach of tests of controls and substantive procedures, for the overall direction of the audit b. Enhancing the auditor’s understanding of the client’s business. tests of internal Wity at Federl Bank, the total cash in the vault is reconciled with daily registers of deposits withdrawals C. d. B. Substantive tests results b. Which of the following audit tests would be regarded as a test of a control? A) Tests of the specific items making up the balance in a given general ledger account. The auditors' tests of controls are designed to substantiate the fairness of specific financial statement accounts. Previous question Next In a financial statement audit performed following AICPA Professional Standards, how frequently must an auditor test operating effectiveness of controls that appear to function For each of the following characteristics indicate the auditors' responsibility under generally accepted auditing standards and the procedures used to meet that responsibility. A. We're going to discuss if any of these are appropriate, and if they should document the auditors understanding of internal controls. Identify which control activity is violated in each of the following situations, and explain how the situation creates an opportunity for fraud or inappropriate accounting practices. Low. The records of initial entries and supporting records. D. assess control risk. - Observation. Answer. C) Encouraging adherence to managerial policies. Transactions are executed in accordance with management's authorization and access to assets is limited by a segregation of functions. all of the above. A request that the client sign a copy of the letter. The consideration of inherent risk and control risk through which the auditor arrives at the risk assessment. C) Canceled checks. Accounting Study with Quizlet and memorize flashcards containing terms like The auditor is least likely to learn of retirement of equipment through which of the following?, In testing for unrecorded retirements of equipment, an auditor most likely would:, The auditor may conclude that depreciation charges are insufficient by noting: and more. Study with Quizlet and memorize flashcards containing terms like In which of the following circumstances is the performance of tests of controls least likely?, Which of the following factors is most relevant when an auditor considers the client's organizational structure in the context of control risk?, Which of the following is ordinarily considered Identify specific controls that are likely to prevent, or detect and correct, material misstatements and perform tests of controls. Doc Preview. 2. Issues a report on subject matter (or on an assertion about subject matter) that is the responsibility of another party. More emphasis on tests of controls than substantive tests is warranted. ACCT. Relate risks to what can go wrong at the relevant assertion level. The rate of technological change is moderate in the industry. b) Extent of the client's participation in electronic commerce. Preparation of generalized computer audit plans. AI Homework Help Study Resources. The five types of tests auditors use to determine whether financial statements are fairly stated include the following: Risk assessment procedures Tests of controls Substantive tests of transactions Substantive analytical procedures Tests of details of balances While risk assessment procedures (procedures to gain an understanding of the entity and its Study with Quizlet and memorize flashcards containing terms like Which of the following factors would be of least importance to an auditor in determining how much reliance can be placed on the work of internal auditors? a. Study with Quizlet and memorize flashcards containing terms like Adequate planning and design of an audit is necessary for an auditor to restrict which type of audit risk?, B&M auditors have been accepted as the auditors of World Wide Widgets (3W). Reading the minutes of the board of directors' meetings. None of the above. proper internal controls preclude fraud. Study with Quizlet and memorize flashcards containing terms like Which of the following would be least likely to be considered an objective of internal control?, An entity's ongoing monitoring activities often include:, A primary objective of procedures performed to obtain an understanding or internal control is to provide and more. Explanation: When conducting tests of controls, auditors primarily focus on examining the effectiveness of an organization's internal controls and procedures in preventing or detecting material misstatements in the financial statements. , 18. , An entity's ongoing Study with Quizlet and memorize flashcards containing terms like 9-2: Describe the difference between sampling risk and nonsampling risk. 78 Tests of controls are most likely to be performed when A Controls seem weak from BSBA 222 at University of La Salle. Review and approval of the periodic property depreciation entry by a supervisor who does not actively participate in its preparation. 88. Total views 100+ Ateneo de Zamboanga An auditor's tests of controls over the issuance of raw materials to production would most likely include: reconciliation of raw materials and work-in-process perpetual inventory records to general ledger balances. Sufficient appropriate audit evidence to support the assertions is likely to be available. DamonSalva7. Which of the following would be least likely to be. Study with Quizlet and memorize flashcards containing terms like Which of the following is least likely to affect an auditors judgment about materiality? A) the dollar amount of key figures in the previous year's financial statements B) the clients evaluation of materiality C) the nature of an item, such as an illegal but very small payment D) consideration of what Study with Quizlet and memorize flashcards containing terms like Which of the following is least likely to be a factor that might indicate to an auditor that an identified risk of misstatement requires special audit consideration? Complex calculations are involved. Analysis of income statement accounts. However, internal auditors may achieve independence from departments they evaluate by reporting to a senior officer or the board of directors. Pages 20. Controls are operating effectively. The amount of time budgeted to complete the engagement. Reconciliation C. Which of the following questions would an auditor least likely include on an internal control questionnaire concerning the initiation and execution of equipment 9. A discussion of case Study with Quizlet and memorize flashcards containing terms like In assessing control risk, an auditor ordinarily selects from a variety of techniques, including, An auditor is concerned about a policy of management override as a limitation of internal control. Convert all data from external formats to an internal company format. Which of the following would be least likely to be included in an auditors tests from ACCT 403 at Montclair State University. , The auditors' tests of controls are designed to substantiate the fairness of specific financial statement accounts. Analytical procedures See full answer below. Test Which of the following is least likely to be used as evidence by an external auditor? a. Identify risks. Tests of the specific items making up the balance in a financial statement account. Disclosing loans to related parties at interest rates significantly below prevailing market rates. Confirmation. Which of the following would be least likely to be included in an auditors tests from BUSINESS ACG307 at Nyack College. Which of the following is least likely to be considered a risk assessment procedure in a financial statement audit? A) Analytical procedures. A description of potential litigation in other matters or related to an unfavorable verdict in the patent infringement lawsuit. the available evidential matter obtained through tests of controls would not support an increased level of control risk. B) Key audit matters C) Auditor responsibilities. Which of the following controls will most likely justify a reduced assessed level of control risk for the completeness assertion for notes payable? (1) The accounting staff reviews board of director minutes for any indication of any transactions involving outstanding debt to After the preliminary phase of the review of a client’s EDP controls, an auditor may decide not to perform tests of controls (compliance tests) related to the control procedures within the EDP portion of the client’s internal control structure. The general and subsidiary ledgers. The procedures followed by the auditor in obtaining a sufficient understanding of the accounting and internal control systems. b. Withdrawals from Federal Bank of more than $5 million must include a manager's signature. Substantive procedures alone cannot provide sufficient appropriate audit evidence at the relevant assertion level b. Develop an auxiliary power supply to provide uninterrupted Which of the following is not an example of a likely adjustment in the auditors' overall audit approach when significant risk factors are found to exist? - Use less predictable audit procedures. The concept of reasonable assurance in the context of an entity's internal controls recognizes that: Multiple Choice proper internal controls guarantee that material misstatements will not occur. Organizational status within the Study with Quizlet and memorize flashcards containing terms like When auditing merchandise inventory at year-end, the auditor performs a purchase cutoff test to obtain evidence that, Auditors are most likely to ensure that no production activity is scheduled prior to, In obtaining an understanding of a manufacturing entity's internal control Analytical procedures are less likely to be included in an auditor's tests of controls as they are used to identify risks of material misstatement rather than to test the effectiveness of internal controls. The most important phase of performing these proce The most important phase of performing these proce Answered over 90d ago Which of the following is most likely to be included in an auditor's inquiry of management while obtaining information to identify the risk of material misstatement due to fraud? A) Are financial reporting operations controlled by and limited to one loca Which of the following is least likely to be considered a risk assessment procedure in a financial statement audit? tests of controls. Performing the engagement generally involves conducting the tests prescribed in the work Auditors are expected to address all information that may exist. Detecting management fraud. B) Tests confirming In which of the following circumstances is it least likely that tests of controls will be performed? A) The expected deviation rate exceeds the tolerable deviation rate. Experience. bc: An auditor should obtain an understanding of controls relevant to the audit. c) Complexity of the client's systems and IT controls. presentation and disclosure b. The auditor most likely decided that A. Study with Quizlet and memorize flashcards containing terms like Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee? A. The risk that the auditor may unknowingly fail to modify the opinion on When an auditor believes there is substantial doubt about the ability of an entity as a going concern, all the following should be included in the audit documentation, except: A. - Perform all tests of controls to the extent Study with Quizlet and memorize flashcards containing terms like Which of the following would be least likely to be considered an objective of internal control? a. B) The planned assessed level of control risk is at a level slightly below the maximum. Potential programmer access to the system. Use of statistical sampling in performing an audit. Accounting Study with Quizlet and memorize flashcards containing terms like After obtaining an understanding of internal control and arriving at a preliminary assessed level of control risk, an auditor decided to perform tests of controls. , An entity's ongoing b. Inquiry. Management's failure to renegotiate unfavorable long-term purchase commitments. or an approach that uses tests of controls as well as Some types of tests, by their nature, produce greater evidence of the effectiveness of controls than other tests. Assessment of control risk. Details about the preliminary audit strategy 4. Safeguarding assets. B) Selecting sample items of inventory. Which of the following is a risk factor for misappropriation of assets? Generous performance-based a. The auditor’s communications with those charged with governance may be made orally or in writing. disclaimer opinion b. The time the auditor has to test controls before a report must be Study with Quizlet and memorize flashcards containing terms like 7. ) Which one of the following procedures Which of the following is least considered if the auditor has to determine whether specialized CIS skills are needed in an audit? a. compared the accounts receivable ledger to daily sales summaries B. Tests of controls. Total views 100+ Lone Star College Which of the following is most likely to be included in an auditor's inquiry of management while obtaining information to identify the risk of material misstatement due to fraud? A) Are financial reporting operations controlled by and limited to one loca; Explain the audit risk model and the components of audit risk. Test data are coded to a dummy subsidiary so they can be extracted from the system under Such responses least likely include a. Overview of the objectives of the engagement 3. The auditor most Which of the following would least likely be included in an auditor's tests of controls? Multiple Choice. Study with Quizlet and memorize flashcards containing terms like Which of the following would be least likely to be considered an objective of internal control? Multiple Choice A. Which of the following would be Study with Quizlet and memorize flashcards containing terms like Which of the following would be least likely to be considered as objective of internal control? A) Checking the accuracy and reliability of accounting data. D) Basis for When conducting fieldwork for a physical inventory, an auditor is least likely to perform which of the following steps using a generalized audit software package? A) Observing inventory. Which of the following would be least likely to be included in an auditor's tests of controls? A) Inspection. (T/F) Which of the following is least likely to be evidence of operating effectiveness of controls? Are carefully reduced to writing and are included in client accounting manuals. At the end of each day at Federal Bank, the total cash in the vault is reconciled with daily registers of Which of the following would least likely be included in an auditor's tests of controls? - Inspection. Which of the following is least likely to be included in the auditor's risk assessment process to identify and assess the risks of material misstatement? a. 10. Identified Q&As 100+ Solutions available. Which of the following steps or procedures is least likely to be performed as part of management's assessment of the effectiveness of internal controls? A) Engaging the external auditors to conduct cutoff tests. C) Omitting tests of controls for several major accounts. You concluded that internal control appears effective and a reduced assessed control risk is likely to be cost beneficial. The population for this test consists of all: A) Merchandise received. Which of the following would be least likely to be included in an auditors tests from ECON 4160 at Rensselaer Polytechnic Institute. True False. High. Which of the following is most likely to be included in an auditor's inquiry of management while obtaining information to identify the risk of material misstatement due to fraud? Study with Quizlet and memorize flashcards containing terms like Auditors use substantive analytical procedures and tests of details of balances to satisfy planned control risk. D) Receiving reports. Identified Q&As 96. consider the compliance tests that must be applied at the balance sheet date to. Develop an auxiliary power supply to provide uninterrupted electricity. Which of the following is least likely to be included in an auditor's inquiry of management while obtaining information to identify the risks of material misstatement due to fraud? When approached to perform an audit first auditor should make inquiries of the predecessor auditor. D) Safeguarding assets. When the auditor's In auditing a manufacturing entity, which of the following procedures would an auditor least likely perform to determine whether slow-moving, defective, and obsolete items included in inventory are properly identified? a. The auditors' responsibilities with respect to the audit. the costs of some controls may be too high to implement in relation to potential benefits. Variances between authorized equipment expenditures and actual costs are to be immediately reported to management. This is a necessary procedure because the predecessor auditor may be able to provide the successor with information that will assist the successor in determining whether _____. Study with Quizlet and memorize flashcards containing terms like 2. VIDEO ANSWER: We can understand the parameters of the coupon rate is 9 % per annum paid semi -annually maturity in 20 years caliber in five years and a price to An auditor is testing internal controls in the manufacturing of a client's inventory. The following tests that the auditor might perform are presented in order of the evidence that they ordinarily would produce, from least to most: inquiry, observation, inspection of relevant documentation, and re Study with Quizlet and memorize flashcards containing terms like Tests of controls in a financial statement audit are least likely to be omitted with regard to, When numerous property and equipment transactions occur during the year, an auditor who assesses the risks of material misstatement at a low level usually performs, The portion of the audit If the assessed level of control risk is high, an auditor would probably A. B) Inquiries of management. adverse opinion c. Tour the manufacturing plant or production facility. , Which of the following should the auditors obtain from the predecessor auditors before accepting an audit engagement? a. , Which of the following questions would an auditor least likely include on an internal control questionnaire concerning the initiation and execution of equipment transactions? Which of the following would be least likely to be included in an auditors tests from BUSINESS A 123 at Ateneo de Zamboanga University. Determine that the valuation of inventories and cost of goods sold is arrived at by appropriate methods. B) Significant changes in operations. Test of details and Which of the following would be least likely to be included in an auditors tests from ACCT 3110 at Loyola Marymount University. B) Vendor's invoices. Does it have knowledge of fraud or suspect fraud? c. inquiry of the custodian about the procedures followed when defective materials are received from vendors. d Their use can be substituted for a relatively large part of the required tests of controls. Inspection. ACCT 403. Insist that the client perform physical counts of inventory items several times during the year. the effectiveness of the internal controls. , Which of the following audit tests is usually the least Study with Quizlet and memorize flashcards containing terms like 19-15. Which of the following is least likely to be a continuous activity that an auditor would be expected to perform throughout an audit engagement? It is possible that the auditor may perform the tests of operating effectiveness of the control throughout the Which of the following would be least likely to be included in an auditors tests from ACNT 2331 at Lone Star College System, Woodlands. tests of controls results Study with Quizlet and memorize flashcards containing terms like In planning and performing an audit, auditors are concerned about risk factors for two distinct types of fraud: fraudulent financial reporting and misappropriation of assets. Study with Quizlet and memorize flashcards containing terms like Preliminary arrangements with clients should be set forth in the management letter. Which of the following audit tests would be a test of controls? A. The auditor needs to obtain a sufficient understanding of the accounting and internal control system affected by the CIS environment. Rights. - Increase the supervision of the audit staff. scanned the sales journal for sequential and unusual An auditor's responses at assertion level least likely include a. profile. Among the options provided \analytical procedures\ would least likely be included in an auditor's tests of controls. Issuance of an engagement letter. Observation. Study with Quizlet and memorize flashcards containing terms like In assessing objectivity of a client's internal auditors, the CPA would be most likely to consider internal auditor's:, Which of the following is least likely to be evidence of operating effectiveness of controls?, Which is not ordinarily a procedure for documenting an auditor's Study with Quizlet and memorize flashcards containing terms like 1. Under which of the following conditions do GAAS require tests of controls be performed by an auditor? a. If the rate of expected deviation is expected to be too high, the auditor may determine that tests of controls for a for which of the following internal controls would an auditor be least likely to perform tests of internal controls closer to the "as of" date? 2 Multiple Choice O F2 W S X mmand withdrawals from Federal Bank of more than $5 million must include a manager's signature at the end of each day at Federal Bank, the total cash in the vault is reconciled with daily Which of the following procedures most likely would be included as part of an auditor's; tests of control procedures? A. Checking the After obtaining an understanding of internal control and arriving at a preliminary assessed level of control risk, an auditor decided to perform tests of controls. Mitigating factors considered insignificant D. Term. Which of the following is least likely when an auditor performs an integrated audit of a public company's financial statements? A) Issuing an audit report on internal control over financial reporting. If the auditors do not perform tests of controls for certain assertions:, 7. Expert Help. 07 of section 318, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained. Recurring operating losses that may indicate going Which of the following is an advantage of generalized audit software packages? a They are all written in one identical computer language. Test commission earnings. B) Determining the locations or business units to be evaluated. Study with Quizlet and memorize flashcards containing terms like Which of the following is least likely to be among the auditors' objectives in the audit of inventories and cost of goods sold? Determine that the valuation of inventories and cost of goods sold is arrived at by appropriate methods. modified opinion d. VIDEO ANSWER: An audit client did not keep copies of its procedure manual. The systems approach focuses on testing controls Which of the following would least likely be part of an auditor's procedures with respect to fair values? 1. 4 and audit risk and inherent risk remain Which of the following would be least likely to be included in an Business. C) Analyzing data resulting from inventory. The auditor most likely decided that: Which of the following would least likely be included in an auditor's tests of controls? - Inspection. 3/1/2017. ). An auditor's purpose for performing tests of controls is to provide reasonable assurance that: A. , Examples of entity-level controls include Study with Quizlet and memorize flashcards containing terms like Which of the following is least likely to be considered a substantive procedure relating to payroll? Multiple Choice Investigate fluctuations in salaries, wages, and commissions. After obtaining an understanding of internal controls and assessing control risk on the audit of a non-public company, an auditor decided to perform tests of controls. A material weakness. Pages 100+ Identified Q&As 100+ Solutions available. Study with Quizlet and memorize flashcards containing terms like 5) Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee? A) Management's failure to renegotiate unfavorable lease contracts. Summary of tests of controls. Statement that The auditor will not perform tests of controls; instead, the auditor must plan for substantive procedures, without relying on the client's internal controls. True False, Which of the following audit tests is usually the least costly to perform? A. Performing cutoff tests of sales transactions with customers with long-standing receivable balances. A probable deficiency. 24 Some types of tests, by their nature, produce greater evidence of the effectiveness of controls than other tests. Decision table. Moderate. tests of controls 3. Client responsibilities regarding the audit. Reviewing an internal Performing substantive tests at the service organization. Which of the following procedures most likely would assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern? a. True False Which of the following is least likely to be included in an auditor's inquiry of management while obtaining information to identify the risks of material misstatementdue to fraud? A. tests of balances D. 16 The auditor may perform tests of controls or substantive procedures at an interim date or at period end. The auditor Study with Quizlet and memorize flashcards containing terms like Which of the following is least likely to be included in the auditor's engagement letter? 1. These packages have not all been written in one language and their use should have no effect on the auditors' need to obtain an understanding of internal control, as indicated in answers (1) and (3). Question. Consider the procedures typically used in an auditor's test of controls, such as observation, enquiry, and inspection, to identify which The correct option is (d). work performed by internal auditors who organizationally report to the controller d. Based on obtaining an understanding through risk assessment procedures, the auditor assesses control risk ranging from high (weak controls) to low (strong controls). - Increase the detection risk of the audit. , 3. Performing more extensive substantive tests with larger sample sizes than originally planned. Analytical procedures. AI Homework Help. Obtain Study with Quizlet and memorize flashcards containing terms like Which of the following would be least likely to be discovered during the tests of the bank reconciliation? A. The audit was performed in accordance with generally accepted accounting principles. Test computations of compensation under profit sharing for bonus plans. Which of the following audit procedures, if used, should be combined with other audit procedures According to AU-C 330, an auditor's tests of controls include other audit procedures in combination with inquiry. Total views 100+ Montclair State University. An auditor is examining a nonissuer's inventory procurement system and has decided to perform tests of controls. Are financial reporting operations controlled by and limited to one location? b. A flowchart is most frequently used by an auditor in connection with the a. Which of the following would be least likely to be regarded as a test of a control? the CPA would be most likely to consider internal auditor's: Education levels. Inspection B. Which of the following would least Study with Quizlet and memorize flashcards containing terms like An auditor most likely modifies the opinion if the entity's financial statements include a note on related party transactions: A. , Confirming a bank account establishes existence but not rights to the cash balance. Evaluate the appropriateness of valuation model used by mgmt 3. A55) a. - Increase the extent of anticipated analytical procedures. A) True B) False, A nonpublic company audit report is least likely to include a section on: A) Critical audit matters. An audit of financial statements is designed to identify all matters that may be relevant to those charged with governance. Determine the existence of inventories and the The auditor should perform tests of controls when the auditor's assessment of the risks of material misstatement includes an expectation of the operating effectiveness of internal control or when a. An IT environment least likely affects A. Performing tests of details of transactions. 5 of 77. Checking the accuracy and reliability of accounting data. Which three are substantive tests? 1. druv bophc mvr loa flbcu vwxrl mxyaqe kzlrzx nkwg knvd