PKF Quiz

Which of the following method of sampling will not be appropriate while using statistical sampling technique

• Using a computerised random number generator or through random number tables
• Systematic selection
• Haphazard selection
• Block selection

Which source of audit evidence would provide the least value in flowcharting an organization's purchasing process?

• An interview with the purchasing supervisor.
• A review of a sample of purchase orders which were completed during the last month.
• A review of the purchasing policies and procedures manual
• A walk-through of the process with a member of the purchasing staff.

Which of the following is false?

• Audit sampling can be applied using either non-statistical or statistical sampling approaches.
• The level of sampling risk that the auditor is willing to accept affects the sample size required
• Example of sampling risk include use of inappropriate audit procedures or misinterpretation of audit evidence and failure to recognise a misstatement.
• All of the above

Substantive Analytical Procedures are generally more applicable to:

• Large volumes of transactions
• Transactions predictable over time.
• Both A and B
• None of A and B

Which of the following is not an analytical procedure?

• Tracing of purchases recurred in the purchase book to purchase invoices.
• Comparing aggregate wages paid to number of employee
• Comparing the actual costs with standard costs
• All of them are analytical procedures

The frequency of the external quality review shall in no case be less than .... years

• 3
• 2
• 5
• 7

Which of the following statements about internal auditors handling frauds are not true?

• An internal auditor is expected to possess skills and knowledge of a person expert in detecting and investigating frauds
• An internal auditor shall have reasonable knowledge of factors that might increase the risk of opportunities for frauds in an entity
• An internal auditor shall exercise reasonable care while carrying out internal audit
• An internal auditor shall exercise professional skepticism while carrying out internal audit

Which of the following is not an element of internal control

• The control environment
• An entity’s risk assessment process
• The safeguarding of assets
• Monitoring of controls

Which of these transactions because of their nature may be indicative of the existence of related parties

• Borrowing or lending on an interest-free basis or at a rate of interest significantly above or below market rates prevailing at the time of the transaction
• Buying/ selling transactions at a price that differs significantly from its appraised value.
• Exchanging property for similar property in a non-monetary transaction
• All of the above

In responding to the identified risks of material misstatement associated with related party relationships and transactions, the internal auditor should not consider the following

• Determine whether underlying circumstances confirm their existence
• Make no request to management to identify all the transactions with the related party
• Reconsider the risk that the other undisclosed related parties or significant related party transactions may exist, and perform additional internal audit procedures as necessary
• Perform appropriate substantive internal audit procedures