Review Quiz

What are the objectives of control?

• A. Prevent misstatements

• B. Detect and correct misstatements

• C. Support the functioning of automated aspects

• D. Maintain electronic audit applications

What are the four phases of an audit?

• Initial planning

• Identify and assess risks

• Design and execute responses to risk

• Conclude and communicate

What is a significant account?

• A. Account that is executed at the highest level of sustainable auditing quality

• B. Account that could contain a material misstatement based upon its size

• C. Account that has relevant IT environment and components within a SCOT

• D. Account that has an identified risk of material misstatement associated with it

What is the primary purpose of performing a walkthrough? Select the correct answer.

• A. To obtain evidence to support our assessment of control risk when relying on controls.

• B. To confirm that our understanding of the significant classes of transactions is as we have documented and to confirm the points where misstatements are most likely to occur.

What type of control is explained as:

The objective of the individual’s review is to determine completeness and accuracy, appropriate accounting recognition and identify potential errors or misstatements, as well as checking that timely, effective performance of other controls over that information occurred?

Select the correct answer.

• A. Automated

• B. Detect and Correct

• C. Prevent

Professional skepticism requires

auditors to possess a(n) ______ mind.

• A. Narrow

• B. Questioning

• C. Distracted

• D. Agreeing

A situation where someone believes they have a favorable or promising combination of circumstances to commit an undetectable fraud is the description of:

• A. Perceived pressure

• B. Perceived opportunity

• C. Management fraud

• D. Rationalization

• E. Employee fraud

When you consider the flow of information in the critical path, what is the correct order of the events? Select the correct answer.

• A. Initiated; Processed; Recorded; Reported.

• B. Reported; Processed; Initiated; Recorded.

• C. Initiated; Recorded; Processed; Reported.

• D. Initiated; Recorded; Reported; Processed.

• E. Significant Class of Transaction

There is a difference between a significant account and a SCOT

• Yes

• No

If the audit team determines that internal controls are unlikely to detect and correct a material misstatement, the effect on the CRA would be

• A.CRA decreases as control risk changes to not rely on controls.

• B. CRA increases as control risk changes to not rely on controls.

• C. CRA increases as the inherent risk increases.

• D. CRA decreases as the inherent risk decreases.

• E. No impact to CRA.