Which of the following would least likely be included in an auditors tests of controls. Which of the following controls would most likely allow for a reduction in the scope of the auditor’s tests of depreciation expense? a. Recurring operating losses that may indicate going concern problems. Describing an exchange of real estate for similar property in a non-monetary related party Study with Quizlet and memorize flashcards containing terms like Which of the following controls will most likely justify a reduced assessed level of control risk for the existence assertion for equipment? 1. b) Extent of the client's participation in electronic commerce. Under which of the following conditions do GAAS require tests of controls be performed by an auditor? a. Which of the following would not be a valid reason for choosing to omit such tests? a. B) Issuing an audit report on the financial statements. C) The risk of assessing control risk too low is less than the expected deviation rate. An increase in the assessed level of control risk is justified for certain financial statement assertions. Encouraging adherence to managerial policies. b. Study with Quizlet and memorize flashcards containing terms like Which of the following statements would be least likely to be included in an audit engagement letter? The fees for our services will be at our regular per diem rates plus out-of-pocket expenses. An auditor is examining a nonissuer's inventory procurement system and has decided to perform tests of controls. Nov 15, 2007 · Some types of tests, by their nature, produce greater evidence of the effectiveness of controls than other tests. Which of the following would be least likely to be regarded as a test of a control? and more. additional tests likely will be performed in the remaining period. Periodic comparison of removal work orders to authorizing documentation. C) Omitting tests of controls for several major accounts. Material misstatements may exist in the financial statements c Study with Quizlet and memorize flashcards containing terms like Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee?, In assessing the objectivity of a client's internal auditors, the CPA would be most likely to consider internal auditor's:, In a financial statement audit performed following AICPA When an auditor tests the internal controls of a computerized accounting system, which of the following is true of the test data approach? A. Counting variations in levels of performance. Safeguarding assets. 88. Incorporate additional elements of unpredictability in the selection of audit procedures. The auditor most likely decided that: A. , 2. Checking the accuracy and reliability of accounting data. D Which of the following would least likely be included in an auditor's tests of controls?Multiple ChoiceObservation. the relative costs of each type of test. Study with Quizlet and memorize flashcards containing terms like An auditor's primary consideration regarding an entity's internal controls is whether they, Which of the following procedures most likely would be included as part of an auditor's tests of controls?, After obtaining an understanding of an entity's internal control system, an auditor may set control risk at high for some Study with Quizlet and memorize flashcards containing terms like Adequate planning and design of an audit is necessary for an auditor to restrict which type of audit risk? A) Control Risk. The auditor needs to determine the effect of the CIS environment on the assessment of overall risk and of risk at the account balance and class of transactions level. 2) Which of the following would be least likely to be included in an auditor's tests of controls? a) Documentation b) Observation c) Inquiry d) Confirmation 3) The two phases of the auditor's involvement with internal control are sometimes called "understanding and assessment " and "tests of controls " . Insist that the client perform physical counts of inventory items several times during the year. No. - Increase the supervision of the audit staff. Tests of controls are most likely to be performed when: - The client's control environment appears weak. B. B) Detection Risk. - Controls seem weak and must be properly documented. disclaimer opinion b. When to Test Controls? When the auditors perform test of controls depends on the client and the auditors’ understanding of the client. , An entity's ongoing monitoring activities often include: a. c. For each of the following characteristics indicate the auditors' responsibility under generally accepted auditing standards and the procedures used to meet that responsibility. This is a necessary procedure because the predecessor auditor may be able to provide the successor with information that will assist the successor in determining whether _____. Obtaining the user organization's representation regarding the effectiveness of the service organization's controls. Internal auditors periodically select equipment items in the fixed assets master file and locate the related equipment on company premises. Which of the following COSO internal control framework components encompasses establishing structures, reporting lines, authorities, and responsibilities?, 7. Which of the following is most likely to be included in an auditor’s inquiry of Which of the following is not an example of a likely adjustment in the auditors' overall audit approach when significant risk factors are found to exist? - Use less predictable audit procedures. If the assessed level of control risk is high, an auditor would probably A. D) Analytical procedures. - The auditor plans to rely on the controls. Study with Quizlet and memorize flashcards containing terms like The ultimate purpose of understanding the entity and its environment and assessing the risks of material misstatement is to contribute to the auditor's assessment of the risk that a. Which of the following is least likely to be included in an auditor's inquiry of management while obtaining information to identify the risks of material misstatement due to fraud? a. - Increase the detection risk of the audit. Assign more experienced staff. Which of the following is a risk factor for misappropriation of assets? a) Generous performance-based compensation systems. Performing substantive tests at the service organization. The auditors will be able to complete substantive procedures prior to year-end. - Use audit staff with more experience and specialized skills. The need of the auditor to make analytical procedures during the completion stage of audit. Sufficient appropriate audit evidence to support the assertions is likely to be available. Statement that management is responsible for the financial a. , Which of the following tests of controls most likely will help assure an auditor that goods shipped are properly billed? A. It is an audit procedure primarily inclined to evaluate the operating effectiveness of internal controls established by the management which are used to detect, prevent, and correct material errors and misstatements. Separation of duties between those authorized to dispose of equipment and those authorized to approve removal work orders. b) Examine shipping documents for matching sales invoices. all of the above. Study with Quizlet and memorize flashcards containing terms like Which of the following is least likely to be included in the auditor's engagement letter? 1. The following tests that the auditor might perform are presented in order of the evidence that they ordinarily would produce, from least to most: inquiry, observation, inspection of relevant documentation, and re-performance of a 答案解析： B is corrent because tests of controls provide reasonable assurance that prescribed control procedures are being followed. absolute assurance c. Analytical procedures. Which of the following would be least likely to be included in an auditor’s tests of controls? a. Additional evidence to support a reduction in the assessed level of control risk is not available. Study with Quizlet and memorize flashcards containing terms like Periodic or cycle counts of selected inventory items are made at various times during the year rather than via a single inventory count at year-end. Which of the following controls will most likely justify a reduced assessed level of control risk for the completeness assertion for notes payable? (1) The accounting staff reviews board of director minutes for any indication of any transactions involving outstanding debt to make sure all borrowings are included in the B. Which of the following tests of controls most likely would help assure an auditor that goods shipped are properly billed? a) Scan the sales journal for sequential and unusual entries. Disclosing loans to related parties at interest rates significantly below prevailing market rates. Overview of the objectives of the engagement 3. The auditor most likely decided that A. Obtaining and reading a Type 1 report, if available. Withdrawals from Federal Bank of more than $5 million must include a manager's signature. Study with Quizlet and memorize flashcards containing terms like Which of the following matters is generally included in an auditor's engagement letter? A) The financial accounting framework that will be applied B) Factors to be considered in establishing preliminary judgments about materriality C) Management's liability for all illegal acts committed by its employees D) The auditor's Study with Quizlet and memorize flashcards containing terms like 1. Observing employees performing processes. Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee? A. For which of the following internal controls would an auditor be least likely to perform tests of internal controls closer to the "as of" date? A. C) Inquiry. Maintain a program to prevent illegal activity. a written assertion d. After obtaining an understanding of internal control and arriving at a preliminary assessed level of control risk, an auditor decided to perform tests of controls. More emphasis on tests of controls than substantive tests is warranted. D) Tests of controls. Analytical procedures. Description of the level of assurance obtained when conducting the audit 2. Mar 25, 2024 · Analytical procedures are less likely to be included in an auditor's tests of controls as they are used to identify risks of material misstatement rather than to test the effectiveness of internal controls. The two phases of the auditor’s involvement with internal control are sometimes called “understanding and assessment” and “tests of controls”. Store duplicate copies of Study with Quizlet and memorize flashcards containing terms like 22-16a. Periodic If auditors conduct substantive procedures as of 10/31 for an entity with a 12/31 year-end: Multiple Choice additional tests are seldom conducted for the remaining period. Among the options provided \analytical procedures\ would least likely be included in an auditor's tests of controls. , An auditor's communication with the board of directors most likely should Include details of audit procedures. Request that the client schedule the physical inventory count at the end of the year. May 29, 2024 · the following would be least likely to be included in an auditor's tests of controls? A) Inspection. The auditor hopes to reduce the amount of work to be Study with Quizlet and memorize flashcards containing terms like 7. B) Tests confirming receivables. Increase the scope of auditor procedures. When considering a client's internal control, the auditors focus on its various characteristics. Detecting management fraud. In the tests of controls phase, the auditor attempts to obtain: Study with Quizlet and memorize flashcards containing terms like Which of the following would be least likely to be considered an objective of internal control? Multiple Choice A. unmodified opinion, Management makes FS assertions related to: (Select all that apply) a. Confirmation would be least likely to be included in … Study with Quizlet and memorize flashcards containing terms like Which of the following is least likely to be considered an appropriate response relating to risks the auditors identify at the financial statement level? A. Which of the following would least likely be included in an auditor's test of a. Which of the following questions would an auditor least likely include on an internal control questionnaire concerning the initiation and execution of equipment After the preliminary phase of the review of a client’s EDP controls, an auditor may decide not to perform tests of controls (compliance tests) related to the control procedures within the EDP portion of the client’s internal control structure. , A primary objective of procedures performed to obtain Study with Quizlet and memorize flashcards containing terms like Several factors influence the auditor's choice of the types of tests to select, including A. . Study with Quizlet and memorize flashcards containing terms like Which of the following would be LEAST likely to be considered an objective of internal control?, An entity's ongoing monitoring activities often include, A primary objective of procedures performed to obtain an understanding of internal control is to provide the auditors with and more. B) Observation. Observation. the availability of the types of evidence. Review and approval of the periodic property depreciation entry by a supervisor who does not actively participate in its preparation. C) Observation and inspection relating to client activities. Question: 3. - The auditor wishes to assess control risk at the maximum. Which of the following advantages is least likely to occur as a result of early appointment of the auditors? The auditors will be able to plan the audit work so that it may be done expeditiously. Department heads are asked to provide C. B) Inquiries of management. Are financial reporting operations controlled by and limited to one location? b. Inquiry. D. Which of the following is necessary if the auditor plans to observe inventory at interim dates?, When auditing merchandise inventory at year-end, the auditor performs a purchase Study with Quizlet and memorize flashcards containing terms like An auditor most likely modifies the opinion if the entity's financial statements include a note on related party transactions: A. presentation and disclosure b. The entity's control components are interrelated. , Which of the following audit tests is usually the least costly to perform? A 88. Significant weaknesses were found in the company's internal control. Which of the following is a likely approach for testing the segregation of duties? A. classes of transactions and events c 3. Inspection. additional control tests are required in the remaining period. If the auditors do not perform tests of controls for certain assertions:, 7. Which of the following procedures would an entity most likely include in its disaster recovery plan? A. Study with Quizlet and memorize flashcards containing terms like Which of the following would be least likely to be considered an objective of internal control? a. Documentation. Test data are coded to a dummy subsidiary so they can be extracted from the system under actual operating conditions C. , B&M auditors have been accepted as the auditors of World Wide Widgets (3W). Study with Quizlet and memorize flashcards containing terms like Which of the following statements is false?, The likelihood of an event is "more than remote" when it is "reasonably possible. the effectiveness of the internal controls. Details about the preliminary audit strategy 4. Confirmation is used primarily to substantiate the existence of an account balance and, therefore, is considered a substantive test. We will not disclose any advice The concept of reasonable assurance in the context of an entity's internal controls recognizes that: Multiple Choice proper internal controls guarantee that material misstatements will not occur. The independent auditors' objective is to express an opinion on the client's financial statements. Test data programs usually consist of all possible valid and invalid conditions regarding compliance with internal controls B. ", For which of the following internal controls would an auditor be least likely to perform tests of internal controls closer to the "as of" date? and more. c) Complexity of the client's systems and IT controls. Personal inquiry and confirmation. Apply gross Study with Quizlet and memorize flashcards containing terms like 1. Does it have knowledge of fraud or suspect fraud? c. Inquiry. 2. Study with Quizlet and memorize flashcards containing terms like Audit risk is the risk that FS will contain a material departure from GAAP and the auditor will issue: a. B) The planned assessed level of control risk is at a level slightly below the maximum. Convert all data from external formats to an internal company format. D) Inherent Risk. Increase the extent of tests of controls for the inventory cycle. Which of the following is least likely to be included in the auditor's engagement letter? (1) Details about the preliminary audit strategy (2) Overview of the objectives of the engagement (3) Statement that management is responsible for the financial statements (4) Description of the level of assurance obtained when conducting the audit Consider the procedures typically used in an auditor's test of controls, such as observation, enquiry, and inspection, to identify which procedure is less related to testing control effectiveness. However, internal auditors may achieve independence from departments they evaluate by reporting to a senior officer or the board of directors. Design and perform appropriate tests of controls and substantive procedures. Which of the following is least likely when an auditor performs an integrated audit of a public company's financial statements? A) Issuing an audit report on internal control over financial reporting. C. Variances between authorized equipment expenditures and actual costs are to be immediately reported to management. In which of the following circumstances is it least likely that tests of controls will be performed? A) The expected deviation rate exceeds the tolerable deviation rate. The use of serial numbers Study with Quizlet and memorize flashcards containing terms like The effectiveness of controls is not generally tested by:, A situation in which the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect material misstatements on a timely basis is referred to as a:, The report of a service Which of the following is least likely to be considered by the auditors considering engagement of an information technology specialist on an audit? a) Number of financial institutions at which the client has accounts. Depreciation policies are reviewed only once a year. C) Sufficiency Risk. Management's failure to renegotiate unfavorable long-term purchase commitments. the costs of some controls may be too high to implement in relation to potential benefits. After obtaining an understanding of internal control and assessing the risks of material misstatement in a financial statement audit, an auditor decided to perform tests of controls. auditors may fail Test of Controls (TOC) is commonly performed the the control risk assessed by the auditor is low. b) Management preoccupation with Which of the following would be least likely to be considered an objective of internal control? detecting management fraud An entity's ongoing monitoring activities often include Study with Quizlet and memorize flashcards containing terms like Which of the following procedures is most likely to prevent the improper disposition of equipment? A. , 18. d. Confirmation Which of the following audit tests would be regarded as a test of a control? A) Tests of the specific items making up the balance in a given general ledger account. Test Study with Quizlet and memorize flashcards containing terms like In planning and performing an audit, auditors are concerned about risk factors for two distinct types of fraud: fraudulent financial reporting and misappropriation of assets. Evidence of a lack of Which of the following is least likely to be considered a risk assessment procedure in a financial statement audit? A) Analytical procedures. What are B&M's responsibilities with regard to contacting 3W's 25 b. We will provide you with a list of schedules and information needed by our staff during the audit. low level of assurance b. the entity's controls likely are ineffective. Which of the following elements is most likely to be a component of a direct reporting assurance engagement? a. Tests of controls may fail to identify procedures relevant to assertions b. Develop an auxiliary power supply to provide uninterrupted electricity. Your solution’s ready to go! Enhanced with AI, our expert help has broken down your problem into an easy-to-learn solution you can count on. auditor Study with Quizlet and memorize flashcards containing terms like 1. proper internal controls preclude fraud. modified opinion d. When approached to perform an audit first auditor should make inquiries of the predecessor auditor. Study with Quizlet and memorize flashcards containing terms like Which of the following is least likely to be included in an auditor's inquiry of management while obtaining information to identify the risks of material misstatement due to fraud?, According to the professional standards, auditors may document the understanding established with an audit client through a(n), Which of the They can do this in many ways, discussed below in procedures to obtain test of controls. adverse opinion c. Based on these tests, auditors can either expand their sample size or move directly to substantive testing. swfmplt ogpwv hrqnq bedu uxxddq gujml sgryo bxmkrfh tpbzll ggdgoe