bonus

The auditor of ABC Co is performing audit procedures to confirm the company's ownership of motor vehicles. Which of the following would provide the most persuasive evidence of this?

• A Physical inspection of the motor vehicles
  

• B Inspection of vehicle registration documents

• C Checking that the motor vehicles are recorded in the non-current asset register
  

• D Review of vehicle insurance documentation

Two types of procedures used in gathering evidence are test of controls and substantive procedures. Select the type of procedure illustrated: Observing an organisation's despatch procedures

• test of controls

• substantive procedures

Julia, an audit junior, has been asked to test the completeness of certain items in the income statement. He has carried out the following test. For the following test, seclect whether that test proves the assertion of completeness or not: Tracing a sample of goods rececived notes to payables ledger and financial statements.

• Proves completeness

• Does not prove completeness

Direct confirmation of trade receivables provides evidence in respect of which TWO of the following assertions?
1 Existence
2 Valuation
3 Rights and obligations
4 Completeness
5 Occurrence

• (2) and (3)

• (1) and (3)

• (1) and (4)

• (2) and (4)

Which TWO of the following are reasons why sales are of verified by testing the internal controls in place over sales?
1 There are usually too many individual transactions to test them individually
2 Sales constitute a high volume of similar transactions which are suitalbe for controls testing
3 Controls over sales in a company are often strong
4 Because there are so many individual transactions, there is a significant risk that sales are misstated

• (2) and (3)

• (1) and (3)

• (1) and (4)

• (2) and (4)

Which TWO of the following procedures are MOST appropriate to confirm the valuation of trade receivables?
1 Review of the receivables ledges
2 Direct confirmations with customers
3 Review of cash paid after date
4 Review of sales invoices

• (2) and (3)

• (3) and (4)

• (1) and (3)

• (2) and (4)

Which two of the following would be classified as substantive procedures?
(1) Tests of control
(2) Walk-through tests
(3) Analytical procedures
(4) Tests of details

• (2) and (3)

• (3) and (4)

• (1) and (3)

• (2) and (4)

Which TWO of the following procedures would provide evidence of rights and obligations of motor vehicles?
1 Vouching a sample of motor vehicles in the asset register to regitration documents
2 Physical inspection of motor vehicles
3 Review of purchase invoices for motor vehicles acquired in the period
4 Confirmation that calculations on the non-current asset schedule are correct in respect of motor vehicles

• (2) and (3)

• (3) and (4)

• (1) and (3)

• (2) and (4)

Which of the following assertions about classes of transactions and events for the period under audit is defined below: 'Amounts and other data relating to recorded transactions and events have been recorded appropriately'

• Completeness

• Existence

• Rights and obligations

• Accuracy

Which of the following NOT should be included in an audit engagement letter?

• Responsibilities of management and the auditors.

• Results of previous audits

• Tests of control