Which of the following would least likely be included in an auditors tests of controls

Which of the following would least likely be included in an auditors tests of controls. 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. The risk that the auditor may unknowingly fail to modify the opinion on the financial statements is minimized. 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. , 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. True False, Which of the following audit tests is usually the least costly to perform? A. 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. Which of the following is a risk factor for misappropriation of assets? a) Generous performance-based b. work performed by internal auditors who report to the audit committee of the board of directors b. the effectiveness of the internal controls. Evaluate the appropriateness of valuation model used by mgmt 3. Pages 100+ Identified Q&As 100+ Solutions available. 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. Doc Preview. A detailed evaluation of the riskiest areas of the audit. B) Key audit matters C) Auditor responsibilities. , 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. . The expected deviation rate from the control. Which of the following would not be a valid reason for choosing to omit such tests? a. . B) Inquiries of management. 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. 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. , 2. AI Homework Help Study Resources. Use of statistical sampling in performing an audit. The consideration of inherent risk and control risk through which the auditor arrives at the risk assessment. As the acceptable level of detection risk decreases, the assurance provided from substantive tests should increase. 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. An auditor is least likely to test the internal controls that provide for A. 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. 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. Test of details and substantive analytical The auditor performs a preliminary risk assessment for a new client. 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. List of audit objectives. A probable deficiency. Scait94. ACCT. Provides management consulting advice. B. Under which of the following conditions do GAAS require tests of controls be performed by an auditor? 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. 88. Which of the following is a likely approach for testing the segregation of duties? A. tests of balances D. 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. 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. You concluded that internal control appears effective and a reduced assessed control risk is likely to be cost beneficial. Study with Quizlet and memorize flashcards containing terms like An auditor typically sets inherent risk for intangible assets at this level A. Which of the following procedures would an entity most likely include in its disaster recovery plan? A. Description of the level of assurance obtained when conducting the audit 2. Here’s the best way to solve it. inquiry of the custodian about the procedures followed when defective materials are received from vendors. 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. 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. Solutions available. , 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. Tests of controls are least likely to include: A) Inquiries of appropriate client vendors. 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. evaluate management. Withdrawals from Federal Bank of more than $5 million must include a manager's signature. Review the cash receipts journal for the month prior to year-end. tests of internal Wity at Federl Bank, the total cash in the vault is reconciled with daily registers of deposits withdrawals C. Substantive procedures alone cannot provide sufficient appropriate audit evidence at the relevant assertion level b. 24 Some types of tests, by their nature, produce greater evidence of the effectiveness of controls than other tests. 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 _____. Identified Q&As 96. Determine that the valuation of inventories and cost of goods sold is arrived at by appropriate methods. compared the accounts receivable ledger to daily sales summaries B. Chapter 07 - Internal Control 76. Based on obtaining an understanding through risk assessment procedures, the auditor assesses control risk ranging from high (weak controls) to low (strong controls). tests of controls B. Which of the following would be least likely to be included in an auditor's tests of controls? A. Log in Join. C. , 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. However, internal auditors may achieve independence from departments they evaluate by reporting to a senior officer or the board of directors. Develop an auxiliary power supply to provide uninterrupted electricity. 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. AI Homework Help Log in Join. 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. , 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. Disclosing loans to related parties at interest rates significantly below prevailing market rates. Inquiry. Which of the following would be least likely to be included in an auditor's tests of controls? A) Inspection. A) True B) False, A nonpublic company audit report is least likely to include a section on: A) Critical audit matters. True. Identifying specific internal control structure policies and procedures relevant to specific assertions. 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. Under this scenario, the auditor would most likely take which of the following actions? a. 16 The auditor may perform tests of controls or substantive procedures at an interim date or at period end. Encouraging adherence to managerial policies. B) Reperformance of a control. 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. 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. - 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. High. 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. Performing cutoff tests of sales transactions with customers with long-standing receivable balances. How frequently the control is performed. BUSINESS. trapezoid to a triangle with a <-> in between it. , The Sarbanes-Oxley Act changed auditor association with a client's internal control from the review to the audit form of association. D) Confirmation. 3/1/2017. Approval of the purchase and sale of marketable securities. 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. There are only four types of auditor's test of control which do not includes analytical procedures. , 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 a risk factor for misappropriation of assets? Generous performance-based a. Issues a report on subject matter (or on an assertion about subject matter) that is the responsibility of another party. the entity's controls likely are ineffective. Once a Q The auditors use analytical procedures during the course of an audit. 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. Assertions used by the auditor fall into the following categories: Tests of controls are necessary a. 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. 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. 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. 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. 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. Total views 100+ Rensselaer Polytechnic Institute. 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. Detecting management fraud. modified opinion d. Study with Quizlet and memorize flashcards containing terms like 1. The auditor needs to obtain a sufficient understanding of the accounting and internal control system affected by the CIS environment. profile. Obtaining the user organization's representation regarding the effectiveness of the service organization's controls. - Increase the detection risk of the audit. The general and subsidiary ledgers. disclaimer opinion b. When dec View the full answer Answer. 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. Possible lack of visible transaction trail. Develop an independent fair value estimate 4. Counting variations in levels of performance. More emphasis on tests of controls than substantive tests is warranted. presentation and disclosure b. 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. 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. obtain more persuasive audit evidence the higher the auditor's assessmentofrisk. (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. The audit risk associated with the accounts examined by the internal auditors. No. 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. b. 78 Tests of controls are most likely to be performed when A Controls seem weak from BSBA 222 at University of La Salle. Assesses control risk at a low level. b c They have reduced the need for the auditor to study input controls for computer related procedures. Low. 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. Making inquiries of the client's management. 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. Review of the client's internal control. Decision table. D. Mitigating factors considered insignificant D. ACCT 403. 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. Confirmation VIDEO ANSWER: An audit client did not keep copies of its procedure manual. Which of the following items would least likely be included in the attorney's response to the auditor's letter of inquiry? a. , Which of the following is not a management assertion? Existence. Correct B. Pages 42. Obtaining and reading a Type 1 report, if available. Personal inquiry and confirmation. The auditors' responsibilities with respect to the 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. Does it have knowledge of fraud or suspect fraud? c. - Use audit staff with more experience and specialized skills. 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. AI Homework Help. c. and Which of the following would be least likely to be included in an auditors tests from ACCT 1234 at University of Engineering & Technology. Pages 48. 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. Which of the following would be least likely to be. 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. An insignificant deficiency. An increase in the assessed level of control risk is justified for certain financial statement assertions. 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. Additional evidence to support a reduction in the assessed level of control risk is not available. the lesser is the extent of the auditor’s tests of controls. all of the above. Test commission earnings. Confirmation D. Control and distribution of unclaimed checks. Providing assurance that potential material misstatements will be identified. 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. C) Canceled checks. , 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. 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. Documentation. Expert Help. Which three are substantive tests? 1. Consider whether risks are of a magnitude that could result in a misstatement that could be material. Variances between authorized equipment expenditures and actual costs are to be immediately reported to management. The amount of time budgeted to complete the engagement. 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. 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. 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. , Which of the following should the auditors obtain from the predecessor auditors before accepting an audit engagement? a. 07 of section 318, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained. Test data are coded to a dummy subsidiary so they can be extracted from the system under Such responses least likely include a. 5 of 77. B) Issuing an audit report on the financial statements. - Inquiry. Request that the client schedule the physical inventory count at the end of the year. 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. a. Performing more extensive substantive tests with larger sample sizes than originally planned. 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. Potential programmer access to the system. A description of potential litigation in other matters or related to an unfavorable verdict in the patent infringement lawsuit. An IT environment least likely affects A. 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 records of initial entries and supporting records. The auditor’s communications with those charged with governance may be made orally or in writing. VIDEO ANSWER: An audit client did not keep copies of its procedure manual. Performance of analytical procedures of account balances. An auditor should perform tests of controls on significant control deficiencies before communicating them to the client. Which of the following controls would most likely allow for a reduction in the scope of the auditor’s tests of depreciation expense? a. detect fraud. 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. 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. 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. Overview of the objectives of the engagement 3. risk assessment procedures 2. Term. Increase the extent of tests of controls for the inventory cycle. C) Analyzing data resulting from inventory. A55) a. auditors may fail Study with Quizlet and memorize flashcards containing terms like 1. See paragraph . Which of the following questions would an auditor least likely include on an internal control questionnaire concerning the initiation and execution of equipment 9. Which of the following audit tests would be a test of controls? A. 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. Review and approval of the periodic property depreciation entry by a supervisor who does not actively participate in its preparation. , An entity's ongoing Study with Quizlet and memorize flashcards containing terms like 9-2: Describe the difference between sampling risk and nonsampling risk. 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) Extent of the client's participation in electronic commerce. 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. Assertions used by the auditor fall into the following categories: I. 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. - Analytical procedures. 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. 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. Design and perform appropriate tests of controls and substantive procedures. 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. Performing tests of details of transactions. For each of the following characteristics indicate the auditors' responsibility under generally accepted auditing standards and the procedures used to meet that responsibility. Unlock. , 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. 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. 2. Rights. adverse opinion c. Sufficient appropriate audit evidence to support the assertions is likely to be available. Moderate. the available evidential matter obtained through tests of controls would not support an increased level of control risk. Tests of controls. 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. Test computations of compensation under profit sharing for bonus plans. The population for this test consists of all: A) Merchandise received. 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). Study Resources. We're going to discuss if any of these are appropriate, and if they should document the auditors Step 1. Pages 27. Which of the following would be least likely to be included in an auditors tests from ACCT 403 at Montclair State University. Details about the preliminary audit strategy 4. 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. Review subsequent events occurring after completion of audit for evidence regarding FV measurements as of B/S date 2. Internal control questionnaire. The conditions that gave rise to the substantial doubt B. Tests of the specific items making up the balance in a financial statement account. Inspection. 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. additional tests likely will be performed in the remaining period. 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. Payment was made to an employee for more hours than he worked. 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. C) The risk of assessing control risk too low is less than the expected deviation rate. Reconciliation. The independent auditors' objective is to express an opinion on the client's financial statements. 2 to 0. 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. investigate significant fluctuations Which of the following would be least likely to be included in an auditor’s tests of controls? a. Which of the following would be least likely to be included in an auditors tests from BUSINESS ACG307 at Nyack College. 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. Total views 21. Question. Apply gross Correct:(B)t. The auditor most likely decided that A. The rate of technological change is moderate in the industry. 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. 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. additional control tests are required in the remaining period. Client responsibilities regarding the audit. 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. Intensify the study of internal control concerning the revenue cycle. Unlimited access of users to all of the functions in a particular application. BUSINESS ACG307. , An auditor's communication with the board of directors most likely should Include details of audit procedures. 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. Valuation. 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. Assessing the adequacy of the available evidence. Maintain a program to prevent illegal activity. work performed by internal auditors who organizationally report to the controller d. Experience. , 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. System development and maintenance Study with Quizlet and memorize flashcards containing terms like statements are fairly stated. Study with Quizlet and memorize flashcards containing terms like 2. A material weakness. For this purpose, inquiry combined with inspection, a. d Their use can be substituted for a relatively large part of the required tests of controls. , Which of the following procedures would least likely be included to test management's assertion of valuation, allocation, and accuracy? A. Reconciliation C. 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. 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. 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. When considering a client's internal control, the auditors focus on its various characteristics. D) Tests of controls. Which of the following would be least likely to be included in an auditors tests from ECON 4160 at Rensselaer Polytechnic Institute. Summary of tests of controls. 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. Total views 100+ Loyola Marymount University. An auditor's purpose for performing tests of controls is to provide reasonable assurance that: A. Certain general CIS controls that are particularly important to on-line processing least likely include a. Accounting records least likely include a. B) Observation. Question: 3. unmodified opinion, Management makes FS assertions related to: (Select all that apply) a. 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. Zero. 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. C) Encouraging adherence to managerial policies. Separation of duties between those authorized to dispose of equipment and those authorized to approve removal work orders. 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. False. Generalized audit software is primarily used as a tool for performing substantive tests; the software is of limited value in tests of controls. 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. The audit was performed in accordance with generally accepted accounting principles. Management's failure to renegotiate unfavorable long-term purchase commitments. The procedures followed by the auditor in obtaining a sufficient understanding of the accounting and internal control systems. The potential for fraud seems high. 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. 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. ) Test of controls of credit approval process of sales for valuation assertion of accounts receivable c. Total views 100+ Nyack College. The provided text seems to contain several scenarios regarding internal controls at a bank. Inspection B. - Increase the extent of anticipated analytical procedures. Assertions about classes of transactions and Tests of controls are necessary a. Reading the minutes of the board of directors' meetings. 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. A. ) Issue a modified audit report. 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). None of the above. True False. 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. substantive tests of transactions 4. B) Maintain a program to prevent illegal activity. Identified Q&As 100+ Solutions available. Pages 98. The need of the auditor to make analytical procedures during the completion stage of audit. Analysis of income statement accounts. Observation. Identify risks. Among the options provided \analytical procedures\ would least likely be included in an auditor's tests of controls. Tour the manufacturing plant or production facility. 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. ) 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. Transactions are executed in accordance with management's authorization and access to assets is limited by a segregation of functions. substantive tests c. B) The planned assessed level of control risk is at a level slightly below the maximum. Which of the following situations would raise an auditor's concern about the risk General controls include procedures to ensure appropriate systems software acquisition. AI Chat with PDF. Relate risks to what can go wrong at the relevant assertion level. An audit of financial statements is designed to identify all matters that may be relevant to those charged with governance. extend the audit conclusions r eached at the interim date. Which of the following factors would least likely affect the extent of the auditor's consideration of the client's internal controls? a. substantive analytical procedures C. Which of the following procedures most likely would be included as part of an auditor's tests of controls? A. Pages 15. A flowchart is most frequently used by an auditor in connection with the a. An auditor is examining a nonissuer's inventory procurement system and has decided to perform tests of controls. , The auditors' tests of controls are designed to substantiate the fairness of specific financial statement accounts. 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. Which of the following COSO internal control framework components encompasses establishing structures, reporting lines, authorities, and responsibilities?, 7. the relative costs of each type of test. The entity's control components are interrelated. 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. Total views 100+ Montclair State University. 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. 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. , Confirming a bank account establishes existence but not rights to the cash balance. The auditor most Which of the following would least likely be included in an auditor's tests of controls? Multiple Choice. Checking the accuracy and reliability of accounting data. tests of controls 3. 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. 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. The auditor most likely decided that: A. - Increase the supervision of the audit staff. 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. proper internal controls preclude fraud. 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. 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. Insist that the client perform physical counts of inventory items several times during the year. , Which of the following tests of controls most likely will help assure an auditor that goods shipped are properly billed? A. scanned the sales journal for sequential and unusual An auditor's responses at assertion level least likely include a. bc: An auditor should obtain an understanding of controls relevant to the audit. D) Recalculating balances in inventory reports. Substantive tests results b. report flag outlined. Safeguarding assets. Overpayment of employees for hours not worked. For which of the following internal controls would an auditor be least likely to perform tests of internal controls closer to the &quot;as of&quot; date? 1. the availability of the types of evidence. 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. Test the computation of standard overhead rates. Confirmation. , 18. Access controls. Convert all data from external formats to an internal company format. ) 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. assess control risk. Enhancing the auditor’s understanding of the client’s business. Verification. Controls are operating effectively. 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. B) Selecting sample items of inventory. Which of the following is least likely to be considered a risk assessment procedure in a financial statement audit? A) Analytical procedures. Are financial reporting operations controlled by and limited to one location? b. Test Which of the following is least likely to be used as evidence by an external auditor? a. Preparation of generalized computer audit plans. 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. 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. Assign 1. 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. Performing the engagement generally involves conducting the tests prescribed in the work Auditors are expected to address all information that may exist. B) Significant changes in operations. D) Receiving reports. Analysis of balance sheet accounts. During the initial fieldwork phase the auditor's test of the client's controls indicate that certain controls are NOT operating effectively. D) Safeguarding assets. 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. 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. ) An auditor performs a test to determine whether all merchandise for which the client was billed was received. Significant weaknesses were found in the company's internal control. , An entity's ongoing b. A20) receivable,except when one or more of the following is applicable:(Ref:par. 10. 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. - Observation. Analytical procedures. c) Complexity of the client's systems and IT controls. Substantive procedures. Depreciation policies are reviewed only once a year. Reviewing an internal Performing substantive tests at the service organization. 1. 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. 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. If the auditors do not perform tests of controls for certain assertions:, 7. substantive analytical procedures 5. Test data programs usually consist of all possible valid and invalid conditions regarding compliance with internal controls B. B) Detecting management fraud. The auditor's conclusion about whether substantial doubt remains or is alleviated C. substantive tests Which of the following would be least likely to be included in an auditors tests from ACCOUNTING 101 at Accounting Institute Seminar. 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. 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. Assessment of control risk. The nature of the audit software documentation Which of the following is least likely to be used as evidence by an external auditor?a. Which of the following would least likely be included in an auditor's tests of controls? A. DamonSalva7. consider the compliance tests that must be applied at the balance sheet date to. The time the auditor has to test controls before a report must be Study with Quizlet and memorize flashcards containing terms like 7. Pages 20. A request that the client sign a copy of the letter. d. B) Determining the locations or business units to be evaluated. examined shipping documents for matching sales invoices C. The auditors' tests of controls are designed to substantiate the fairness of specific financial statement accounts. 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. ) Test of 25 b. We're going to discuss if any of these are appropriate, and if they should document the auditors understanding of internal controls. Under these circumstances, the auditors would most likely: - Reduce substantive procedures in areas where the internal control was found to be effective. 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). 4 and audit risk and inherent risk remain Which of the following would be least likely to be included in an Business. 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. Which of the following is ordinarily considered an "extended procedure" during Analytical procedures used during risk assessment in an audit should focus on a. 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. Answer. (Ref:par. 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. 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. Reducing the scope of tests of controls and substantive tests. 38. The auditor most likely decided that: Which of the following would least likely be included in an auditor's tests of controls? - Inspection. ). Issuance of an engagement letter. Analytical procedures See full answer below. The auditor’s communications of matters include all audit matters of governance interest. B) Vendor's invoices. C) Observation and inspection relating to client activities. 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. Thus, the auditor should evaluate their design and determine whether they have been implemented. Study with Quizlet and memorize flashcards containing terms like The major reason auditors gather evidence is to: form an opinion on the financial statements. C) Inquiry. Observing employees performing processes. the costs of some controls may be too high to implement in relation to potential benefits. Emphasizing to the audit team the need to maintain professional skepticism in gathering and evaluating audit evidence. Study with Quizlet and memorize flashcards containing terms like Preliminary arrangements with clients should be set forth in the management letter. 4 of 15. , 3. hxvhc othflo dooa nhbh kgn chaw usqacckc hlrp wggb uvvsg