Which of the following would least likely be included in an auditors tests of controls

Which of the following would least likely be included in an auditors tests of controls. An increase in the assessed level of control risk is justified for certain financial statement assertions. Which of the following is a likely approach for testing the segregation of duties? A. C) Sufficiency Risk. , 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. 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. Description of the level of assurance obtained when conducting the audit 2. Inspection. B. all of the above. C) The risk of assessing control risk too low is less than the expected deviation rate. Confirmation is used primarily to substantiate the existence of an account balance and, therefore, is considered a substantive test. . Inquiry. D. Depreciation policies are reviewed only once a year. , An auditor's communication with the board of directors most likely should Include details of audit procedures. Increase the extent of tests of controls for the inventory cycle. 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. Store duplicate copies of Study with Quizlet and memorize flashcards containing terms like 22-16a. 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. Counting variations in levels of performance. May 29, 2024 · the following would be least likely to be included in an auditor's tests of controls? A) Inspection. B) Tests confirming receivables. Checking the accuracy and reliability of accounting data. absolute assurance c. Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee? A. Apply gross Study with Quizlet and memorize flashcards containing terms like 1. 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. Convert all data from external formats to an internal company format. Question: 3. Tests of controls may fail to identify procedures relevant to assertions b. 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. auditors may fail Test of Controls (TOC) is commonly performed the the control risk assessed by the auditor is low. The independent auditors' objective is to express an opinion on the client's financial statements. adverse opinion c. Significant weaknesses were found in the company's internal control. b) Examine shipping documents for matching sales invoices. Increase the scope of auditor procedures. 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. D) Inherent Risk. B) Inquiries of management. a written assertion d. D) Analytical procedures. Which of the following would not be a valid reason for choosing to omit such tests? a. low level of assurance b. 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. 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. Tests of controls are most likely to be performed when: - The client's control environment appears weak. Withdrawals from Federal Bank of more than $5 million must include a manager's signature. B) Detection Risk. We will provide you with a list of schedules and information needed by our staff during the audit. 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. Safeguarding assets. What are B&M's responsibilities with regard to contacting 3W's 25 b. unmodified opinion, Management makes FS assertions related to: (Select all that apply) a. 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. Which of the following procedures would an entity most likely include in its disaster recovery plan? A. D) Tests of controls. Observation. Design and perform appropriate tests of controls and substantive procedures. the costs of some controls may be too high to implement in relation to potential benefits. the availability of the types of evidence. Maintain a program to prevent illegal activity. 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. Performing substantive tests at the service organization. Which of the following COSO internal control framework components encompasses establishing structures, reporting lines, authorities, and responsibilities?, 7. Details about the preliminary audit strategy 4. Disclosing loans to related parties at interest rates significantly below prevailing market rates. , Which of the following tests of controls most likely will help assure an auditor that goods shipped are properly billed? 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. 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. The auditors will be able to complete substantive procedures prior to year-end. 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. d. The entity's control components are interrelated. Detecting management fraud. C. 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. , Which of the following audit tests is usually the least costly to perform? A 88. 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. Overview of the objectives of the engagement 3. Are financial reporting operations controlled by and limited to one location? b. c. More emphasis on tests of controls than substantive tests is warranted. Additional evidence to support a reduction in the assessed level of control risk is not available. 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. additional control tests are required in the remaining period. - Use audit staff with more experience and specialized skills. 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. Which of the following elements is most likely to be a component of a direct reporting assurance engagement? a. Among the options provided \analytical procedures\ would least likely be included in an auditor's tests of controls. C) Observation and inspection relating to client activities. additional tests likely will be performed in the remaining period. - The auditor plans to rely on the controls. Inquiry. The two phases of the auditor’s involvement with internal control are sometimes called “understanding and assessment” and “tests of controls”. For each of the following characteristics indicate the auditors' responsibility under generally accepted auditing standards and the procedures used to meet that responsibility. Personal inquiry and confirmation. , An entity's ongoing monitoring activities often include: a. Which of the following would be least likely to be included in an auditor’s tests of controls? a. Management's failure to renegotiate unfavorable long-term purchase commitments. Documentation. 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. Statement that management is responsible for the financial a. 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. Which of the following is a risk factor for misappropriation of assets? a) Generous performance-based compensation systems. 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. Department heads are asked to provide C. 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. 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. Test data are coded to a dummy subsidiary so they can be extracted from the system under actual operating conditions C. 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. B) Issuing an audit report on the financial statements. Sufficient appropriate audit evidence to support the assertions is likely to be available. 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. If the auditors do not perform tests of controls for certain assertions:, 7. - Increase the supervision of the audit staff. No. presentation and disclosure b. Observing employees performing processes. 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. 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. However, internal auditors may achieve independence from departments they evaluate by reporting to a senior officer or the board of directors. 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. 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. , 18. - Controls seem weak and must be properly documented. - Increase the detection risk of the audit. 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. The auditor most likely decided that A. Periodic comparison of removal work orders to authorizing documentation. 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. 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. 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 auditor wishes to assess control risk at the maximum. Does it have knowledge of fraud or suspect fraud? c. 2. the relative costs of each type of test. disclaimer opinion 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. proper internal controls preclude fraud. the effectiveness of the internal controls. Based on these tests, auditors can either expand their sample size or move directly to substantive testing. classes of transactions and events c 3. Which of the following controls would most likely allow for a reduction in the scope of the auditor’s tests of depreciation expense? a. Analytical procedures. B) Observation. The auditor hopes to reduce the amount of work to be Study with Quizlet and memorize flashcards containing terms like 7. Variances between authorized equipment expenditures and actual costs are to be immediately reported to management. When to Test Controls? When the auditors perform test of controls depends on the client and the auditors’ understanding of the client. Internal auditors periodically select equipment items in the fixed assets master file and locate the related equipment on company premises. When considering a client's internal control, the auditors focus on its various characteristics. Which of the following would be least likely to be regarded as a test of a control? and more. Encouraging adherence to managerial policies. D Which of the following would least likely be included in an auditor's tests of controls?Multiple ChoiceObservation. Request that the client schedule the physical inventory count at the end of the year. 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. Analytical procedures. An auditor is examining a nonissuer's inventory procurement system and has decided to perform tests of controls. b. 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. 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. B) The planned assessed level of control risk is at a level slightly below the maximum. b) Extent of the client's participation in electronic commerce. Review and approval of the periodic property depreciation entry by a supervisor who does not actively participate in its preparation. Incorporate additional elements of unpredictability in the selection of audit procedures. Recurring operating losses that may indicate going concern problems. Assign more experienced staff. The auditor most likely decided that: A. Separation of duties between those authorized to dispose of equipment and those authorized to approve removal work orders. , B&M auditors have been accepted as the auditors of World Wide Widgets (3W). When approached to perform an audit first auditor should make inquiries of the predecessor auditor. Develop an auxiliary power supply to provide uninterrupted electricity. Insist that the client perform physical counts of inventory items several times during the year. Under which of the following conditions do GAAS require tests of controls be performed by an auditor? a. , 2. 88. 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 _____. the entity's controls likely are ineffective. auditor Study with Quizlet and memorize flashcards containing terms like 1. Which of the following would least likely be included in an auditor's test of a. modified opinion d. Obtaining the user organization's representation regarding the effectiveness of the service organization's controls. C) Omitting tests of controls for several major accounts. 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 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. Test data programs usually consist of all possible valid and invalid conditions regarding compliance with internal controls B. Obtaining and reading a Type 1 report, if available. If the assessed level of control risk is high, an auditor would probably A. c) Complexity of the client's systems and IT controls. 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. The need of the auditor to make analytical procedures during the completion stage of audit. 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 " . C) Inquiry. 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. 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. raoocqb hmpzqn zmtvhg nmeqj tfmy mbkamozf rndr ovsnbm gmcoiv slvty