AACA - FINAL EXAM QUESTIONS AND ANSWERS GRADED A+
Which of the following procedures would an auditor most likely perform to test controls relating
to management's assertion about the completeness of cash receipts for cash sales at a retail
outlet?
A. Observe the consistency of the employees' use of cash registers and tapes.
B. Inquire about employees' access to recorded but undeposited cash.
C. Trace deposits in the cash receipts journal to the cash balance in the general ledger.
D. Compare the cash balance in the general ledger with the bank confirmation request. -
Answers A. Observe the consistency of the employees' use of cash registers and tapes.
To provide assurance that each voucher is submitted and paid only once, an auditor most likely
would examine a sample of paid vouchers and determine whether each voucher is
A. supported by a vendor's invoice.
B. stamped "paid" by the check signer.
C. prenumbered and accounted for.
D. approved for authorized purchases. - Answers B. stamped "paid" by the check signer.
The auditor looks for an indication on duplicate sales invoices to see if the invoices have been
verified. This is an example of
A. a test of details of balances.
,B. a test of control.
C. a substantive test of transactions.
D. both a test of control and a substantive test of transactions - Answers B. a test of control.
Which of the following controls may prevent the failure to bill customers for some shipments?
A. Each shipment should be supported by a prenumbered sales invoice that is accounted for.
B. Each sales order should be approved by authorized personnel.
C. Sales journal entries should be reconciled to daily sales summaries.
D. Each sales invoice should be supported by a shipping document. - Answers A. Each shipment
should be supported by a prenumbered sales invoice that is accounted for.
The size of a sample designed for dual-purpose testing should be
A. The larger of the samples that would otherwise have been designed for the two separate
purposes.
B. The smaller of the samples that would otherwise have been designed for the two separate
purposes.
C. The combined total of the samples that would otherwise have been designed for the two
separate purposes.
D. More than the larger of the samples that would otherwise have been designed for the two
separate purposes, but less than the combined total of the samples that would otherwise have
been designed for the two separate purposes. - Answers A. The larger of the samples that
would otherwise have been designed for the two separate purposes.
An auditor, who, before the completion of the engagement, is requested to change the
engagement to one which provides a lower level of assurance, should consider the
appropriateness of doing so. If the auditor concludes that there is reasonable justification to
change the engagement and if the audit work performed complies with the PSAs applicable to
the changed engagement, the report issued would be that appropriate for the revised terms of
engagement and would include reference to:
I. The original engagement.
II. Any procedures that may have been performed in the original engagement.
,A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II. - Answers D. Neither I nor II.
An entity installed antivirus software on all its personal computers. The software was designed
to prevent initial infections, stop replication attempts, detect infections after their occurrence,
mark affected system components, and remove viruses from infected components. The major
risk in relying on antivirus software is that it may
A. Consume too many system resources.
B. Interfere with system operations.
C. Not detect certain viruses.
D. Make software installation too complex. - Answers C. Not detect certain viruses.
Which of the following procedures relating to the examination of accounts payable could the
auditor delegate entirely to the client's employees?
A. Test footings in the accounts payable ledger.
B. Reconcile unpaid invoices to vendors' statements.
C. Prepare a schedule of accounts payable.
D. Mail confirmations for selected account balances. - Answers C. Prepare a schedule of
accounts payable.
Which of the following procedures would an auditor most likely perform for year-end accounts
receivable confirmation when the auditor did not receive replies to second requests?
A. Review the cash receipts journal for the month prior to year-end.
B. Intensify the study of internal control concerning the revenue cycle.
C. Increase the assessed level of detection risk for the existence assertion.
, D. Inspect the shipping records documenting the merchandise sold to the debtors. - Answers D.
Inspect the shipping records documenting the merchandise sold to the debtors.
Each time an auditor draws a conclusion based on evidence from a sample, an additional risk,
sampling risk, is introduced. An example of sampling risk is
A. Improperly applying a proper audit procedure to sample data.
B. Properly applying an improper audit procedure to sample data.
C. Projecting the results of sampling beyond the population tested.
D. Drawing an erroneous conclusion from sample data. - Answers D. Drawing an erroneous
conclusion from sample data.
Which of the following questions would not appear in an internal control questionnaire relating
to cash disbursements?
A. Are all disbursements except for petty cash made by check?
B. Are imprinted and prenumbered checks used and is a check protection device used in
printing the check amount?
C. Is each check supported by an approved voucher?
D. Are prelistings made of all cash receipts? - Answers D. Are prelistings made of all cash
receipts?
Which of the following observations, made during the preliminary survey of a local department
store's disbursement cycle, reflects a control strength?
A. Individual department managers use prenumbered forms to order merchandise from vendors.
B. The receiving department is given a copy of the purchase order complete with a description
of goods, quantity ordered, and extended price for all merchandise ordered.
C. The treasurer's office prepares checks for suppliers based on vouchers prepared by the
accounts payable department.
D. Individual department managers are responsible for the movement of merchandise from the
receiving dock to storage or sales areas as appropriate. - Answers C. The treasurer's office
prepares checks for suppliers based on vouchers prepared by the accounts payable department.
Which of the following procedures would an auditor most likely perform to test controls relating
to management's assertion about the completeness of cash receipts for cash sales at a retail
outlet?
A. Observe the consistency of the employees' use of cash registers and tapes.
B. Inquire about employees' access to recorded but undeposited cash.
C. Trace deposits in the cash receipts journal to the cash balance in the general ledger.
D. Compare the cash balance in the general ledger with the bank confirmation request. -
Answers A. Observe the consistency of the employees' use of cash registers and tapes.
To provide assurance that each voucher is submitted and paid only once, an auditor most likely
would examine a sample of paid vouchers and determine whether each voucher is
A. supported by a vendor's invoice.
B. stamped "paid" by the check signer.
C. prenumbered and accounted for.
D. approved for authorized purchases. - Answers B. stamped "paid" by the check signer.
The auditor looks for an indication on duplicate sales invoices to see if the invoices have been
verified. This is an example of
A. a test of details of balances.
,B. a test of control.
C. a substantive test of transactions.
D. both a test of control and a substantive test of transactions - Answers B. a test of control.
Which of the following controls may prevent the failure to bill customers for some shipments?
A. Each shipment should be supported by a prenumbered sales invoice that is accounted for.
B. Each sales order should be approved by authorized personnel.
C. Sales journal entries should be reconciled to daily sales summaries.
D. Each sales invoice should be supported by a shipping document. - Answers A. Each shipment
should be supported by a prenumbered sales invoice that is accounted for.
The size of a sample designed for dual-purpose testing should be
A. The larger of the samples that would otherwise have been designed for the two separate
purposes.
B. The smaller of the samples that would otherwise have been designed for the two separate
purposes.
C. The combined total of the samples that would otherwise have been designed for the two
separate purposes.
D. More than the larger of the samples that would otherwise have been designed for the two
separate purposes, but less than the combined total of the samples that would otherwise have
been designed for the two separate purposes. - Answers A. The larger of the samples that
would otherwise have been designed for the two separate purposes.
An auditor, who, before the completion of the engagement, is requested to change the
engagement to one which provides a lower level of assurance, should consider the
appropriateness of doing so. If the auditor concludes that there is reasonable justification to
change the engagement and if the audit work performed complies with the PSAs applicable to
the changed engagement, the report issued would be that appropriate for the revised terms of
engagement and would include reference to:
I. The original engagement.
II. Any procedures that may have been performed in the original engagement.
,A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II. - Answers D. Neither I nor II.
An entity installed antivirus software on all its personal computers. The software was designed
to prevent initial infections, stop replication attempts, detect infections after their occurrence,
mark affected system components, and remove viruses from infected components. The major
risk in relying on antivirus software is that it may
A. Consume too many system resources.
B. Interfere with system operations.
C. Not detect certain viruses.
D. Make software installation too complex. - Answers C. Not detect certain viruses.
Which of the following procedures relating to the examination of accounts payable could the
auditor delegate entirely to the client's employees?
A. Test footings in the accounts payable ledger.
B. Reconcile unpaid invoices to vendors' statements.
C. Prepare a schedule of accounts payable.
D. Mail confirmations for selected account balances. - Answers C. Prepare a schedule of
accounts payable.
Which of the following procedures would an auditor most likely perform for year-end accounts
receivable confirmation when the auditor did not receive replies to second requests?
A. Review the cash receipts journal for the month prior to year-end.
B. Intensify the study of internal control concerning the revenue cycle.
C. Increase the assessed level of detection risk for the existence assertion.
, D. Inspect the shipping records documenting the merchandise sold to the debtors. - Answers D.
Inspect the shipping records documenting the merchandise sold to the debtors.
Each time an auditor draws a conclusion based on evidence from a sample, an additional risk,
sampling risk, is introduced. An example of sampling risk is
A. Improperly applying a proper audit procedure to sample data.
B. Properly applying an improper audit procedure to sample data.
C. Projecting the results of sampling beyond the population tested.
D. Drawing an erroneous conclusion from sample data. - Answers D. Drawing an erroneous
conclusion from sample data.
Which of the following questions would not appear in an internal control questionnaire relating
to cash disbursements?
A. Are all disbursements except for petty cash made by check?
B. Are imprinted and prenumbered checks used and is a check protection device used in
printing the check amount?
C. Is each check supported by an approved voucher?
D. Are prelistings made of all cash receipts? - Answers D. Are prelistings made of all cash
receipts?
Which of the following observations, made during the preliminary survey of a local department
store's disbursement cycle, reflects a control strength?
A. Individual department managers use prenumbered forms to order merchandise from vendors.
B. The receiving department is given a copy of the purchase order complete with a description
of goods, quantity ordered, and extended price for all merchandise ordered.
C. The treasurer's office prepares checks for suppliers based on vouchers prepared by the
accounts payable department.
D. Individual department managers are responsible for the movement of merchandise from the
receiving dock to storage or sales areas as appropriate. - Answers C. The treasurer's office
prepares checks for suppliers based on vouchers prepared by the accounts payable department.
