1 - The most appropriate procedure an auditor can use toensure integrity of the sales and collection cycle isto:
a) Confirm accounts receivables balances.
b)Ensure the bank reconciliations are preparedby one who also handles sales returns so missing items can beaccounted for timely.
c)Recalculate the sales list price of allproducts in the computer files that are accessed by salepersonnel.
2 - When performing audit procedures, which of thefollow must be set prior to testing a sample?
a)Achieved upper precision limit
b) Computed error rate
c) Tolerable error rate
3 - When auditing the inventory cycle the auditor shoulddo all of the following EXCEPT:
a)Adjust the balance in the inventory accountto reflect the perpetual inventory counts
b)Assess the value of obsolete or damagedinventory
c)Review the procedures for the count ofphysical inventory.
4 - Tests of controls for the acquisition and paymentcycle are usually done by:
a)Inquires and documentation of management'srepresentation.
b)Recalculating sales tax amounts
c)Sending out confirmations for amounts under$10,000
5 - Cash is the most desirable asset for people tomisappropriate, when determining risk as part of the audit process,cash would have a higher:
a) Control risk
b)Detection risk
c) Inherent risk
6 - When an auditor looks at a report with over 500purchases and decides to review all of the purchase over $1,000,000this is an example of what type of sampling:
a)Judgmental sampling
b)Statistical sampling
c)This is not sampling
7 - Upon review of your audit findings your discovercash receipts from sales on account have been misappropriate. Whichof the following internal controls may have preventedthis:
a)Ensuring the same person that receives thepayments from customers does not enter transactions into thejournal and post to the ledger
b) Do a background check on all accountspayable personnel before they are hired
c)Verify that the person who receives thepayments does not also write the checks
8 - Upon review of your audit findings you not weakinternal control system that allows a department supervisor to"clock in" for a fictitious employee and then approve theemployee's time card at the end of the pay period. This fraud wouldbe detected if other controls were in place, such as having anindependent party:
a)Compare the date of the recorded check in thepayroll journal with the date on the canceled checks and timecards
b)Distribute paychecks
c)Recompute hours worked from time cards
9 - Different professional standards apply to differenttypes of services offered by a CPA. Assurance services performed bya CPA would include:
a)Audits of financial statements
b)Bookkeeping and accounting system consultingservices
c)Tax service
10 - A CPA may perform all of the following services fordifferent clients EXCEPT:
a)Audits
b)Legal advice relating to accounting ethicsviolations
c)Tax preparation
11 - If an auditor discovers material misstatement afterthe audit report is issued the auditor's first step should benotify
a)The audit firm's legal council
b)The audit committee of the client
c) The client
1 - The most appropriate procedure an auditor can use toensure integrity of the sales and collection cycle isto:
a) Confirm accounts receivables balances.
b)Ensure the bank reconciliations are preparedby one who also handles sales returns so missing items can beaccounted for timely.
c)Recalculate the sales list price of allproducts in the computer files that are accessed by salepersonnel.
2 - When performing audit procedures, which of thefollow must be set prior to testing a sample?
a)Achieved upper precision limit
b) Computed error rate
c) Tolerable error rate
3 - When auditing the inventory cycle the auditor shoulddo all of the following EXCEPT:
a)Adjust the balance in the inventory accountto reflect the perpetual inventory counts
b)Assess the value of obsolete or damagedinventory
c)Review the procedures for the count ofphysical inventory.
4 - Tests of controls for the acquisition and paymentcycle are usually done by:
a)Inquires and documentation of management'srepresentation.
b)Recalculating sales tax amounts
c)Sending out confirmations for amounts under$10,000
5 - Cash is the most desirable asset for people tomisappropriate, when determining risk as part of the audit process,cash would have a higher:
a) Control risk
b)Detection risk
c) Inherent risk
6 - When an auditor looks at a report with over 500purchases and decides to review all of the purchase over $1,000,000this is an example of what type of sampling:
a)Judgmental sampling
b)Statistical sampling
c)This is not sampling
7 - Upon review of your audit findings your discovercash receipts from sales on account have been misappropriate. Whichof the following internal controls may have preventedthis:
a)Ensuring the same person that receives thepayments from customers does not enter transactions into thejournal and post to the ledger
b) Do a background check on all accountspayable personnel before they are hired
c)Verify that the person who receives thepayments does not also write the checks
8 - Upon review of your audit findings you not weakinternal control system that allows a department supervisor to"clock in" for a fictitious employee and then approve theemployee's time card at the end of the pay period. This fraud wouldbe detected if other controls were in place, such as having anindependent party:
a)Compare the date of the recorded check in thepayroll journal with the date on the canceled checks and timecards
b)Distribute paychecks
c)Recompute hours worked from time cards
9 - Different professional standards apply to differenttypes of services offered by a CPA. Assurance services performed bya CPA would include:
a)Audits of financial statements
b)Bookkeeping and accounting system consultingservices
c)Tax service
10 - A CPA may perform all of the following services fordifferent clients EXCEPT:
a)Audits
b)Legal advice relating to accounting ethicsviolations
c)Tax preparation
11 - If an auditor discovers material misstatement afterthe audit report is issued the auditor's first step should benotify
a)The audit firm's legal council
b)The audit committee of the client
c) The client
