1. During a remote session a hedging example involving the future price of apples was considered. This was used in considering which piece of the COSO internal control framework?
a. Control environment. b. The entity’s risk assessment process. c. Control activities. d. The information system. e. Monitoring of controls
2. The notion of “Audit Philosophy” relates to lowering the cost of the audit. Consider the following statements:
I. Lowering the cost of the audit refers to Audit Effectiveness.
II. By testing liabilities directly [i.e. get audit evidence about the liability account] for understatement, one also obtains information about completeness of an asset account
. a. I is true; II is true. b. I is true; II is false. c. I is false; II is true. d. I is false; II is false.
3. An auditor uses analytical procedures, rather than a detail test, in testing interest expense. This is referred to as a:
a. Rationalization test. b. Reasonableness test. c. Realizable test. d. Redundant test.
4. Which type of accounts receivable confirmation would normally be considered “More Reliable”:
a. Negative b. Notable c. Positive d. Possible
5. The auditor reviews the detail to the accounts receivable Account which has a general ledger balance of $110,000. Detail Support Customer A B C D Total $ Balance $80,000 40,000 (30,000) 20,000 ——– 110,000 ========
a. Type of evidence Scanning; Accounts receivable to be reported on balance Sheet $110,000.
b. Type of evidence Scanning; Accounts receivable to be reported on balance Sheet $140,000.
c. Type of evidence Analytical Review; Accounts receivable to be reported on balance Sheet $110,000.
d. Type of evidence Analytical Review; Accounts receivable to be reported on balance Sheet $140,000.
