University of Liberia

CAPITOL HILL
Monrovia, Liberia
Principles of Auditing – ACCT406 – Section2/ 5/8/90w
Mid Term Exam
74998
I.D # ________________ SCORE _________ 9/16/20
Date:______________

Part 1 Multiple choice ( 20 Points, 2 point each question)

Instruction: Circle the appropriate answer.
1. Audit sampling is defined as:
(a) Applying a procedure to less than 100% of a population
(b) Estimate some characteristic of the population both qualitative & quantitative
(c) All of the
2. Sampling risk is defined as:
(a) Conclusion based on a sample may be different from the conclusion they would reach if they examined
Every items in the population
(b) Risk pertaining to non – sampling errors
(c) None of the above
3. Non- statistical sampling are:
(a) Estimates using professional judgment rather than statistical techniques
(b) Estimates using scientific method
(c) None of the above
4. Other methods of sample selection are:
(a) Haphazard Selection, Block Selection & Stratification
(b) Haphazard selection, Random # Generators & Systematic Selection
(c) None of the above
5. Internal Control – Cash disbursements:
(a) Segregation of duties, Payment of check, by authorized personnel
(b) Segregation of duties, paying without authority
(c) None of the above
6. Controls over Financial investments is:
(a) Establishment of formal investment Policies
(b) System Design
(c) None of the above
7. The five internal control over Accounts receivable & revenue are:
(a) Control Environment, Risk Assessment, Control Activities, Information & Communication & Monitoring
(b) Control Environment, integrity, Accountability, transparency & Risk Assessment
(c) None of the above
8. Audit Risk Formula is :
(a) AR = IR×CR×DR
(b) AR = DR×CR×IR
(c) All of the above
9. Stratification is:
(a) Technique of dividing population into relatively same subgroups
(b) Arbitrary basis
(c) None of the above
10. Sequential (Stop – or – Go) Sampling are:
(a) Audit sample taken in several stages
(b) Purpose of detecting at least one deviation with estimation
(c) All of the above
11. Two types of software are:
(a) System software and Application software
(b) System software and batch software
(c) None of the above
12. The five interrelated components of internal controls:
(a) Control Environment, Risk Assessment, control Activities, Information & controls and monitoring
(b) Risk Assessment, Ethical values, control Activities, Evaluation and monitoring
(c) All of the above
13. Which of this is attributed to integrity and ethical values:
(a) Risk Assessment
(b) Control Environment
(c) None of the above
14. Which of this attributed to supported by policies and procedures and segregation of duties:
(a) Monitoring
(b) Control Activities
(c) All of the above
15. What are the description of misstatement are fraud and errors:
(a) Fraud and Errors
(b) Omission and Transposition
(c) None of the above
16. Reconciliation of Bank Account should not be performed by an individual who also:
(a) Processes of cash disbursements
(b) Prepares the cash budget
(c) None of the above
17. What are the potential misstatement in financial investments:
(a) Unauthorized investment transactions
(b) Misstatements of recorded value of Receivables
(c) None of the above
18. What are the potential misstatement in cash disbursements:
(a) Inaccurate recording of purchase or disbursements
(b) Duplicate recording of Receivables
(c) None
19. To determine the valuation of financial investment should be in accordance with:
(a) GAAP
(b) GAAS
(c) None
20. The two types of assets are:
(a) Property plant & Equipment and Current
(b) Fixed Assets and Property plant & Equipment’s
(c) All of the above