ACG 406 Exam 3 with all Correct & 100% Verified
Answers |Latest Version |Already Graded A+
Designing substantive procedures responds to:
A) risk of all types of misstatements at entity level
B) risk of all types of misstatements at assertion level
C) risk of material misstatement at assertion level
D) risk of material misstatement at entity level ✔Correct Answer-C
Which assertion is typically related to
I/S accounts rather than B/S accounts
or presentation & disclosure?
A) Cutoff
B) Accuracy
C) Rights & obligations
D) Completeness ✔Correct Answer-A
Which of the following would be
the most likely reason
to include more unpredictability
in the selection & performance of audit procedures?
A) Client was not audited in previous year
B) Client has a strong internal control environment
C) Heightened risk of fraud
D) Unpredictability provides audit team with more variety ✔Correct Answer-C
The nature of an audit procedure refers to:
A) When procedure is performed
B) Assessed level of detection risk
C) Purpose & Type
D) Sample Size required to perform procedure ✔Correct Answer-C
All of the following are initial procedures
performed on an account balance except:
A) agreeing opening balance
to audited end balance from prior year working papers
B) vouching items from trial balance to supporting docs
C) scanning account details for unusual items
D) footing trial balance for mathematical accuracy ✔Correct Answer-B
Analytical procedures:
A) are substantive procedures
, & cannot be used at any other stage of audit
B) can be used as substantive tests
but cannot be used as primary tests of a balance
C) are used to test controls
& are not substantive procedures
D) are required during planning & substantive
testing phases of audit ✔Correct Answer-D
Which of the following situations
increases the reliability of data being used
for substantive analytical procedures?
A) Broad industry avgs compared with client data
B) Controls over data have not been tested
C) During prior-year audit,
data was subjected to audit testing
D) Source of data is client's internal budget reports ✔Correct Answer-C
When analyzing results
of substantive procedures,
auditors should beware of:
A) professional skepticism
B) confirmation bias
C) weak internal controls
D) audit engagement deadlines ✔Correct Answer-B
Which of the following situations
would most likely preclude an auditor
from performing substantive procedures
during an interim period?
A) Internal controls are strong & RMM is low
B) Internal controls are weak & RMM is high
C) Internal controls are strong & RMM is high
D) Internal controls are weak & RMM is low ✔Correct Answer-B
Which of the following
would NOT be a reason
to increase EXTENT of a substantive test?
A) Qualitative factors suggest
there may be errors in the account
B) Internal controls are weak
C) RMM is high
D) Auditors have time to test more items ✔Correct Answer-D
Which of the following characteristics
Answers |Latest Version |Already Graded A+
Designing substantive procedures responds to:
A) risk of all types of misstatements at entity level
B) risk of all types of misstatements at assertion level
C) risk of material misstatement at assertion level
D) risk of material misstatement at entity level ✔Correct Answer-C
Which assertion is typically related to
I/S accounts rather than B/S accounts
or presentation & disclosure?
A) Cutoff
B) Accuracy
C) Rights & obligations
D) Completeness ✔Correct Answer-A
Which of the following would be
the most likely reason
to include more unpredictability
in the selection & performance of audit procedures?
A) Client was not audited in previous year
B) Client has a strong internal control environment
C) Heightened risk of fraud
D) Unpredictability provides audit team with more variety ✔Correct Answer-C
The nature of an audit procedure refers to:
A) When procedure is performed
B) Assessed level of detection risk
C) Purpose & Type
D) Sample Size required to perform procedure ✔Correct Answer-C
All of the following are initial procedures
performed on an account balance except:
A) agreeing opening balance
to audited end balance from prior year working papers
B) vouching items from trial balance to supporting docs
C) scanning account details for unusual items
D) footing trial balance for mathematical accuracy ✔Correct Answer-B
Analytical procedures:
A) are substantive procedures
, & cannot be used at any other stage of audit
B) can be used as substantive tests
but cannot be used as primary tests of a balance
C) are used to test controls
& are not substantive procedures
D) are required during planning & substantive
testing phases of audit ✔Correct Answer-D
Which of the following situations
increases the reliability of data being used
for substantive analytical procedures?
A) Broad industry avgs compared with client data
B) Controls over data have not been tested
C) During prior-year audit,
data was subjected to audit testing
D) Source of data is client's internal budget reports ✔Correct Answer-C
When analyzing results
of substantive procedures,
auditors should beware of:
A) professional skepticism
B) confirmation bias
C) weak internal controls
D) audit engagement deadlines ✔Correct Answer-B
Which of the following situations
would most likely preclude an auditor
from performing substantive procedures
during an interim period?
A) Internal controls are strong & RMM is low
B) Internal controls are weak & RMM is high
C) Internal controls are strong & RMM is high
D) Internal controls are weak & RMM is low ✔Correct Answer-B
Which of the following
would NOT be a reason
to increase EXTENT of a substantive test?
A) Qualitative factors suggest
there may be errors in the account
B) Internal controls are weak
C) RMM is high
D) Auditors have time to test more items ✔Correct Answer-D
Which of the following characteristics
