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XX AT.06.09-Evidence-and-Performance-of-Substantive-Testing
XX AT.06.09-Evidence-and-Performance-of-Substantive-Testing
San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]
2. Which of the following factors below has a direct relationship with the quantity of
evidence to be gathered by the auditor during the substantive test phase?
Risk of Material Confidence Control Risk Materiality
Misstatements Level Assessment Threshold
a. Yes Yes No Yes
b. Yes Yes Yes No
c. Yes Yes Yes Yes
d. No Yes No No
6. Which type of audit assertion is defined by the objective – “assets, liabilities, and
equity interests are included in the financial statements at appropriate amounts
and any adjustments are appropriately recorded”?
a. Accuracy
b. Existence
c. Valuation and allocation
d. Rights and obligations
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JABELLAR/AIBAY/AJABINAL/RBERCASIO/JMAGLINAO/ASARMIENTO
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]
8. Anne, associate auditor of LGP and Co. is tasked to identify unsupported sales
transactions included in the sales balance. From which of the following should she
start her testing?
a. Entries in the accounting records
b. Sales Invoices
c. Shipping documents
d. Sales orders
11. Which of the following accounts is most likely tested using test of transactions and
events approach?
a. Cash
b. Purchases
c. Investment in equity securities
d. Accounts Receivable
12. Which of the following is the least effective procedure in verifying the completeness
of data provided to the auditor?
a. Obtaining screenshots of the parameters set in the accounting system prior
to extracting data.
b. Checking numerical totals and reconciling with related account balance in
the general ledger.
c. Comparing transaction totals and volume with prior year data.
d. Obtaining a sample transaction prior to the first record and subsequent to
the last record of the data extracted.
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JABELLAR/AIBAY/AJABINAL/RBERCASIO/JMAGLINAO/ASARMIENTO
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]
13. An auditor assesses the control risk of an audit client at maximum level because
of fraud indicators and management override. Which of the following types of
confirmation is most likely applicable in this situation?
a. Blank positive confirmation
b. Positive confirmation with information already included
c. Negative confirmation
d. All of the above.
14. When the auditor has no reason to believe that recipients of the confirmation
requests will disregard such requests, the auditor uses _________.
a. Positive confirmation
b. Negative confirmation
c. Either A or B.
d. Neither A nor B.
17. Performance of audit procedures at an interim date causes the risk of material
misstatement occurring between the interim date and the end of the year to
a. Decrease
b. Increase
c. Remain the same
d. Become more difficult to ascertain
18. Evidence is usually more persuasive for balance sheet accounts when it is
obtained:
a. Only from transactions occurring on the balance sheet date.
b. As close to the balance sheet as possible.
c. From various times throughout the client’s year.
d. From the time period the transactions in that account were most numerous
during the calendar year.
19. This type of procedure is not required to be performed by the auditor, but may also
serve as a reliable source of audit evidence in certain situations.
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JABELLAR/AIBAY/AJABINAL/RBERCASIO/JMAGLINAO/ASARMIENTO
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]
20. Evidence is usually more persuasive for income statement accounts when it is
obtained:
a. Only from transactions occurring on the balance sheet date.
b. As close to the balance sheet as possible.
c. From various times throughout the client’s year.
d. From the time period the transactions in that account were most numerous
during the calendar year.
21. The auditor’s objective in attending the physical inventory count is most likely to
test
a. The valuation of existing inventory
b. The existence and condition of inventory
c. The ownership and control over inventory
d. The cut-off for year-end inventory transactions
22. When gathering evidence on accounting estimates and fair value measurement,
the auditor’s objective is to test whether the accounting estimates are
a. Supported by past experience
b. Reasonable in the circumstances
c. Similar to competitors and other comparable information
d. Supported by reports from appraisers or experts
23. When performing analytical procedures, the more disaggregated the data used for
establishing the auditor’s expectation is, the __________ reliable the established
expectation becomes.
a. More
b. Less
c. More or less, depending on availability.
d. Cannot be determined.
24. When testing revenue transactions, which of the following type of procedures
is/are likely to cover 100% of the population?
a. Test of details
b. Substantive analytical procedures
c. Both A and B
d. Neither A nor B
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JABELLAR/AIBAY/AJABINAL/RBERCASIO/JMAGLINAO/ASARMIENTO