Question 1

The estimate of uncollectible accounts receivable based on percentage of sales

Response: Emphasizes measurement of bad debt expense
Correct answer: Emphasizes measurement of bad debt expense
Score: 1 out of 1 Yes

Question 2
What is imputed interest?
Response: Interest based on the implicit interest rate
Correct answer: Interest based on the implicit interest rate
Score: 1 out of 1 Yes

Question 3
After being held for 40 days, a 120-day 12% interest-bearing note receivable was
discounted at a bank at 15%. The net proceeds from discounting are equal to
Response: Maturity value less the discount at 15%
Correct answer: Maturity value less the discount at 15%
Score: 1 out of 1 Yes

Question 4
When an entity factored accounts receivable without recourse with a bank, the
transaction is best described as
Response: Sale of accounts receivable to the bank, with the risk of uncollectible
accounts transferred to the bank
Correct answer: Sale of accounts receivable to the bank, with the risk of uncollectible
accounts transferred to the bank
Score: 1 out of 1 Yes

Question 5
If a note receivable is discounted with recourse
Response: Note receivable discounted is credited
Correct answer: Note receivable discounted is credited
Score: 1 out of 1 Yes

Question 6
1. What is the accounts receivable balance at December 31, 2014? _____
2. What is the December 31, 2014, balance of the Allowance for Doubtful
Account? _____
Response: 6390000
Response: 71025
Correct answer: 6390000, 71025
Score: 2 out of 2 Yes

Question 7
If the objective of a test of details is to detect overstatements of sales, the auditor
should trace transactions from the
Response: Accounting records to the source documents
Correct answer: Accounting records to the source documents
Score: 1 out of 1 Yes

Question 8
What is the primary assertion being addressed by confirmation of receivables?
Response: Existence
Correct answer: Existence
Score: 1 out of 1 Yes

Question 9
Which of the following is a procedure to verify the existence of receivables and or
occurrence of sales?
 Response: Tracing the shipping documents to recorded sales transactions and
receivable
Correct answer: Confirmation of receivables to customers
Score: 0 out of 1 No

Question 10

Based on the above data answer the following:

1. The company’s sales revenue for the three-year period amounted to _____
2. What is the company’s total sales revenue for 2013? _____
3. The aggregate amount of purchases for the three-year period is _____
4. What is the company’s gross profit ratio in each of the three-year
period? (round your answer in two decimal places ex. 25.67%) _____
5. What is the company’s gross profit for 2014? _____
Response: 658200
Response: 206400
Response: 446000
Response: 33.33%
Response: 89400
Correct answer: 658000, 206400, 446000, 33.33%, 89400
Score: 4 out of 5

Question 11
Which of the following scenario would positive confirmation be appropriate?
Response: The auditor has a reason to believe that recipients of negative confirmation
requests will disregard such confirmation requests
Correct answer: The auditor has a reason to believe that recipients of negative
confirmation requests will disregard such confirmation requests
Score: 1 out of 1 Yes

Question 12
Trade receivables are classified as current assets if these are reasonably expected to
be collected
Response: Within one year or within the operating cycle, whichever is longer
Correct answer: Within one year or within the operating cycle, whichever is longer
Score: 1 out of 1 Yes

Question 13
Your client left the cash receipts journal open after 12/31/2021 for an extra day
included January 1,2022 cash receipts in 12/31/2021 totals. All of those cash receipts
were due to cash sales. Assuming the client uses a periodic inventory system with a
12/31/2021 count of the physical inventory, which of the following is most likely to be
true relating to the year 2021 financial statements?
Response: Net income is overstated
Correct answer: Net income is overstated
Score: 1 out of 1 Yes

Question 14
When an entity uses the allowance method for recognizing uncollectible accounts, the
entry to record the write-off of a specific uncollectible account
Response: Affects neither net income nor working capital
Correct answer: Affects neither net income nor working capital
Score: 1 out of 1 Yes

Question 15
When the direct write-off method of recognizing bad debt expense is used, the entry to
write off a specific customer account would
Response: Decrease both accounts receivable and net income
Correct answer: Decrease both accounts receivable and net income
Score: 1 out of 1 Yes

Question 16
 Write your answers on the blanks provided.
Based on the above data, compute for the following:

1. Amount of cash received on June 30 factoring? _____

2. Amount paid on November 1 default on the 300,000 note. _____
3. Amount of cash received on December 31 collection of the account of ULYSES. _____
Response: 300000
Response: 330000
Response: 336600
Correct answer: 300000, 330000, 336600
Score: 3 out of 3 Yes

Question 17
 Based on the above data, compute for the following:

1. The adjustment of retained earnings as of January 1, 2021. _____

2. The total interest income in 2021. _____
3. Current portion of long-term receivables as of December 31, 2021. _____
4. Non-current receivables as of December 31, 2021. _____
5. Assuming that none of the errors were detected and corrected in 2021, the net income
in 2021 would be overstated by _____
Response: 254002
Response: 168086
Response: 589282
Response: 683556
Response: 11912
Correct answer: 254002, 168086, 589282, 683556, 11912
Score: 5 out of 5 Yes

Question 18
On July 1 of the current year, an entity received a one-year note receivable bearing
interest at the market rate. The face amount of the note receivable and the entire
amount of the interest are due in one year. When the note receivable was recorded on
July 1, which of the following was debited?
Response: Neither interest receivable nor unearned discount on note receivable
Correct answer: Neither interest receivable nor unearned discount on note receivable
Score: 1 out of 1 Yes

Question 19
On July 1 of the current year, an entity obtained a two-year 8% note receivable for
services rendered. At that time, the market rate of interest was 10%. The face amount
of the note and the entire amount of interest are due on the date of maturity. Interest
receivable on December 31 of the current year is
Response: 4% of the face amount of the note
Correct answer: 4% of the face amount of the note
Score: 1 out of 1
Question 1
What is the main objective when considering the acceptance or continuance of an
engagement?
Response: To obtain understanding of the entity and its environment including its
internal controls
Correct answer: To obtain preliminary understanding of the entity
Score: 0 out of 1 No

Question 2
Which of the following assertions is least likely to be addressed by sending bank
confirmation?
Response: Classification
Correct answer: Classification
Score: 1 out of 1 Yes

Question 3
In determining the overall materiality which of the following is the best choice for the
audit engagement?
Response: None of the choices
Correct answer: Lowest Materiality
Score: 0 out of 1 No

Question 4
_____
Response: 861900
Correct answer: 861900
Score: 1 out of 1 Yes

Question 5
Developing an overall audit strategy involves the following except:
Response: Determining the audit opinion to be issued
Correct answer: Determining the audit opinion to be issued
Score: 1 out of 1 Yes

Question 6
These are processes designed and effected by those charged with governance,
management and other personnel to provide reasonable assurance about the
achievement of the entity's objectives with regard to reliability of financial reporting
effectiveness and efficiency of operations and compliance with applicable laws and
regulations.
Response: Internal Controls
Correct answer: Internal Controls
Score: 1 out of 1 Yes

Question 7
The following are audit procedures to be done in performing a test of control except
which one?
Response: Confirmation
Correct answer: Confirmation
Score: 1 out of 1 Yes

Question 8
 Based on the above data and the result of your audit, compute for the following:
1. How much is the total outstanding checks on June 30? _____
2. How much is the total adjusted cash receipts in June? _____
3. How much is the total adjusted cash balance as of June 30? _____
Response: 400000
Response: 2350000
Response: 2480000
Correct answer: 400000, 2350000, 2480000
Score: 3 out of 3 Yes

Question 9
Proof of cash or four-column-bank reconciliation is normally prepared by
Response: The auditor
Correct answer: The auditor
Score: 1 out of 1 Yes

Question 10
When communicating with the predecessor, which of the following is not necessary
information to be discussed?
Response: Fraudulent transactions made by the management
Correct answer: Fraudulent transactions made by the management
Score: 1 out of 1 Yes

Question 11
What audit evidence concerning segregation of duties ordinarily is best obtained?
Response: Observing the employees as they apply specific controls
Correct answer: Observing the employees as they apply specific controls
Score: 1 out of 1 Yes

Question 12
The risk of material misstatement comprises which of the following?
Response: Inherent risk and Control risk
Correct answer: Inherent risk and Control risk
Score: 1 out of 1 Yes

Question 13
 When considering internal controls during the interim period, the auditor has assessed
the control risk at a minimum and performed interim substantive tests. The records and
procedures would most likely be tested again at year-end for the intervening period if
Response: Audit procedures conducted resulted for the auditor to believe that
conditions have changed
Correct answer: Audit procedures conducted resulted for the auditor to believe that
conditions have changed
Score: 1 out of 1 Yes

Question 14
Which of the choices is considered a test of control rather than a substantive test?
Response: Send confirmation letter to banks
Correct answer: Examine signatures on checks
Score: 0 out of 1 No

Question 15
To test for recorded sales for which there were no actual shipments, the auditor traces
from the
Response: Sales journal to the bill of lading
Correct answer: Sales journal to the bill of lading
Score: 1 out of 1 Yes

Question 16
1. The adjusted cash in bank balance on January 31 _____
2. The adjusted bank disbursements in February _____
3. The adjusted cash in bank balance on February 28 _____
4.
5.
Response: 209600
Response: 78850
Response: 283550
Correct answer: 209600, 78850, 283550
Score: 3 out of 3 Yes

Question 17
The internal controls surrounding the revenue cycle provide the organization with
several assurances that include all of the following except the
Response: Approval of all credit sales transactions after they are processed
Correct answer: Approval of all credit sales transactions after they are processed
Score: 1 out of 1 Yes

Question 18
In assessing control risk for purchases, an auditor vouches a sample of entries in the
voucher register to the supporting documents. Which of assertion would this test of
controls most likely support?
Response: Existence or occurrence
Correct answer: Valuation or allocation
Score: 0 out of 1 No

Question 19
This procedure confirms the auditor's understanding of how the accounting systems
and control procedures function
Response: Walk-through test
Correct answer: Walk-through test
Score: 1 out of 1 Yes

Question 20
Which of the following controls most likely would assure that all billed sales are
correctly posted to the account's receivable ledger?
Response: Daily sales summaries are compared to daily postings to the accounts
receivable ledger.
Correct answer: Daily sales summaries are compared to daily postings to the accounts
receivable ledger.
Score: 1 out of 1 Yes

Question 21
The risk pertains to the inability of the business to obtain its business objectives
Response: Business risk
Correct answer: Business risk
Score: 1 out of 1 Yes

Question 22
This pertains to a system that traces detailed transactions relating to an item in the
accounting record
Response: Audit Trail
Correct answer: Audit Trail
Score: 1 out of 1 Yes
 Question 23
The general cash account is considered significant in almost all audits
Response: Even when the ending balance is immaterial
Correct answer: Even when the ending balance is immaterial
Score: 1 out of 1 Yes

Question 24

Write the letter of your choice in the blanks provided:

1. _____
2. _____
3. _____
Response: B
Response: D
Response: B
Correct answer: B, B., b., D, d., D., B, b., B.
Score: 3 out of 3 Yes

Question 25
1. What is the adjusted petty cash fund balance on December 31, 2014? _____
2. What is the adjusted Cash in bank – Tsunami Bank balance on December 31,
2014? _____
3. The December 31, 2014 statement of Financial Position should show Cash and
Cash Equivalents at _____
Response: 10250
Response: 431710
Response: 5442960
Correct answer: 10250, 432710, 5442960
Score: 2 out of 3

Question 26
Is there a need to send new engagement letter every year?
Response: No need to sen new engagement letter every year except when there are
revisions in the egagement
Correct answer: No need to sen new engagement letter every year except when there
are revisions in the egagement
Score: 1 out of 1 Yes

Question 27
The following are the inherent limitations in an internal control except which one?
Response: Cost of an internal control should not exceed the expected benefits to be
derived from it
Correct answer: Circumvention of internal controls through collisions
Score: 0 out of 1 No

Question 28
Consider the following statements and choose the best choice.

I. Under the PSA, it is necessary for the successor auditor to communicate with the
predecessor auditor regardless of management's approval.

II. Where the management refused to allow the successor auditor to communicate with
the predecessor auditor, the auditor may nonetheless accept the engagement without
the need of heightened professional skepticism.
Response: Both statements are true
Correct answer: Both statements are false
Score: 0 out of 1 No

Question 29
The auditor should design and implement overall responses to address the risks of
material misstatement at the financial statement level which inlcudes (choose the wrong
choice)
Response: Emphasizing to the audit team the need to maintain professional skepticism
during the planning and execution
Correct answer: Emphasizing to the audit team the need to maintain professional
skepticism during the planning and execution
Score: 1 out of 1 Yes

Question 30
Which of the following is a standard control over cash disbursements?
Response: Checks should be sequentially numbered and the numerical sequence
should be accounted for by the person preparing bank reconciliation
Correct answer: Checks should be sequentially numbered and the numerical sequence
should be accounted for by the person preparing bank reconciliation
Score: 1 out of 1 Yes

Question 31
 Write the letter of your answer in the blanks provided

1. _____
2. _____
Response: B
Response: D
Correct answer: B, B., b., D, D., d.
Score: 2 out of 2 Yes
Question 32
Which of the following is not a financial statement assertion relating to account
balances?
Response: Valuation and competence
Correct answer: Valuation and competence
Score: 1 out of 1 Yes

Question 33
The following pertain to materiality:

I. Materiality is the largest amount of misstatement that the auditor could tolerate in the
financial statements

II. Materiality is the smallest aggregate amount that could materially misstate the
financial statements
Response: Only statement II is wrong
Correct answer: Both statements are correct
Score: 0 out of 1 No

Question 34
There are three categories of financial statement assertions: Assertions pertaining to
account balances at period end, assertions pertaining to classes of transactions and
events during the period, and assertions pertaining to presentation and disclosure.
Which of the following is a financial statement assertion that is common to all three
categories?
Response: Completeness
Correct answer: Completeness
Score: 1 out of 1 Yes

Question 35
_____
Response: 12763050
Correct answer: 12763050
Score: 1 out of 1 Yes

Question 36
1. What is the total book receipts for December? _____
2. What is the total outstanding checks on December 31, 2014? _____
3. What is the adjusted cash balance on December 31, 2014? _____
Response: 112000
Response: 46938
Response: 275682
Correct answer: 112000, 46938, 275682
Score: 3 out of 3 Yes

Question 37
What is the major difference between the revenue and the expenditure cycle?
Response: In the revenue cycle, cash is received; in the expenditure cycle cash is paid
out.
Correct answer: In the revenue cycle, cash is received; in the expenditure cycle cash is
paid out.
Score: 1 out of 1 Yes

Question 38
For good internal control, the person who should sign checks is the
Response: Treasurer
Correct answer: Treasurer
Score: 1 out of 1 Yes

Question 39
_____
Response: 757200
Correct answer: 757200
Score: 1 out of 1

Question 1
Which of the following functions is not common to the expenditure/disbursement cycle?
Response: Resources are acquired from employees in exchange for obligations to pay
Correct answer: Resources are held, used or transformed
Score: 0 out of 1 No

Question 2
Which of the following statements is/are correct?

Statement 1: Planning involves developing an overall strategy for the expected conduct
and scope of the audit.

Statement 2: Supervision involves directing the efforts of assistants who are involved in
accomplishing the objectives of the audit and determining whether those objectives
were accomplished.
Response: Both statements are correct
Correct answer: Both statements are correct
Score: 1 out of 1 Yes
Question 3
Matching the suppliers' invoice, the purchase order, and the receiving report normally
should be the responsibility of the
Response: Accounting function
Correct answer: Receiving department
Score: 0 out of 1 No

Question 4
Which of the following statements is/are correct?

Statement 1: The auditor and the client should agree on the terms of the engagement.
Such an agreement may be in the form of audit engagement letter or other suitable form
of contract.

Statement 2: Even in those countries where the scope of the audit is established by law,
an engagement letter may be informative for the client.
Response: Both statements are incorrect
Correct answer: Both statements are correct
Score: 0 out of 1 No

Question 5
If internal control is well-designed, employees in the same department most likely
would approve purchase orders and also
Response: Negotiate terms with vendors
Correct answer: Authorize requisition of goods
Score: 0 out of 1 No

Question 6
Which of the following departments most likely would approve changes in
pay rates and deductions from employee salaries?
Response: Personnel
Correct answer: Personnel
Score: 1 out of 1 Yes

Question 7
The transaction cycles approach leads to efficient processing of large number of
transactions because
Response: A large number of transactions within a given cycle can be categorized into
a relatively small number of distinct types.
Correct answer: A large number of transactions within a given cycle can be categorized
into a relatively small number of distinct types.
Score: 1 out of 1 Yes

Question 8
Management assertions are:
Response: Implied or express representations about the accounts in the financial
statements
Correct answer: Implied or express representations about the accounts in the financial
statements
Score: 1 out of 1 Yes

Question 9
How can an auditor test to determine whether Receiving Department procedures are
applied properly?
Response: Observe receiving procedures on a surprise basis
Correct answer: Observe receiving procedures on a surprise basis
Score: 1 out of 1 Yes

Question 10
Before accepting an audit engagement, a successor auditor should make specific
inquiries of the predecessor auditor regarding:
Response: Disagreement which the predecessor had with the client concerning auditing
procedures and accounting principles
Correct answer: Disagreement which the predecessor had with the client concerning
auditing procedures and accounting principles
Score: 1 out of 1 Yes

Question 11
Which of the following statements is incorrect?
Response: Planning is not a discrete phase of an audit, but rather a continual and
iterative process that often begins shortly after (or in connection with) the completion of
the previous audit and continues until the finalization of the audit program.
Correct answer: Planning is not a discrete phase of an audit, but rather a continual and
iterative process that often begins shortly after (or in connection with) the completion of
the previous audit and continues until the finalization of the audit program.
Score: 1 out of 1 Yes

Question 12
Which of the following statements is/are correct?

Statement 1: Where the terms of the engagement are changed, the auditor and the
client should agree on the new terms.

Statement 2: The auditor should not agree to a change of engagement when there is no
reasonable justification for doing so.

Statement 3: If the auditor is unable to agree to a change of the engagement and is not
permitted to continue the original engagement, the auditor should withdraw and
consider whether there is any obligation, either contractual or otherwise, to report to
other parties, such as the board of directors or shareholders, the circumstances
necessitating the withdrawal.
Response: Only two statements are correct
Correct answer: All statements are correct
Score: 0 out of 1 No

Question 13
Which of the following is the auditor's purpose of further testing internal control
procedures?
Response: Provide a basis for reducing the assessed level of control risk below that
which resulted from the auditor's initial understanding of internal control
Correct answer: Provide a basis for reducing the assessed level of control risk below
that which resulted from the auditor's initial understanding of internal control
Score: 1 out of 1 Yes

Question 14
Information about segregation of duties ordinarily is best obtained by
Response: Observing employees as they apply specific controls.
Correct answer: Observing employees as they apply specific controls.
Score: 1 out of 1 Yes

Question 15
Which of the following is a responsibility that should not be assigned to only one
employee?
Response: Access to securities in the company's safe deposit box
Correct answer: Access to securities in the company's safe deposit box
Score: 1 out of 1 Yes

Question 16
 The use of pre-numbered invoices, then accounting for their numeric sequence, meets
primarily the:
Response: Completeness assertion
Correct answer: Completeness assertion
Score: 1 out of 1 Yes

Question 17
Which of the following procedures is not performed as a part of planning an
audit engagement?
Response: Test of controls
Correct answer: Designing an audit program
Score: 0 out of 1 No

Question 18
A The purpose of segregating the duties of hiring personnel and distributing payroll
checks is to separate the
Response: Authorization of transactions from the custody of related assets
Correct answer: Authorization of transactions from the custody of related assets
Score: 1 out of 1 Yes

Question 19
In a financial statement audit, the auditor is required to perform test of
controls when
I. The auditor's risk assessment includes expectation of the operating effectiveness of
controls.

II. When substantive procedures alone do not provide sufficient appropriate audit
evidence at the assertion level.
Response: Either I or II
Correct answer: Either I or II
Score: 1 out of 1 Yes

Question 20
Which of the following fraudulent activities most likely could be perpetrated due to lack
of effective control in the revenue cycle?
Response: Authorization of credit memos by personnel who receives cash may permit
the misappropriation of cash.
Correct answer: Authorization of credit memos by personnel who receives cash may
permit the misappropriation of cash.
Score: 1 out of 1 Yes

Question 21

_____
Response: 2825000
Correct answer: 2825000
Score: 1 out of 1 Yes

Question 22

_____
Response: 1920000
Correct answer: 2070000
Score: 0 out of 1 No

Question 23
Which of the following is the most effective control procedure to detect vouchers that
were prepared for the payment of goods that were not received?
Response: Match the purchase order, receiving report and vendor's invoice for each
voucher in accounts payable department
Correct answer: Match the purchase order, receiving report and vendor's invoice for
each voucher in accounts payable department
Score: 1 out of 1 Yes

Question 24

_____
Response: 642500
Correct answer: 699500
Score: 0 out of 1 No

Question 25
Which procedure is an auditor most likely to use to detect a check outstanding at year-
end that was not recorded as outstanding on the year end bank reconciliation?
Response: Receive a cutoff statement directly from the client's bank.
Correct answer: Receive a cutoff statement directly from the client's bank.
Score: 1 out of 1 Yes

Question 26
 Which of the following is an example of an inherent limitation in a client's internal
control system?
Response: In the performance of most control procedures, there are possibilities of
errors arising from mistakes in judgment.
Correct answer: In the performance of most control procedures, there are possibilities of
errors arising from mistakes in judgment.
Score: 1 out of 1 Yes

Question 27
Which of the following statements is/are correct?

Statement 1: On recurring audits, the auditor should consider whether circumstances

require the terms of the engagement to be revised and whether there is a need to
remind the client of the existing terms of engagement.

Statement 2: The auditor should send a new engagement letter each year to an
established client.
Response: Only statement 1 is correct
Correct answer: Only statement 1 is correct
Score: 1 out of 1 Yes

Question 28

Required: Compute for the adjusted balance of the following:

1. Cash in bank, January 31 _____

2. Cash receipts _____
Response: 246300
Response: 297000
Correct answer: 246300, 296700
Score: 1 out of 2

Question 29
The primary purpose of the auditor's consideration of internal control is to
provide a basis for
Response: Determining the nature, timing and extent of audit tests to be applied
Correct answer: Determining the nature, timing and extent of audit tests to be applied
Score: 1 out of 1 Yes

Question 30

_____
Response: 9450
Correct answer: 4640
Score: 0 out of 1 No

Question 31
 Questions:
1. Deposit in transit, February 28 _____
2. Unadjusted bank disbursements in February _____
3. Adjusted Cash receipts in February _____
4. Adjusted cash in bank balance on February 28 _____
5.
6.
Response: 9500
Response: 80100
Response: 155000
Response: 284000
Correct answer: 13500, 87800, 155000, 281400
Score: 1 out of 4

Question 32
 Based on the preceding information, determine the following:
1. Adjusted cash balance on November 30 _____
2. Deposit in transit on December 31 _____
3. Adjusted cash balance on December 31 _____
Response: 89300
Response: 49000
Response: 634200
Correct answer: 89300, 49000, 634200
Score: 3 out of 3 Yes

Question 33
Which of the following is not normally considered an act of concealing cash shortage?
Response: Banking
Correct answer: Banking
Score: 1 out of 1 Yes
Question 34
A The purpose of segregating the duties of hiring personnel and distributing payroll
checks is to separate the
Response: Authorization of transactions from the custody of related assets
Correct answer: Authorization of transactions from the custody of related assets
Score: 1 out of 1 Yes

Question 35
Which of the following control procedures would most likely assure that access to
shipping, billing, inventory control, and accounting records is restricted to personnel
authorized by management?
Response: Segregate responsibilities for authorization, execution and recording, and
prenumber and control custody of documents
Correct answer: Segregate responsibilities for authorization, execution and recording,
and prenumber and control custody of documents
Score: 1 out of 1 Yes

Question 36
The objectives of the internal structure for a production cycle are to provide
assurance that transactions are properly executed and recorded, and that
Response: Custody of work in process and of finished goods is properly maintained
Correct answer: Custody of work in process and of finished goods is properly
maintained
Score: 1 out of 1 Yes

Question 37
The overall objective in the audit of the sales and collection cycle is to
evaluate whether
Response: The account balances affected by the cycle are fairly presented in
accordance with GAAP.
Correct answer: The account balances affected by the cycle are fairly presented in
accordance with GAAP.
Score: 1 out of 1 Yes

Question 38
The primary assertion being addressed by sending bank confirmation is
Response: Existence
Correct answer: Completeness
Score: 0 out of 1 No

Question 39
Set the following phases in proper order:

I. Pre-Engagement
II. Internal Controls
III. Evidence-Gathering
IV. Completing the Audit
V. Planning
VI. Post Audit Responsibilities
VII. Reporting
Response: I, V, II, III, IV, VII, VI
Correct answer: I, V, II, III, IV, VII, VI
Score: 1 out of 1 Yes

Question 40
/files/7125754/Petty_cash_problem.pdf

Required: Compute the amount of cash shortage. _____

Response: 1830
Correct answer: 2890
Score: 0 out of 1 No

Question 41

_____
Response: 97000000
Correct answer: 9700000
Score: 0 out of 1 No

Question 42
Which of the following statements is/are correct?

Statement 1: According to PSA 300, the auditor may discuss elements of planning with
those charged with governance and the entity's management.

Statement 2: The audit plan sets the scope, timing and direction of the audit guides the
development of the more detailed overall audit strategy.
Statement 3: The overall audit strategy is more detailed than the audit plan and includes
the nature, timing and extent of audit procedures to be performed engagement team
members to obtain sufficient appropriate audit evidence to reduce audit risk to an
acceptably low level.
Response: Only one statement is correct
Correct answer: Only one statement is correct
Score: 1 out of 1 Yes

Question 43
Which of the following control procedures could prevent or detect errors or frauds
arising from shipments made to unauthorized parties?
Response: Prepare and periodically update lists of authorized customers.
Correct answer: Prepare and periodically update lists of authorized customers.
Score: 1 out of 1 Yes

Question 44
In developing the overall audit strategy, the focus of the engagement team's efforts is
considered. Which of the following is not appropriately classified as a factor affecting the
focus of the team's efforts?
Response: The financial reporting framework on which the financial information to be
audited has been prepared, including any need for reconciliation to another reporting
framework.
Correct answer: The financial reporting framework on which the financial information to
be audited has been prepared, including any need for reconciliation to another reporting
framework.
Score: 1 out of 1