CHAPTER 6

1. IT has several significant effects on an entity

2. The use of a computer changes
3. The following are benefits of using IT-based
4. WOTF statements concerning the internet is incorrect
5. In planning the portions of the audit
6. The auditor shall consider the entity’s CIS environment
7. Regardless of the nature of an entity’s information
8. Who is ultimately responsible for the design and implementation
9. Are the following risks greater in CIS than in manual systems
10. WOTF is not a hardware element
11. WOTF computer hardware elements is not associated with data input
12. A hardware element that takes the computer’s
13. Uninterruptible power supplies are used
14. In a computer system, the parts of the operating
15. A characteristics that distinguishes computer processing from manual processing is
16. An affordable yet powerful self-contained
17. A CIS where two or more personal computers are linked
18. A file server in a local area
19. Audit teams members can use the same database and programs
20. A computer information system that allows
21. WOTF statements most likely represents a disadvantage
22. The following are risks specific to IT environments
23. Most personal computers have both a CD-ROM
24. What type of online computer system is characterized by data
25. Misstatements in a batch computer system caused by incorrect
26. WOTF features is least likely to be found in an online
27. WOTF is usually not a factor to consider in designing and implementing
28. Workstations or terminals are an integral
29. Online computer systems use workstations or terminals that are located
30. The “test data approach”
31. WOTF is a primary example of source data automation
32. Express Padala, Inc
33. In a file-oriented approach to data information
34. Refers to the combination of the database
35. Who is the individual responsible for the database
36. Which feature of many database systems
37. WOTF is probably the most significant effect
38. An entity should have a disaster recovery plant
39. WOTF statements concerning computer program
40. Old and new systems operating simultaneously in all locations
41. A collection of data that is shared
42. WOTH computer software is used to create
43. The two important characteristics of a database
44. To protect the integrity of the database, data sharing
45. An auditor who wishes to trace data
46. WOTF is the greatest advantage of database system
47. The following statements relate to a database management system
48. WOTF is an advantage of a database
49. WOTF is usually a benefit of transmitting transactions
50. The internal controls over computer processing
51. CIS application include the following, except
52. The auditor is required to consider how an entity’s general CIS controls
53. The two broad categories of IT controls are general
54. WOTF statements concerning application controls is correct
55. The significance of hardware controls is that they
56. The following statements relate to internal control in an electronic data
57. An entity has recently converted its revenue
58. The most important segregation of duties in the organization
59. A systems analyst should have access to each of the following
60. WOTF would represent an internal control weakness
61. The manager of computer operations prepares a weekly
62. One of the major problems in a CIS environment is that
63. In the organization of the information systems function
64. An entity has recently converted its purchasing cycle from
65. An entity should plan the physical location of its
66. WOTF statements regarding security concerns for notebook computers
67. The following are database administrator’s responsibilities
68. WOTF groups should have the operational responsibility
69. An inexperienced computer operator mounted an incorrect version
70. WOTF is the best method to prevent unauthorized alteration
71. WOTF would least likely ensure the development of an effective application system
72. WOTF would most likely cause a problem in the computer program
73. WOTF controls would most likely provide protection against
74. WOTF would most likely indicate that a computer virus is present
75. WOTF operating procedures would most likely increase
76. An entity installed antivirus software on all
77. The accountant who prepared a spreadsheet model for workload forecasting left
78. What is the appropriate term for the process of monitoring,
79. Program documentation is a control designed
80. An entity updates its accounts receivable
81. An entity’s contingency plans for computer information
82. WOTF is the primary objective of security software
83. All administrative and professional staff in an entity’s legal department
84. An internal auditor has just concluded a physical security
85. WOTF best described the process called authentication
86. WOTF assurances is not provided by an application control
87. Data processing activities may be classified in terms
88. WOTF is the purpose of input controls
89. If a control total were to be computed on each of the following
90. An entity uses the account code 699
91. WOTF provides the most valuable information for detecting
92. Many customers, managers, employees, and suppliers have blamed the computer
93. Data conversion is the transcription of the transaction
94. WOTF best describes the online date processing
95. When erroneous data are detected by computer
96. If a payroll system continues to pay employees
97. In the accounting system of Samantha company
98. WOTF input validation checks is least likely
99. A receiving clerk keyed in a shipment from a remote terminal
100. A wholesaler of automotive parts has a computerized billing
101. WOTF computerized control procedures would most likely provide reasonable assurance
102. An entity’s labor distribution report requires extensive corrections
103. If, in reviewing an application system
104. A mail-order retailer of low-cost novelty items is receiving an increasing number
105. WOTF is the major purpose of the auditor’s study
106. When the auditor chooses to use only the non-IT segment of a client’s control
107. The following statements relate to the auditor’s assessment of control risk in an entity’s
108. Computer programs and data that the auditor may use
109. One common type of CAAT is the use of audit software to process data
110. Customized or purpose written programs perform audit tasks
111. These computer programs are enhanced productivity tools that are typically part of a
112. Embedded audit routines are sometimes built into an entity’s computer information system
113. When an accounting application is processed by computer
114. Auditing through the computer must be used when
115. When an auditor tests a computer information system
116. An auditor who is testing IT controls in a payroll system
117. Auditors have learned that increased computerization
118. To obtain evidence that online access controls are properly
119. WOTF CAATs allows fictitious and real transactions
120. In auditing an online perpetual inventory system, an auditor

CHAPTER 7
1. All the information used by the auditor
2. An entity’s accounting records generally include the records
3. Audit evidence comprises
4. As defined in PSA 500, is an individual or organization possessing the expertise
5. If a management’s expert’s work is used to prepare the information
6. WOTF statements concerning the management’s expert’s competence
7. Audit evidence is information used to draw reasonable
8. WOTF statements concerning audit evidence is correct
9. WOTF statements concerning audit evidence is correct
10. WOTF generalizations does not relate to the reliability of audit evidence
11. WOTF statements concerning audit evidence is false
12. In representing that the financial statements are presented fairly
13. The auditor is required to use assertions for classes of transactions, account balances, and
14. The following are assertions about account balances
15. The following are assertions about presentation
16. WOTF statements concerning the auditor’s use of assertions
17. WOTF statements concerning audit objectives is
18. The primary difference between an audit of the balance sheet and an audit
19. WOTF would least likely affect the appropriateness of evidence
20. WOTF forms of documentary evidence would be considered
21. The objective of tests of details of transactions
22. In testing the existence assertion for an asset, an auditor
23. In determining whether transactions have been recorded,
24. WOTF audit procedures consists of looking
25. WOTF elements ultimately determines the specific auditing procedures
26. The auditor should apply analytical procedures
27. Analytical procedures include the consideration of comparisons
28. WOTF should be considered by the auditor when designing
29. The following statements relate to use of analytical procedures as substantive procedures
30. WOTF should be considered by the auditor in determining the sustainability
31. The reliability of data is influenced by its source and by its nature and is dependent
32. According to PSA 520, when analytical procedures identify significant fluctuations
33. The following are the auditor’s principal objectives in the audit
34. Auditors are often concerned with the possibility of overstatement of sales
35. In the audit of which of the following general ledger account will tests
36. WOTF might be detected by an auditor’s review
37. An auditor most likely would review a client’s periodic accounting
38. If the objective of a test of details of transactions is to detect overstatements of sales
39. Cutoff tests designed to detect credit sales
40. An auditor most likely would limit substantive audit test of sales transactions
41. Tracing bills of lading to sales invoices
42. The auditor finds a situation in which one person has the ability to collect receivables
43. WOTF most likely would give the most assurance concerning the valuation
44. WOTF is not a principal objective in auditing accounts receivable
45. A large university has relatively
46. The process of obtaining and evaluating audit evidence through a direct communication
47. The confirmation of customer’s accounts receivable
48. Auditors may use positive and /or negative forms of confirmation
49. The following statements relate to the use of negative confirmation
50. In confirming accounts receivable, an auditor decided to confirm customer’s account
51. WOTF would an auditor most likely add to the negative form of confirmations
52. An auditor confirms a representative number of open accounts as of
53. During the process of confirming receivables as of December
54. A company has computerized sales and cash receipts journals
55. To reduce the risks associated with accepting fax responses to requests
56. PSA 505 defines confirmation as “the process of
57. For accounts receivable, negative confirmation is less
58. WOTF procedures would an auditor most likely perform for year-end
59. WOTF is the most effective procedure for determining the collectibility
60. An auditor reconciles the total of the accounts receivable subsidiary ledger
61. Once a CPA has determined that the accounts receivable have increased
62. All of the following are examples of substantive procedures to verify
63. The most likely reason for the auditor to be concerned about
64. When counting cash on hand, the auditor must exercise control
65. The best evidence regarding year-end bank
66. WOTF sets of information does an auditor usually confirm on one form
67. An auditor ordinarily sends a standard confirmation requests
68. WOTF items is not requested on a standard bank account
69. WOTF is not considered an objective
70. The purpose of a proof of cash is to
71. An internal auditor would be concerned about the possibility
72. Purchase cutoff procedures test the completeness assertion
73. In auditing accounts payable, an auditor’s procedures most likely
74. WOTF is the primary audit test to determine if accounts payable are valued
75. WOTF procedures is least likely to be performed before the balance sheet
76. An auditor performs a test to determine whether all merchandise for which
77. WOTF is a substantive procedure that an auditor would most likely perform to verify
78. When using confirmations to provide evidence about the completeness
79. Unrecorded liabilities are most likely to be found
80. WOTF audit procedures is least likely to detect
81. When title to merchandise in transit has passed to the audit client, the auditor engaged in
82. WOTF audit procedures is best for identifying unrecorded trade
83. In a payables application, checks are
84. WOTF procedures relating to the examination of accounts payable
85. In an audit of a purchasing department, which of the following usually
86. The following statements compare confirmation of accounts
87. WOTF procedures would an auditor least likely perform before
88. WOTF statements concerning the auditor’s attendance at
89. PSA 501 states that in planning attendance
90. According to PSA 501, when inventories are under the custody
91. In an audit of inventories, an auditor is least likely to verify that
92. An auditor selected items for test counts while observing
93. An auditor is most likely to inspect loan agreements under which
94. If the perpetual inventory records show lower quantities of inventory than the physical count
95. A client maintains perpetual inventory in both
96. While obtaining an understanding of the client’s internal control
97. To obtain evidence as to the reasonableness and completeness
98. An auditor concluded that no excessive costs for an idle plant
99. An auditor’s attendance at the physical inventory at the client’s main plant at year-end
100. The audit of year-end physical inventories should include steps to verify
101. PSA 501 states that when inventory is material to the financial statements, the auditor should
102. WOTF audit procedures probably provides the most reliable
103. After accounting for a sequence
104. When outside firms of nonaccountants
105. Periodic or cycle counts of selected
106. Purchase cutoff procedures should
107. WOTF is the best audit test to evaluate
108. An auditor is most likely to learn of slow-moving
109. The physical count of inventory of a retailer was higher than
110. WOTF audit procedures most likely would provide assurance
111. WOTF is not one of the auditor’s primary objectives
112. A company makes a practice of investing excess short term
113. WOTF is the most effective audit procedure for verification
114. WOTF audit procedures would give the least assurance
115. In confirming with an outside agent, such as
116. In establishing the existence and ownership
117. The auditor is making an assessment as to
118. WOTF provides the best form of evidence
119. An auditor is most likely to verify the interest
120. The auditor can best verify a client’s bond sinking fund
121. In the audit of property, plant, and equipment
122. WOTF combinations of procedures
123. If an auditor tours a production facility, WOTF misstatements
124. An auditor analyzes repairs
125. Determining that proper amounts of depreciation
126. The auditor is least likely
127. One audit procedure for an audit of facilities
128. When few property and equipment transactions
129. In violation of a company policy
130. During an audit of a publicly held company
131. A bond trust indenture is the contractual agreement
132. An auditor’s program to audit long-term debt
133. In auditing long-term bonds payable
134. An auditor’s purpose in reviewing
135. In the audit of a medium-sized manufacturing
136. In an audit of shareholders’ equity
137. WOTF transactions would not require a debit
138. The auditor is concerned with establishing that dividends
139. When a client company does not maintain its own share records
140. If the client corporation has a material amount of treasury shares
141. During an audit of a company’s shareholders equity
142. An audit program for the retained earnings account should
143. In auditing payroll, an auditor most likely would
144. An auditor is most likely to perform substantive test of details on payroll
145. WOTF audit procedures would provide the least relevant evidence
146. One payroll audit objective is to determine
147. Substantive procedures for payroll transactions and balances
148. To check the accuracy of hours worked, an auditor would
149. An auditor found that employee time cards
150. As used in PSA 230 (Audit Documentation),
151. According to PSA 230. working papers
152. The following statements relate to the form and content
153. The primary purpose of audit working papers is to
154. Working papers that record the procedures used by the auditor to gather
155. WOTF conditions constitutes inappropriate working paper preparation
156. WOTF factors would least likely affect the form, content, and extent
157. An auditor’s working papers will ordinarily be least likely to include documentation
158. WOTF is usually included or shown in the auditor’s working papers
159. Audit working papers are indexed by means of reference numbers
160. Although the quantity and content of audit working papers
161. The audit working paper that reflects the major components
162. WOTF analyses appearing in a predecessor’s working papers
163. An auditor ordinarily uses a working trial balance
164. Auditors often used standardized working papers primarily because they allow
165. Using personal computers in auditing may affect the methods
166. Audit documentation is the record of audit procedures performed
167. The auditor shall assemble the audit documentation
168. The auditor is required to complete the administrative
169. Audit documentation may be recorded on paper or on electronic or other media
170. The completion of the assemble of the final audit file

CHAPTER 8
1. In designing audit procedures, the auditor is required to determine
2. It will be appropriate to audit all the items
3. PSA 500 states that the auditor may decide to select specific items
4. Audit sampling involves the
5. Population, as defined in PSA 530
6. The two general approaches to audit sampling are
7. The principal methods of selecting samples are the use of
8. An advantage of statistical sampling over nonstatistical sampling is
9. The likelihood of assessing control risk too high
10. While performing a test of details during an audit,
11. The risk of incorrect acceptance and the likelihood of assessing
12. WOTF statements is true
13. The following are examples of nonsampling risk, except
14. The following are advantages of using statistical sampling except
15. WOTF methods is most appropriate when performing tests of controls
16. In an audit of inventory, attribute sampling may be applied
17. The risk that the assessed level of control risk based on the sample is less than the true
18. An element of sampling risk is
19. Statistical sampling provides a technique for
20. The distinguishing feature of statistical sampling is that it
21. WOTF is true if certain forms are not consecutively numbered
22. In examining cash disbursements, an auditor plans to choose a sample using systematic
23. In attribute sampling, a 5% change in which of the following
24. If the size of the sample to be used in a particular test of attributes has not been determined by
utilizing
25. In determining a number of items
26. WOTF statements best describes the concept
27. In assessing sampling risk, the risk of incorrect rejection
28. An underlying feature of random-based
29. If certain forms are not consecutively numbered
30. When performing a test of control with respect to control over
31. For WOTF audit tests would an auditor
32. WOTF sampling methods would be used to estimate
33. WOTF combinations results in a decrease
34. In determining the number of documents to select for a test
35. WOTF factors is usually not considered in
36. The sample size of a test of controls varies inversely with
37. In planning a statistical sample for a test of controls
38. WOTF factors does an auditor usually need to consider
39. WOTF is true concerning statistical sampling
40. WOTF statements is correct concerning statistical sampling
41. An auditor plans to examine sample of 20 purchase orders
42. An attribute sampling plan may be used to test
43. As a result of sampling procedures applied as test
44. The diagram below depicts the auditor’s estimated conclusion
45. In evaluating an attribute sample, the estimated range that is expected
46. WOTF sample planning factors would influence
47. WOTF statements concerning factors that influence sample size
48. A misstatement or deviation that, according to the standard,
49. In performing test of details, what is the auditor’s best estimate
50. WOTF statements concerning projection of errors found in the sample
51. In estimation sampling for variables, which of the following
52. In applying variables sampling, an auditor attempts
53. When planning a sample for a substantive test
54. An auditor may decide to increase the risk of incorrect
55. In statistical sampling methods used in substantive
56. How would decreases in tolerable misstatement and assessed level
57. WOTF courses of action would an auditor most likely follow
58. A number of factors influence the sample size for a substantive test of details
59. An auditor established a P180,000 tolerable misstatement for an asset
60. WOTF sample selection methods is not appropriate
61. WOTF sample selection methods cannot ordinarily
62. In systematic selection, the number of sampling units in the population
63. In audit sampling, involves dividing the population into
64. WOTF statements relating to stratification is incorrect
65. Audit efficiency may be improved when sampling unit