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Auditing Principles & Practice II Questions Part One
Auditing Principles & Practice II Questions Part One
22. It is a document that is matched with the customer order to assure that the correct quantity and type of
goods are shipped.
A. Sales order C. Vendor invoice
B. Customer order D. Sales invoice
23. Which of the following is not a substantive test?
A. Bank confirmations C. Account reconciliations
B. Document matching D. Manager interviews
24. Identify types of procedures that an auditor might use when carrying out test of controls?
A. Inquiries of appropriate entity personnel.
B. Inspection of documents, reports, or electronic files, indicating performance of the control.
C. Observation of the application of the control.
D. Reperformance of the application of the control by the auditor, including CAATs
E. All of the above
25. Which one is an audit procedure used to determine whether internal controls effectively prevent or
discover material misstatements at the appropriate assertion level?
A. Test of control C. Internal control
B. Substantive test D. None of the above
26. Among the following, which one is not the documents and records of sales and collection cycle?
B. Customer Order E. Sales invoice
C. Sales Order F. None of the above
D. Shipping Document
27. Tracing recorded sales transactions in the sales journal to the shipping documents (bills of lading)
provides evidence about the:
A. Completeness of recording of sales transactions.
B. Occurrence of sales transactions.
C. Billing of all sales transactions.
D. Presentation of payables.
28. Which of the following is an account that is Not affected by the payroll and personnel cycle?
A. Salary expense C. Pension payable
B. Allowance for doubtful accounts D. Tax payable
29. A sample in which every possible combination of items in the population has an equal chance of
constituting the sample is a
A. Random sample. C. Judgment sample.
B. Statistical sample. D. Representative sample
30. Which of the following is NOT a common sampling technique in auditing?
A. Random sampling C. Systematic sampling
B. Block sampling D. Biased sampling
31. How the auditor shall treat, if the he/she is unable to apply the designed audit procedures, or suitable
alternative procedures to a selected item?
A. Treat as a deviation from the prescribed control, in the case of tests of controls
B. Treat as a misstatement, in the case of tests of details.
C. Treat as a misstatement, in both cases of test of control and tests of details
D. A and B
32. Which of the following is true about the type of risk that the auditor’s conclusion based on a sample
may be different from the conclusion if the entire population were subjected to the same audit
procedure?
A. Inherent risk D. Detection risk
B. Sampling risk E. All of the above
C. Control risk
33. Which one is best describe the objectives of audit sampling?
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Hawassa University, College of Business & Economics, Accounting And Finance
Auditing Principles and Practices II Questions from Chapter 1 to 3
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Hawassa University, College of Business & Economics, Accounting And Finance
Auditing Principles and Practices II Questions from Chapter 1 to 3
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Hawassa University, College of Business & Economics, Accounting And Finance
Auditing Principles and Practices II Questions from Chapter 1 to 3
C. Ascertain that collections from deductibles have been paid to the correct beneficiary account in full
and in a timely manner.
D. Receivables ledger personnel should be independent of dispatch and cash receipt functions.
54. Which one of the following indicate substantive test of transactions for sales as audit objective of
“posting and summarization”?
A. Trace selected sales invoices from the sales journal to the accounts receivable master file and test
for amount, date, and invoice number.
B. Compare date of recording of sale in sales journal with sales invoice and bill of lading (shipping
document).
C. Vouch details on sales invoices to shipping documents, sales order and customer order.
D. Trace selected shipping documents to the sales journal to be sure that each one is included.
55. One of the following is different;
A. Evidence that pricing, extensions, and footings are checked.
B. Amount and other data on the sales invoice agree with the sales journal entry.
C. Quantity and other data on the customer order agree with the sales invoice.
D. Quantity of goods shipped differs from quantity on the sales invoice.
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Hawassa University, College of Business & Economics, Accounting And Finance
Auditing Principles and Practices II Questions from Chapter 1 to 3
5) List and discuss applicable assertions (balance-related audit objectives) in designing tests of details
of balances for accounts receivable.
6) List and discuss assertions used by the auditor in payroll and personnel cycle.
ANSWER SHEET
1. 2. 3. 4. 5.
6. 7. 8. 9. 10.
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Hawassa University, College of Business & Economics, Accounting And Finance
Auditing Principles and Practices II Questions from Chapter 1 to 3
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