To audit the existence of a bank deposit, what procedure is the best?

1 point

A. Find the transaction on the transaction list and find the related deposit slip.

B. Find the deposit slip and check it if it is included in the transaction list.

C. Count the number of the deposit slip.

D. Ask the auditee to present you all the aggregated deposit slips

E. Count the cash

The preliminary risk assessed in auditing a bank is most likely used in which of the following? *

1 point

A. Creating standardized general audit procedure to be included in the audit charter

B. Used as a guide in manipulating control risk

C. Used as a guide in increasing the detection risk

D. Used in budgeting the fund provided for the whole course of audit

E. All of the Above

The risk of fraudulent financial reporting in a bank increases in the presence of*

1 point

A. Decrease in target operating income.

B. Improved control systems.

C. Increased tax rate on improperly accumulated earnings tax

D. Frequent changes in suppliers.

E. None of the Above

Fixed, savings and current deposits of money in banks and similar institutions shall be governed
by the provisions concerning*

1 point

A. Necessary Deposits

B. Legal Deposits

C. Simple Loan

D. Commodatum
In evaluating the effectiveness of a banks’ credit and  collection policies, the ratio most likely to
be used by an auditor is                                                      *

1 point

A. Days sales outstanding

B. Quick ratio.

C. Working capital turnover.

D. Return on sales.

E. Return on accounts receivable

Further relevant factors that influence the auditor’s consideration of when to*

1 point

A. The control environment

B. When relevant information is available

C. The nature or the risk

D. The period or date to which the audit evidence relates

E. All of the Above

Why do auditors establish a preliminary judgement about materiality?*

1 point

A. To determine the appropriate extent of audit procedure required for the work

B. So that the client can know what records to make available to the auditor

C. To plan the appropriate audit evidence not needed for the overall audit strategy

D. To finalize the assessment of control risk

Money laundering means*

1 point

A. Conversion of assets to invest in laundromats

B. Conversion or money which is illegally obtained to make them legitimate

C. Conversion of cash into gold to make legitimate

D. Conversion of assets into cash to make them legitimate

What risk is involved regarding the risk classification of a bank of their clients?*
1 point

A. Diligence accorded might be incorrect

B. ID presented might be fake

C. Money deposited are dirty money

D. Any of the Above

After obtaining an understanding of the client’s internal control, the auditor should  consider
whether*

1 point

A. The projected degree of effectiveness of internal control is justified.

B. The evidential matter obtained from the study of the internal control system can provide a reasonable
basis for an opinion.

C. Further testing of internal control procedures is likely to permit further reduction of assessed control risk.

D. Sufficient knowledge has been obtained about the entity's entire system of internal control.

What does D is DOSRI represent?*

1 point

A. Dividends

B. Directors

C. Discounts

D. Depreciation

The auditor’s assessment of the identified risks at the assertion level provides a basis for
considering the appropriate audit approach for designing and performing further audit
procedures. Which of the following is incorrect?*

1 point

A. The auditor may determine that only by performing tests of controls may the auditor achieve an effective
response to the assessed risk of material misstatement for a particular assertion.

B. The auditor may determine that performing only substantive procedures is appropriate for specific
assertions and, therefore, the auditor excludes the effect of controls from the relevant risk assessment.

C. The auditor needs to be satisfied that performing only substantive procedures for the relevant assertion
would be effective in reducing the risk of material misstatement to an acceptably low level.

D. The auditor designs and performs substantive procedures for each material class of transactions,
account balance, and disclosure only when the auditor uses the substantive approach.

Auditors begin their assessments of inherent risk during audit planning. Which of the following
would least likely help in assessing inherent risk during the planning phase?*
1 point

A. Obtaining knowledge about the client’s number of board of directors

B. Touring the client’s plant and offices

C. Identifying related parties

D. Obtaining knowledge about the client’s history whenever there is audit engagement

During analytical procedure conducted in the course of risk assessment, there was evidence that
the number of the risk score sheet printed and serialized do not correspond with the number of
newly opened deposit account. What procedure might satisfy then the previously conducted
analytical procedure so that risk can already be ascertained?*

1 point

A. Sample audit the attached filled out risk score sheets

B. Count the number of newly opened deposit accounts and the number of attached filled out risk score
sheet

C. Review the bank’s policy with regards their internal control on the conduct and documentation or risk
scoring

D. No further procedure must be done as it already poses high risk.

The main purpose of risk assessment procedures is to*

1 point

A. Obtain an understanding of the entity and its environment, including its internal control, to assess the
risks of material misstatement at the financial statement and assertion levels.

B. Test the operating effectiveness of controls in preventing, or detecting and correcting, material
misstatements at the assertion level.

C. Detect material misstatements at the assertion level.

D. All of the above.

The diligence required to be performed by a bank*

1 point

A. Diligence of a good father of a family

B. Due Diligence

C. Extra-ordinary diligence

D. Utmost diligence

Audit findings provides that the compliance department of the covered institution does not send
the reports for covered and suspicious transactions within the time provided by the law for the
reason that they are only waiting for said reports to be reported to them by the operating
branches, thus, their submission of report will be delayed if the operating branches is in delay in
sending to them said reports. Which of the following is correct with regards to risk assessment? *

1 point

A. Current situation will pose low risk to the covered institution since the delay is not the fault of the
compliance department.

B. There is an inherent risk leading to high risk because the bottom line is that the bank was not able to
comply with the regulation of the AMLC.

C. High risk is present as there is a poor internal control.

D. All of the Above are correct

Auditor Zankuh N. Ang-galing, CPA, is assigned to audit the source document related to bank
deposits. As part of the audit objective, the auditor needs to ascertain that there is no erroneous
cross deposits. What procedure is proper?*

1 point

A. Review the deposit slips as to whether or not it was signed by the depositor, whether or not the amount
in words and in figures written by the depositor on the deposit slip is the same, and whether or not the
account number indicated by the depositor therein is included in the list of accounts in the bank.

B. Check the cash breakdown on the deposit slips to determine whether or not there was a cash overage or
shortage.

C. Review the list of transactions and total the amount of deposits therein. Afterwards, total also the
amount of deposits and match the balance of the two.

D. Observe the bank teller on whether he/she transacts with all the depositors.

E. Check the validation on the bank’s copy of deposit slip and match it on the details written by the
depositor in the deposit slip.

The audit team of Search Pa More Gwapo-A-Audits assigned to audit Buhay Ka Pa Kaya Bank
found out a discrepancy on the balance of deposits in the subsidiary ledger and on the general
ledger. When they have reviewed the latest past audit held two years ago, there were no
findings as to such discrepancy. One of the auditors surmise that there might be an escheated
bank account to which is not reported on the general ledger. What audit procedure is best to
determine whether there is indeed an unreported escheated account?*

1 point

A. Inquire from the teller and bank accountant on whether they have client who’s account was never
deposited nor withdrawn fund against.

B. Check the list of dormant accounts as of last audit and match it with the list of reactivated and closed
accounts reactivated and closed from the last audit up to the audit’s cut-off date.

C. Ask for external information from the National Treasury whether the bank indeed has notify them of an
escheated account and that the same was remitted to them.
 D. Send a positive confirmation from bank depositors asking if they have not visited the bank for a period of
ate least more than 10 years.

E. Review the list of newly opened deposit accounts within the cut-off period of the audit.

During the first day of audit, on the same day the engagement letter is presented, you have
observed that the opening of three personal bank deposit account was conducted by a only one
person, who represented himself as the agent of the three. The opened bank accounts were
named before the three different persons and the related application form and signature card
were already filled out by them and was merely brought by the ‘agent’ to the bank. Which is
correct?*

1 point

A. Such may pose an inherent risk

B. Such may pose high risk

C. No risk is involved as the agent is empowered to act on behalf of his principal

D. All are correct

Which of the following does not characterize a bank or banking institution?*

1 point

A. Authorized to engage in lending of funds

B. Funds for lending are obtained mainly from private institutions.

C. Funds are from receipt of deposits or sale of bonds

D. It conducts banking activities on a regular basis

What risk is present regarding a situation where all withdrawal slips are approved by the bank
teller?*

1 point

A. Misappropriation

B. Fraudulent reporting

C. Incorrect deposit balances

D. Cash shortages

E. All of the Above

To what extent do auditors typically rely on internal controls of a covered institution?*

1 point

A. Most of the time

 B. Sometimes

C. Never

D. Extent of time

Mr. Ramos, a long-time client of Bank of Isabela, went to withdraw from his passbook account.
To his surprise, he forgot his passbook, but fortunately, Mr. Lily, the bank teller has allowed
withdrawal since he personally knew Mr. Ra,mos. What is the best audit procedure that may be
made in order to know whether there are withdrawals without presentation of passbook?*

1 point

A. Check the CCTV if Mr. Ramos is carrying his passbook.

B. The auditor must call Mr. Ramos and personally asked about it.

C. Check the records in the system if the passbook of Mr. Ramos is updated as of such withdrawal and that
the validation of such withdrawal was printed.

D. Contact Mr. Ramos and check the passbook itself.

E. No audit procedure needed. Withdrawal without passbook is allowed.

Newly-opened deposit accounts is an area by which is*

1 point

A. Inherently Low Risk

B. Inherently High Risk

C. High Risk

D. Low Risk