Test Assurance Quiz

When determining a sample size for TOC, there is a number of factors which an auditor should take into account. If there is an increase in the number of invoices in the population, select whether the above factor would cause the sample size to increase, decrease or to have negligible effect

• Increase

• Decrease

• Negligible effect

Which THREE of the following statement are correct? When using analytical procedures, assurance providers should:

• consider the source of the information and whether it is reliable

• consider the knowledge gained during previous assurance engagements

• not use information that has been internally generated at the entity

• consider whether the information they might require will available

There is an opinion as follows: 'Audit software makes use of the client’s specialized software to run audit procedures'. Is it true or false in respect of computer-assisted audit techniques?

• True

• False

Which ONE of the following statements is incorrect in respect of reliability of audit evidence?

• An original copy of a lease agreement is more reliable than a photocopy

• A sales invoices is more reliable than a purchase invoice

• A bank statement is more reliable than the cash at bank nominal ledger account

Which TWO of the following statements are incorrect?

• Analytical procedures is compulsory at the planning stage of an audit

• Inspection of assets confirms rights and obligations

• Inspection of a purchase invoice confirms existence

• Inquiry of third parties gives better evidence than inquiries of entity insiders

Which TWO of the following procedures describe tests for understatement?

• Selecting a sample of items of vehicles from the asset register and physically verifying their existence

• Selecting a sample of sales invoices and tracing these to a matching dispatch record

• Selecting a sample of dispatch records and tracing these to a matching sales invoice and entry in the sales account

• Selecting a sample of items of equipment physically verified by the assurance provider and tracing these to an entry in the asset register

In which THREE of the following situations could audit software appropriately be used?

• When extracting all invoices to specific customers

• When testing controls over invoice processing

• When checking calculations on a selection of invoices

• When extracting a sample of invoices over a certain value

Which TWO of the following procedures NOT describe tests for understatement?

• Selecting a sample of items of equipment physically verified by the assurance provider and tracing these to an entry in the asset register

• Selecting a sample of items of vehicles from the asset register and physically verifying their existence

• Selecting a sample of sales invoices and tracing these to a matching dispatch record

• Selecting a sample of dispatch records and tracing these to a matching sales invoice and entry in the sales account

For the following description: “Mary is checking whether purchase invoices have been authorized for payment. She has selected all the December purchase invoices as her sample and has reviewed them for an authorization signature”. Which ONE of the below selections is described?

• Block selection

• Monetary unit sampling

• Systematic selection

Which ONE of the following is purpose of a written representation letter from management?

• Confirmation that all representations made by management in the course of the audit

• Confirmation that management understands the terms of the engagement

• Confirmation that management has received the signed audit repor

• Confirmation that management has recorded and reflected all transactions in the financial statements