AUDI

TINGTHEORYMCQBYSALOSAGCOL
CHAPTER1

1
. Br
oadl
ydef
ined,t
hesubj
ectmat
terofanyaudi
tconsi
stof

a.Fi
nanci
alst
atement
s

b.Economi
cdat
a

c.As
ser
ti
ons

d.Oper
ati
ngdat
a

2.Anaudi
toff
inanci
alst
atement
sisconduct
edt
odet
ermi
nei
fthe

a.Or
gani
zat
ioni
soper
ati
ngef
fi
ciencyandef
fect
ivel
y

b.Audi
teeisf
oll
owi
ngspeci
fi
cpr
ocedur
esorr
ulessetdownbysomehi
gher
aut
hori
ty

c.Over
all
financialstat
ementstat
ement
sarest
atedi
naccor
dancewi
tht
he
appl
i
cablefinancialrepor
ti
ngfr
amework

d.Cl
i
ent
’si
nter
nal
cont
rol
isf
unct
ioni
ngasi
ntended

3.Mostofthei
ndependentaudi
tor
’swor
kinf
ormul
ati
nganopi
niononf
inanci
alst
atement
consi
stof

a.St
udyi
ngandeval
uat
ingi
nter
nal
cont
rol

b.Obt
aini
ngandexami
ningevi
dent
ial
mat
ter

c.Exami
ningcasht
ransact
ion

d.Compar
ingr
ecor
dedaccount
abi
l
it
ywi
thasset
s

4.I
nfi
nanci
alst
atementaudi
ts,t
heaudi
tpr
ocessshoul
dbeconduct
edi
naccor
dancewi
th

a.Theaudi
tpr
ogr
am

b.Phi
l
ippi
nest
andar
donaudi
ti
ng

c.Phi
l
ippi
neaccount
ingst
andar
ds

d.Phi
l
ippi
neFi
nanci
alRepor
ti
ngSt
andar
ds

5.Whi
choft
hef
oll
owi
ngbestdescr
ibet
heoper
ati
onal
audi
t?
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
a.I
trequi
restheconst
antrevi
ewbyi
nter
nal
audit
orsoft
headmi
nist
rat
ivecont
rol
s
astheyrel
atet
ooperati
onsoft
hecompany.

b.I
tconcentr
atesoni
mplement
ingf
inanci
alandaccount
ingcont
rol
inanewl
y
or
ganizedcompany.

c.I
nattemptsandisdesi
gnedt
over
if
ythef
airpr
esent
ati
onofacompany’
sresul
ts
ofoperat
ions.

d.I
tconcent
rat
esonseeki
ngoutaspectsofoper
ati
onsi
nwhi
chwast
ewoul
dbe
r
educedbythei
ntr
oducti
onofcontr
ols.

6.Theaudi
torcommuni
cat
est
her
esul
tsofhi
sorherwor
kthr
ought
hemedi
um i
fthe

a.Engagementl
ett
er

b.Audi
trepor
t

c.Managementl
ett
er

d.Fi
nanci
alst
atement

7.Whichofthefol
l
owingt
ypesofaudi
ti
ngi
sper
for
medmostcommonl
ybyCPA’
sona
cont
ract
ualbasi
s?

a.I
nter
nal
Audi
ti
ng

b.I
ncomet
axaudi
ti
ng

c.Gover
nmentaudi
ti
ng

d.Ext
ernal
audi
ti
ng

8.I
ndependentaudi
ti
ngcanbestbedescr
ibeasa

a.Pr
ofessi
onal
act
ivi
tyt
hatmeasur
esandcommuni
cat
esf
inanci
alaccount
ingdat
a

b.subsetaccount
ing

c.Pr
ofessi
onal
act
ivi
tyt
hatat
testt
othef
airpr
esent
ati
onoff
inanci
alst
atement

d.Regul
ator
yact
ivi
tyt
hatpr
event
sthei
ssuanceofi
mpr
operf
inanci
ali
nfor
mat
ion

9.Whichofthefoll
owi
ngst
atement
sisnotadi
sti
nct
ionbet
weeni
ndependentaudi
tor
sand
i
nter
nalaudi
tors?
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
a.I
ndependentaudi
torsrepr
esentthi
rdpart
yuser
sext
ernalt
otheaudi
teeent
it
y,
wher
easinter
nalaudit
orsrepor
tdir
ectl
ytomanagement.

b.Al
thoughindependentaudi
tor
sst
ri
vef
orbothval
i
dit
yandrelevanceofevi
dence,
i
nter
nalaudit
orsareconcer
nedal
mostexcl
usi
vel
ywithval
i
dity.

c.I
nter
nalaudi
tor
sareemployeesoft
heaudi
tee,wher
easi
ndependentaudi
tor
sar
e
i
ndependentcont
ract
ors
.

d.Theint
ernalaudi
tor
’sspanofcoveragegoesbeyondf
inanci
alaudi
ti
ngt
o
encompas soper
ati
onalandperfor
manceauditi
ng.

1
0.Whi
chofthefol
l
owi
nghasthepr
imaryrespons
ibi
li
tyf
ort
hef
air
nessoft
he
r
epr
esent
ati
onsmadei
nthefi
nanci
alst
atements?

a.Cl
i
ent
’smanagement

b.Audi
tCommi
tt
ee

c.I
ndependentaudi
tor

d.Boar
dofAccount
ancy

1
1.Anauditoft
hef
inancial
statementsofKI
ACor
por
ati
oni
sbei
ngconduct
edbyanext
ernal
audi
tor
.Theext
ernalaudit
orisexpect
edto

a.expr
essanopi
nionast
othef
air
nessofKI
A’sf
inanci
alst
atement
s.

b.expr
essanopi
nionast
otheat
tr
act
ivenessofKI
Afori
nvest
mentpur
poses.

c.cer
ti
fyt
hecor
rect
nessofKI
A’sFi
nanci
alSt
atement
s.

d.exami
neal
levi
dencesuppor
ti
ngKI
A’sf
inanci
alst
atement
s.

1
2.Whichoft
hef
oll
owi
ngst
atement
sabouti
ndependentf
inanci
alst
atement
saudi
tis
cor
rect
?

a.Theauditoff
inanci
alst
atement
srel
i
evesmanagementofi
tsr
esponsi
bil
i
ti
esf
or
thef
inanci
alstat
ement

b.Anaudi
tisdesi
gnedt
oprovidel
imi
tedassurancet
hatt
hef
inanci
alst
atement
s
t
akenasawholearefr
eefrom mat
eri
almisstat
ement

c.Theprocedur
esrequi
redtoconductanaudi
tinaccor
dancewithPSAsshoul
dbe
det
erminedbythecli
entwhoengagedtheservi
cesoftheaudi
tor
.
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
d.Theauditor’
sopinionisnotanassuranceastot
hefut
urevi
abi
li
tyoft
heenti
tyas
wellastheeffect
ivenessandeffi
ciencywit
hwhichmanagementhasconduct
ed
theaff
airsoftheentit
y.

1
3.Ther
easonani
ndependentaudi
torgat
her
sevi
dencei
sto

a.For
m anopi
nionont
hef
inanci
alst
atement
s

b.Det
ectf
raud

c.Eval
uat
emanagement

d.Eval
uat
eint
ernal
cont
rol
s

1
4.Anatt
itudethati
ncl
udesaquest
ioni
ngmi
ndandcr
it
ical
assessmentofaudi
tevi
dencei
s
ref
err
edt oas

a.Duepr
ofessi
onal
car
e

b.Pr
ofessi
onal
skept
ici
sm

c.Reasonabl
eassur
ance

d.Super
visi
on

1
5.Jackhasbeenretai
nedasaudi
torofEVCCompany.Thef
unct
ionofJack’
sopi
nionon
fi
nanci
alst
atementsofEVCCompanyisto

a.I
mpr
ovef
inanci
aldeci
si
onsofcompanymanagement

b.LendCr
edi
bil
i
tyt
omanagement
’
srepr
esent
ati
on

c.Det
ectf
raudandabusei
nmanagementoper
ati
ons

d.Ser
ver
equi
rement
sofBI
R,SEC,orCent
ral
Bank

1
6.Whi
choft
hef
oll
owi
ngi
snotoneoft
hel
i
mit
ati
onsofanaudi
t?

a.Theuseoft
est
ing

b.Li
mit
ati
onsi
mposedbycl
i
ent

c.Humaner
ror

d.Nat
ureofevi
dencet
hatt
heaudi
torobt
ains
 AUDI
TINGTHEORYMCQBYSALOSAGCOL

1
7.Whi
choft
hef
oll
owi
ngst
atement
sdoesnotpr
oper
lydescr
ibeal
i
mit
ati
onofanaudi
t?

a.Manyauditconcl
usi
onsar
emadeont
hebasi
sofexami
ningasampl
eof
evi
dence.

b.Someevidencesuppor
ti
ngpesor
epresentat
ioni
nthef
inanci
alst
atementmust
beobt
ainedbyoralorwri
tt
enr
epr
esentat
ionofmanagement.

c.Fat
iguecancauseaudi
tor
stoover
lookper
ti
nentevi
dence.

d.Manyf
inanci
alst
atementasser
ti
onscannotbeaudi
ted.

1
8.Whichoft
hefol
l
owi
ngi
snotoneoft
hegener
alpr
inci
plesgover
ningt
heaudi
toff
inanci
al
st
atement
s?

a.Theaudit
orshoul
dpl
anandper
for
mtheaudi
twi
thanat
ti
tudeofpr
ofessi
onal
skept
ici
sm.

b.Theaudi
torshoul
dobtai
nsuffi
cientappr
opr
iat
eevidenceprimar
il
ythrough
i
nqui
ryandanalyt
ical
procedur
et obeablet
odr awreasonabl
econclusi
ons.

c.Theaudi
torshoul
dconductt
heaudi
ti
naccor
dancewi
thPSA.

d.Theaudi
torshoul
dcompl
ywi
tht
hePhi
l
ippi
neCodeofPr
ofessi
onal
Ethi
cs.

1
9.Whi
chofthefol
l
owi
ngst
atement
sdoesnotdescr
ibeacondi
ti
ont
hatcr
eat
esademand
f
oraudi
ti
ng?

a.Conf
li
ctbetweenani
nfor
mat
ionpr
epar
erandausercanr
esul
ti
nbi
ased
i
nfor
mation.

b.I
nfor
mat
ioncanhavesubst
ant
ial
economi
cconsequencef
oradeci
si
on-
maker
.

c.Exper
ti
sei
sof
tenr
equi
redf
ori
nfor
mat
ionpr
epar
ati
onandver
if
icat
ion.

d.User
scandi
rect
lyassesst
hequal
i
tyofi
nfor
mat
ion.

20.
Whi choft
hefol
lowi
ngstat
ement
sdoesnotpr
oper
lydescr
ibeanel
ementoft
heor
eti
cal
frameworkofaudi
ti
ng?

a.Thedat
atobeaudi
tedcanbever
if
ied.

b.Shor
t-t
erm conf
li
ctsmayexistbet
weenmanger
swhopr
epar
ethedat
aand
audi
tor
swhoexami nethedata.
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
c.Audi
tor
sactonbehal
foft
hemanagement
.

d.Anaudi
tbenef
it
sthepubl
i
c

CHAPTER2

1
. Anintent
ional
actbyonemorei
ndivi
dualsamongmanagement ,employees
,ort
hir
d
par
tieswhichresul
tsi
nmisr
epr
esentat
ionoff
inanci
alst
atementref
ersto

a.Er
ror

b.Noncompl
i
ance

c.Fr
aud

d.I
l
legal
act
s
 AUDI
TINGTHEORYMCQBYSALOSAGCOL

2.Theresponsi
bil
it
yfort
hedetect
ionandpr
event
ionofer
ror
s,f
raudandnoncompl
i
ance
wit
hlawsandr egul
ati
onsr
estswit
h

a.Audi
tor

b.Cl
i
ent
’sl
egal
counsel

c.Fr
aud

d.I
l
legal
act
s

3.Theaudit
or’
sbestdef
ensewhenmat
eri
almi
sst
atement
sint
hef
inanci
alst
atement
sar
e
notuncover
edintheaudi
ti
sthat

a.Theauditwasconduct
edi
naccor
dancewi
thgener
all
yaccept
edaccount
ing
pri
nci
ples

b.Cl
i
enti
sgui
l
tyofcont
ri
but
orynegl
i
gence

c.Theaudi
twasconduct
edi
naccor
dancewi
thPSAs

d.I
ssui
ngar
epr
esent
ati
onl
ett
ert
otheaudi
tor

4.Thef
oll
owings t
atement
srelat
etotheaudi
tor
’sr
esponsi
bil
i
tyf
ort
hedet
ect
ionofer
ror
s
andf
raud.Ident
if
ythecorr
ectstat
ements.

I
. Duetotheinher
entl
i
mi t
ati
onoftheaudit
,ther
eisapossi
bil
i
tyt
hat
mater
ialmi
sstat
ementsinthef
inanci
alst
atementsmaynotbe
det
ected.

I
I. Thesubsequentdi
scoveryofmateri
almisst
atementofthefinanci
al
i
nformati
onresul
ti
ngfrom f
raudorerrordoesnot,i
nit
self
,indicat
e
thatt
heaudit
orfai
ledt
of ol
l
owt hebasicpri
ncipl
esandessential
procedur
esofanaudit.

a.Ionl
y

b.Bot
hSt
atement
sar
etr
ue

c.I
Ionl
y

d.Bot
hst
atement
sar
efal
se

5.Whatpr
imar
il
ydi
ff
erent
iat
esf
raudf
rom aner
ror
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
a.Mat
eri
al
it
y

b.Ef
fectonmi
sst
atement
s

c.I
ntent

d.Fr
equencyofoccur
rence

6.Theter
m“ err
or”ref
erst
ouni
ntent
ional
misr
epr
esent
ati
onoff
inanci
ali
nfor
mat
ion.
Examplesoferr
orsarewhen

I
. Asset
shavebeenmi
sappr
opr
iat
ed

I
I. Tr
ansact
ionswi
thoutsubst
ancehavebeenr
ecor
ded

I
II
. Recor
dsanddocument
shavebeenmani
pul
atedandf
alsi
fi
ed

I
V. Theef
fect
soft
het
ransact
ionhavebeenomi
tt
edf
rom t
her
ecor
ds

a.al
loft
heabovest
atement
sar
etr
ue

b.onl
yst
atement
sIandI
IIar
etr
ue

c.al
loft
heabovest
atement
sar
efal
se

d.onl
yst
atementI
IandI
Var
etr
ue

7.Whi
choft
hef
oll
owi
ngbesti
dent
if
iest
het
wot
ypesoff
raud?

a.Thef
tofasset
sandempl
oyeef
raud.

b.Mi
sappr
opr
iat
ionofassetanddef
alcat
ion.

c.Managementf
raudandempl
oyeef
raud.

d.Fr
audul
entf
inanci
alr
epor
ti
ngandmanagementf
raud.

8.Whichoft
hefol
lowingstat
ement
sbestdescr
ibeanaudi
tor
’sr
esponsi
bil
i
tyt
o
det
ecterr
ors andfraud?

a.Anaudit
orshouldassesst heri
skt
haterror
sandf r
audmaycauset he
fi
nanci
alst
atementst ocontai
nmateri
almisst
atementsandshoul
ddesign
t
heaudittoprovi
der easonabl
eassuranceofdetecti
ngerr
orsandfraud
t
hatarematerial
tothef i
nanci
alst
atements.

b.Anaudi
tori
sresponsibl
etodetectmat
erial
err
ors,buthasnoresponsi
bil
i
ty
t
odetectmater
ial
fraudthatar
econcealedthr
oughempl oyeecol
lusi
onor
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
managementover
ri
deoft
hei
nter
nal
cont
rol
str
uct
ure.

c.Anaudi t
orhasnor esponsi
bil
i
tytodet
ecterror
sandf raudunlessanal
yti
cal
proceduresortestsoftr
ansacti
onsi
denti
fycondit
ionscausinga
reasonablyprudentaudi
tort
osuspectthatt
hefinanci
al st
atementswere
mat er
ial
l
ymi sst
ated.

d.Anaudit
orhasnoresponsi
bil
i
tyt
odetecter
ror
sandfraudbecausean
audi
tori
snotani
nsurerandanaudi
tdoesnotconst
it
uteaguarant
ee.

9.“Theaudi
torwouldordi
nari
l
yexpecttof
indevi
dencetosupportmanagement
repres
entat
ionsandnotassumethatt
heynecessar
il
ycorr
ect”
.Thisi
sanexampl
eof

a.Unpr
ofessi
onal
behavi
or

b.Anat
ti
tudeofpr
ofessi
onal
skept
ici
sm

c.Duedi
l
igence

d.Ar
ulei
ncodeofpr
ofessi
onal
conduct
.

1
0.Whi
choft
hef
oll
owi
ngst
atementi
str
ue?

a.I
tisusual
lyeasi
erfortheauditortouncoverfr
audthanerror
s.
b.I
tisusual
lyeasi
erfortheauditortouncovererr
orsthanfr
aud.
c.I
tisusual
lyequal
lydif
ficul
tfortheaudi
tortouncovererr
orsorfraud.
d.Usuall
y,t
heauditordoesnotdesi gnprocedur
estouncoverfraudorerr
ors
.

1
1.Themostdiffi
culttypeofmisstat
ementtodetecti
sfr
audbasedon
a.Theoverrecor di
ngoftransact
ion
b.Thenon- r
ecor di
ngoftransact
ions
c.Recordedt r
ansacti
onsinsubsidi
ari
es
d.Rel
atedpar tyrecei
vabl
e

12.Ifanaudi
torwasengagedtodiscovererr
orsorf
raudandtheaudi
torper
for
med
extensi
vedet
ailwor
k,whichofthefoll
owingcoul
dtheaudit
orbeexpectedt
odetect
?

a.Misposti
ngi frecordedtr
ansact
ions
b.Unrecordedt ransacti
on
c.Counterfei
tsignaturesonpaidchecks
d.Coll
usivefraud

1
3.Whi
choft
hef
oll
owi
ngst
atement
sisi
ncor
rect
?

a.Theresponsi
bil
i
tyf
ort
hepr
event
ionanddet
ect
ionoff
raudander
rorr
est
s
wit
hmanagement .

b.Theaudi
torisnotandcannotbehel
dresponsi
blef
ort
hedet
ect
ionof
fr
audorerror.
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
c.I
nplanni
nganaudit
,theaudit
orshoul
dassesst
heri
skthatfr
audorerr
or
maycausethef
inanci
alst
atementstocont
ainmat
eri
almisst
atement
.

d.Theri
skofnotdet
ectingmat er
ial
fraudishi
ghert
hanther
iskofnot
det
ecti
ngamat er
ial
mi sst
atementarisi
ngfr
om er
ror
.

1
4.Whi
choft
hef
oll
owi
ngst
atementaboutf
raudorer
rori
sincor
rect
?

a.Theaudi
tori
snotandcannotbehel
dresponsi
blef
ort
hepr
event
ionof
fr
audanderror
.

b.Theresponsi
bil
i
tyf
ort
hepr
event
ionanddet
ect
ionoff
raudander
rorr
est
s
wit
hmanagement .

c.Theaudi torshouldplanandperf
ormtheauditwi
thanatt
it
udeof
professionalskepti
cism,r
ecogni
zingt
hatcondi
ti
onsorevent
smaybe
foundt hatfr
audorer r
ormayexi
st.

d.Theli
kel
i
hoodofdet
ect
ingf
raudi
sor
dinar
il
yhi
ghert
hant
hatofdet
ect
ing
err
or.

15.Whi
chofthef
oll
owingi
snotanassur
ancet
hatt
heaudi
tor
sgi
vet
othepar
ti
es
whorel
yonthefi
nanci
alst
atement
s?

a.Audit
orsknowhowtheamount
sanddi
scl
osur
esi
nthef
inanci
al
st
atementswer
eproduced.

b.Audi
tor
’sgi
veassur
ancet
hatt
hef
inanci
alst
atement
sar
eaccur
ate.

c.Audit
orsgat
heredenoughevi
dencet
opr
ovi
dear
easonabl
ebasi
sfor
for
minganopinion.

d.I
ftheevidenceal
lowst
heaudi t
orstodoso,audit
orsgiveassur
anceint
he
f
orm ofopini
on,astowhetherthefi
nanci
alst
atementsasawhol ear
e
f
airl
ypresentedi
nconfor
mitywi t
hGAAP.

16.Whichoft
hef
oll
owi
ngi
smostl
i
kel
ytobepr
esumedt
orepr
esentf
raudr
iskonan
audi
t?

a.Capi
tal
i
zat
ionofrepair
sandmai
ntenancei
ntot
hepr
oper
ty,pl
antand
equi
pmentassetaccount
.

b.I
mpr
operr
evenuer
ecogni
ti
on

c.I
mpr
operi
nter
estexpenseaccr
ual

d.I
ntr
oduct
ionofsi
gni
fi
cantnewpr
oduct
s

1
7.Whichofthef
oll
owi
ngcondi
ti
onsorevent
swoul
dleastl
i
kel
yincr
easer
iskof
f
raudorer
ror
?
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
a.Quest
ionswi
thr
espectt
ocompet
enceori
ntegr
it
yofmanagement

b.Unusual
pressur
eswi
thi
ntheent
it
y

c.Unusual
transact
ions

d.Lackoft
ransact
iont
rai
l

18.Whichofthefol
lowi
ngwouldbel
eastl
i
kelytosuggestt
oanaudi
tort
hatt
he
cl
ient
’
sf i
nanci
alst
atementar
emater
ial
l
ymisstat
ed?

a.Ther
ear
enumer
ousdel
aysi
npr
epar
ingt
imel
yint
ernal
financi
alr
epor
ts.

b.Managementdoesnotcor
recti
nter
nal
cont
rol
str
uct
ureweaknes
sest
hati
t
knowsabout
.

c.Di
ff
erencesar
eref
lect
edi
nthecust
omer
’sconf
ir
mat
ionr
epl
i
es.

d.Ther
ehaveneet
wonewcont
rol
l
erst
hisyear
.

19.Whichoft
hef ol
l
owi ngcir
cumstanceswoul
dleastl
i
kel
ycauseaudi
tort
oconsi
der
whetheramater
ialmisstat
ementexist
s?

a.Thet
urnoverofseni
oraccount
ingper
sonnel
except
ional
l
ylow.

b.Managementpl
acessubst
ant
ial
emphasi
sonmeet
ing,ear
ningpr
oject
ions
.

c.Ther
ear
esi
gni
fi
cantunusual
transact
ionsnearyear
-end.

d.Oper
ati
ngandf
inanci
ngdeci
si
onsar
edomi
nat
edbyoneper
son.

20.Whichoft
hefol
l
owingcondit
ionswoul
dnotnormallycauset
heaudi
tort
o
quest
ionwhet
hermater
ial
err
orsorpossi
blef
raudexi
sts?

a.Theaccount
ingdepar
tmenti
sover
staf
fed.

b.Di
ff
erencesexi
stbet
weencont
rol
account
sandsuppor
ti
ngsubsi
diar
y
r
ecords.

c.Tr
ansact
ionsar
enotsuppor
tedbypr
operdocument
ati
on.

d.Ther
ear
efr
equentchangesofaudi
tor
slawyer
s.
 AUDI
TINGTHEORYMCQBYSALOSAGCOL

CHAPTER3:

1
. Thepri
maryresponsibi
li
tyforest
abli
shi
ngandmaintai
ningani
nter
nal
cont
rol
rest
swi
th
a.Theexternalaudi
tors
b.Theint
ernalaudit
ors
c.Managementandt hosechargedwit
hgovernance
d.Thecontroll
erorthetreas
urer

2.Thefundament alpurposeofani nt
ernalcontr
olisto
a.Saf eguardther esourcesoftheor gani
zation
b.Pr ovide reasonable assurance t hatthe objecti
ves ofthe or
gani
zat
ion ar
e
achieved
c.Encour agecompl i
ancewi thorganizat
ionobject
ives
d.Ensur etheaccur acy,rel
iabil
i
tyandt i
melinessofinf
ormati
on

3.Whichoft hef oll

owi
ngi snotoneoft het hr
eepri
mar
yobj
ect
ivesofef
fect
ivei
nter
nal
contr
ol?
a.Rel i
abil
it
yoffi
nanci al
report
ing
b.Ef f
ici
encyandef f
ect i
venessofoperati
ons
c.Compl i
ancewithlawsandr egulat
ions
d.As suranceofeli
mi nati
onofbusinessri
sk.

4.Whi
choft
hefoll
owi ngint
ernalcontr
olobj
ect
iveswoul
dbemostr
elevantt
otheaudi
t?
a.Operat
ional obj
ecti
ve
b.Compli
anceobj ecti
ve
c.Fi
nanci
al report
ingobject
ive
d.Admini
strati
vecontrolobj
ecti
ve

5.Anactoft woormor eempl oyeetost

ealasset
sandcovert
hei
rthef
tbymi
sst
ati
ngt
he
account
ingrecor dswouldber efer
redt
oas:
a.Collusion
b.Amat er i
alweakness
c.Acont r oldef
ici
ency
d.Asigni fi
cantdefi
ciency

6.Whi
chofthefoll
owingisnotoneoft
hecomponent
sofanent
it
y’si
nter
nal
cont
rol
?
a.Controlri
sk
b.Controlacti
vi
ti
es
c.Inf
ormat i
onandcommuni cat
ion
d.Thecont r
olenvir
onment

7.The over
allat
ti
tude and awarenessofan enti
ty’
sboard ofdi
rect
orconcer
ning t
he
i
mpor t
anceoftheint
ernalcontr
olusual
l
yisr
efl
ect
edi ni
ts
a.Comput er-
basedcont r
ols
b.Syst em ofsegregat
ionofduti
es
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
c.Cont r
ol envi
ronment
d.Saf eguar doveraccessofassets
8.I
nevaluati
ngthedesi gnoftheenti
ty’
sint
ernalcont
rol
envir
onment
,theaudi t
orconsi
der
s
t
he certai
n subcomponent s of controlenvir
onment and how t hey have been
i
ncor
por at
edi ntotheenti
ty’
sprocesses.Subcomponentsofcont
rolenvir
onmentwould
i
ncl
ude

a.I
ntegr
it
yandet
hical
val
ues

b.Commi
tmentt
ocompet
ence

c.Or
gani
zat
ional
str
uct
ure

d.I
nfor
mat
ionandcommuni
cat
ionssyst
ems

9.Whichoft
hef ol
l
owingcomponentsofanenti
ty’
sint
ernalcont
rolst
ruct
urei
ncl
udest
he
devel
opmentofemployeepr
omoti
onandtr
aini
ngpoli
cies?

a.Cont
rol
act
ivi
ti
es

b.Cont
rol
envi
ronment

c.I
nfor
mat
ionandcommuni
cat
ion

d.Qual
i
tycont
rol
syst
em

1
0.Whi
chofthefol
lowingsubcomponent
soft
hecont
rolenvi
ronmentdef
inet
heexi
sti
ng
l
i
nesofr
esponsi
bil
i
tyandauthor
it
y?

a.Or
gani
zat
ional
str
uct
ure

b.Managementphi
l
osophyandoper
ati
ngst
yle

c.Humanr
esour
cepol
i
ciesandpr
act
ices

d.Managementi
ntegr
it
yandet
hical
val
ues

1
1.Whi
choft
hef
oll
owi
ngi
snotoneoft
hesubcomponent
soft
hecont
rol
envi
ronment
?

a.Managementphi
l
osophyandoper
ati
ngst
yle

b.Or
gani
zat
ional
str
uct
ure
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
c.Adequat
esepar
ati
onofdut
ies

d.Commi
tmentt
ocompet
ence

1
2.Whichoft
hefol
lowi
ngdealwi
thongoi
ngorper
iodi
cassessmentofqual
i
tyofi
nter
nal
cont
rol
bymanagement
?

a.Qual
i
tycont
rol
act
ivi
ti
es

b.Moni
tor
ingact
ivi
ti
es

c.Over
sightact
ivi
ti
es

d.Managementact
ivi
ti
es

1
3.Thepoli
ciesandpr
ocedur
est
hathel
pensur
ethatmanagementdi
rect
ivesar
ecar
ri
edout
arer
eferr
edt oast
he:

a.Cont
rol
envi
ronment

b.Cont
rol
act
ivi
ti
es

c.Moni
tor
ingofcont
rol
s

d.I
nfor
mat
ionsyst
ems

1
4.Whichofthef ol
l
owingisnotoneoft
hespeci
fi
ccont
rolact
ivi
ti
est
hatar
erel
evantt
o
f
inanci
alst
atementaudi
t?

a.Per
for
mancer
evi
ews

b.Physi
cal
cont
rol
s

c.Segr
egat
ionofdut
ies

d.Moni
tor
ing

1
5.Propersegregati
on offunct
ionalresponsi
bil
i
ti
esi
n an ef
fect
ive st
ruct
ure ofi
nter
nal
contr
olcal
l
sf orsepar
ati
onoffuncti
onsof
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
a.Aut
hor
izat
ion,execut
ion,andpayment

b.Aut
hor
izat
ion,r
ecor
ding,andcust
ody

c.Cust
ody,execut
ion,andr
epor
ti
ng

d.Aut
hor
izat
ion,payment
,andr
ecor
ding

1
6.Whi
choft
hef
oll
owi
ngbestdescr
ibest
hepur
poseoft
hecont
rol
act
ivi
ti
es?

a.The act
ions,pol
i
ciesand pr
ocedur
est
hatr
efl
ectt
he over
allat
ti
tudesoft
he
management

b.Theidenti
fi
cat
ionand anal
ysi
sofr
isksand r
elevantt
othepr
epar
ati
onoft
he
fi
nanci
alst
atement
s

c.Thepoli
ciesandprocedurest
hathelpensur
ethatnecessar
yact
ionsar
etakeni
n
ordert
oachievet
heent i
ty’
sobj
ect
ives

d.Act
ivi
ti
est
hatdealwi
tht
heongoi
ngassessmentoft
hequal
i
tyofi
nter
nalcont
rol
bymanagement

1
7.Whentheaudit
oratt
emptstounderst
andtheoperati
onoft
heaccounti
ngsyst
em by
t
raci
ngafewtr
ansact
ionst
hrought
heaccount
ingsyst
em,t
heaudi
tori
ssai
dtobe:

a.Tr
aci
ng

b.Vouchi
ng

c.Per
for
mingawal
kthr
ough

d.Test
ingcont
rol
s

1
8.Whichofthefol
l
owingisnotamedi
um thatcannor
mallybeusedbyanaudi
tort
orecor
d
i
nformat
ionconcer
ningacli
ent
’
sint
ernalcont
rol
pol
ici
esandprocedur
es?

a.Nar
rat
ivememor
andum

b.Fl
owchar
t

c.Pr
ocedur
esmanual
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
d.Quest
ionnai
re

1
9.Anauditorusest
heknowl edgepr ovi
dedbytheunder
standi
ngofinter
nalcont
rol
andt he
fi
nalas
sessedlevelofcontrolr
iskpri
mari
lyt
odetermi
net henat
ure,ti
mingandextentof
t
he

a.At
tr
ibut
etest
s

b.Test
sofcont
rol
s

c.Compl
i
ancet
est
s

d.Subst
ant
ivet
est
s

20.
Basedont herequi
rementofPSA3330,how f requent
lymustanaudi
tort
estoper
ati
ng
eff
ecti
venessofcontrol
sthatappeartofunct
ionsast heyhavei
npastyearsandon
whichtheaudi
torwi
shestorel
yinthecurr
entyear?

a.Mont
hly

b.Eachaudi
t

c.Atl
eastever
ysecondaudi
t

d.Atl
eastever
ythi
rdaudi
t
 AUDI
TINGTHEORYMCQBYSALOSAGCOL

CHAPTER4:

1
. Theseareactsofomi ssi
onorcommissi
onbytheenti
tybei
ngaudit
ed,ei
theri
ntent
ional
oruni
ntenti
onal
,whicharecont
rar
ytothepr
evail
i
nglawsandregul
ati
ons.
a.Fraud
b.Mi sappr
opri
ati
on
c.Noncompl i
ance
d.Def al
cat
ion

2.I
n or der to achi eve t
he object
ives of t
he accountancy pr
ofessi
on,pr ofessional
accountantshavet oobserveanumberofpr erequi
si
tesorfundamentalpr
inciples.The
fundamental pri
nciplesi
ncl
udethefoll
owingexcept
a.Obj ectivi
ty
b.Pr ofessionalcompetenceandduecar e
c.Techni cal st
andards
d.Conf i
dence

3.Theprincipleofpr ofessi
onalcompet enceandduecar eimposescer t
ainobligationson
prof
essional account ants.Whichofthef ol
l
owingisnotoneoft hoseobl i
gat
ionsr equired
bythi
spr inci
ple?
a.To actdi l
igentl
yi n accor
dance wi th appl
icabl
et echnicaland pr ofessional
standar ds
b.Tobef air,i
ntell
ectual
l
yhonestandf reeofconfli
ctofinterest
c.Tobecomeawar eandunder standrel
evanttechnical
,pr ofessi
onalandbusi ness
development s
d.Toobt ainpr ofessi
onalknowledgeandexper i
encet oenabl et hem tof ul
f i
lthei
r
responsi bil
i
ties

4.Thephaseofpr
ofessi
onalcompet
encet
hatr
equi
resapr
ofessi
onalaccount
antt
oadopt
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
a program desi gned to ensur e quali
ty contr
olint he per
for
mance ofpr
ofes
sional
ser
vicesconsi st
entwithtechnicalandpr ofessi
onal
standardsi
s:
a.At t
ainmentofpr ofessionalcompet ence
b.Mai ntenanceofpr ofessionalcompet ence
c.Appl icati
onofpr of
essionalcompet ence
d.Revi ewofpr ofessionalcompet ence

5.Theessenceoft
heduecarepr
inci
plei
sthatt
heaudi
torshoul
dnotbegui
l
tyof
:
a.Bias
b.Error
sinj
udgement
c.Fraud
d.Negli
gence

6.Thepri
nci
pleofconfident
ial
i
tyappl
iest
o:
a.Professi
onalaccount
antsi
npubli
cpract
ice
b.Professi
onalaccount
antsi
ncommer ceandindust
ry
c.Professi
onalaccount
antsi
ngovernment
d.Allprof
essi
onalaccount
ants

7.Theprinci pl
eofconf i
dentiali
tyi mposesanobl i
gati
ononpr ofessi
onalaccountantsto
ref
rai
nf rom:
a.Di sclosingconf i
dentialinfor
mat i
ontoanot herpart
yeveni fcli
entauthor
izesthe
disclosure
b.Usi ngconf i
denti
alinformat i
onacquiredasar esul
tofprofessi
onalandbusiness
relati
ons hipstotheirper sonaladvant
ageort headvant
ageoft hethi
rdparti
es
c.Di sclosingi nfor
mationt odef endthemselvesincaseofli
ti
gati
on
d.Respondi ng t o an i nquiry or i
nvest
igati
on conducted by t he Prof
essi
onal
Regul atoryBoar dofAccount ancy

8.ACPAshoul
dnotdiscl
oseconfi
dentiali
nfor
mat i
onobtaineddur
inganaudi
tengagement
i
nwhi
choneoft hef
oll
owingsi
tuati
ons?
a.Whent hesecur
it
yofthestaterequir
es
b.Witht
heconsentofthecli
ent
c.Indef
enseofhimselfwhensuedbyhi scl
ient
d.Toasuccessoraudit
orwit
houtt hecl
ient’
spermissi
on

9.Whi
chofthefoll
owingi sconsideredavi ol
ati
onofr ul
esonconf i
dential
i
ty?
a.TheCPAdi sclosesinfor mati
ont oprotecthisowninterestinthecourseofl egal
proceedings
b.TheCPAdi sclosesinfor mati
ont oasuccessorauditorafterobtai
ningthecli
ent’s
permissi
on
c.The CPA di sclosesinf ormati
on to anotherCPA in compl i
ance with a quali
ty
contr
ol r
eviewconduct edbyt heBOA
d.TheCPAdi vul
gesi nf
ormat iondiscl
osedt ohim byaprospecti
vecli
ent.

1
0.I
nwhi
choft
hef
oll
owi
ngci
rcumst
anceswoul
daCPAbeboundbyt
heet
hicst
oref
rai
n
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
fr
om disclosinganyconf ident
iali
nfor
mationobt aineddur i
ngcour seofapr ofessi
onal
engagement ?
a.TheCPAi sissuedsummonenf orceablebyt hecour torderwhi chorderst heCPA
topresentconf i
denti
ali
nfor
mation
b.Amaj orstockholderofacli
entcompanyseeksaccount inginformat
ionf rom CPA
aft
erthemanagementdecl i
nedt odiscl
osether equestedi nf
ormati
on
c.Conf identi
alcli
entinf
ormati
onismadeavai lablewiththecl i
ent’
spermission
d.Ani nquirybyt hePRCandt heCPAneedst hedi scl
osuret odefendhimsel f

1
1.Thepri
ncipl
eofpr of
essionalbehavi ourrequi
resaprofessionalaccount antto
a.Best rai
ght
forwardandhonesti nper f
ormi
ngpr ofessionalser
vices
b.Bef airandshouldnotal low pr ej
udi
ceorbias,conf l
ictofint
er estorinf
luenceof
otherstooverri
deobject i
vity
c.Per f
orm pr
ofessional
ser viceswi t
hduecare,compet enceanddi l
i
gence
d.Actinamannerconsi stentwi ththegoodreputationoft heprofessionandr ef
rai
n
from anyconductwhi chmi ghtbri
ngdiscr
editt
opr of
ession

1
2.Whichoft hef oll
owingmostaccur atel
yst ateshow obj ecti
vi
tyhasbeendef i
nedbyt he
CodeofEthi cs?
a.Beinghonestandst r
aightforwardinal lprofessi
onalandbusinessr
elat
ionshi
ps.
b.Ast ateofmi ndthatpermi t
sthepr ovisionofanopi ni
onwi t
houtbei
ngaf fect
edby
i
nfluencest hatcompr omiseprofessional j
udgement
c.Acombi nati
onofi mpar t
ial
i
ty,i
ntell
ect ualhonestyandaf reedom f
rom confli
ctof
i
nter est
d.Avoi dingfactsandci rcumstancest hatcoul dreducet hepubli
cconfi
dencei nthe
professional accountant’
sreport

1
3.Which f
undament alprincipl
ei s ser
iousl
ythr
eatened by an engagementt
hatis
compensated based on t he netproceedson loansrecei
ved by t
he cl
i
entf
rom a
commercial
sbank?
a.I
ntegrit
y
b.Objectivi
ty
c.Conf i
dential
i
ty
d.Professionalbehavi
our

1
4.I
ndependenceisrequiredwheneverapr
ofessi
onal
account
antper
for
ms:
a.Pr of
essionalservi
ces
b.As suranceservices
c.Non- assuranceservices
d.Taxconsul tancyservi
ces

1
5.I
tr eferstot he avoidance offactsand ci r
cumstancest hatare so si
gnif
icantthata
reasonable and informed thir
d party,having knowledge ofal lrel
evantinfor
mat i
on,
i
ncludingsafeguar dsapplied,wouldr easonablyconcludeaf i
rm’soramemberoft he
assuranceteam’si nt
egrit
y,object
ivi
tyorprofessi
onalscepti
cism hadbeencompr omised.
a.I ndependencei nfact
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
b.I
ndependenceinappearance
c.I
ndependenceinmind
d.I
nherenti
ndependence

1
6.Thi
soccursasar esultofthef
inanci
alorot
heri
nter
est
sofapr
ofessi
onalaccount
antor
ofanimmediateorclosefamil
ymember .
a.Sel
f-i
nterestthreat
b.Sel
f-r
eviewt hreat
c.Advocacyt hr
eat
d.Famil
iari
tythreat

1
7.Act
ingforanaudi tclientint
her
esol
uti
onofadi
sput
eorl
i
ti
gat
ionwoul
dmostl
i
kel
y
cr
eate
a.Self
-int
erestt hreat
b.Int
imidat
iont hreat
c.Advocacyt hreat
d.Famili
ari
tythreat

1
8.Thepreparat
ionofaccount ingr
ecor
dsoff
inanci
alst
atement
sforanaudi
tcl
i
entwi
l
lmost
l
ikel
ycreat
e
a.Self-i
nterestthreat
b.Self-r
eviewt hreat
c.Inti
midationthreat
d.Fami l
i
ar i
tythreat

1
9.Accept
inggiftorunduehospi
tal
i
tyf
rom anassur
ancecl
i
entwoul
dcr
eat
emostl
i
kel
y
cr
eate
a.Famili
ari
tythreat
b.Self
-revi
ewt hreat
c.Advocacythreat
d.Int
imidat
ionthreat

20.
Usingt
hesameseni orper sonnelonanassur
anceengagementoveral
ongper
iodof
ti
mewouldmostl i
kelycr eat
e
a.I
nti
midationthreat
b.Advocacyt hr
eat
c.Famil
iari
tythr
eat
d.Sel
f-i
nterestthreat
 AUDI
TINGTHEORYMCQBYSALOSAGCOL

CHAPTER5

1
. Thi
sconsi
stsofchecki
ngt
hemat
hemat
ical
accur
acyofdocument
sofr
ecor
ds.

a.Reper
for
mance

b.Conf
ir
mat
ion

c.Recal
cul
ati
on
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
d.I
nspect
ion

2.Whi
choft
hef
oll
owi
ngasser
ti
onsdoesnotr
elat
etobal
ancesatper
iodend?

a.Exi
stence

b.Occur
rence

c.Val
uat
ionoral
l
ocat
ion

d.Ri
ght
sandobl
i
gat
ions

3.Whi
choft
hefoll
owi
ngasser
ti
onsdoesnotr
elat
etocl
assesoft
ransact
ionsandevent
s
f
ort
heper
iod?

a.Compl
eteness

b.Val
uat
ion

c.Cut
-of
f

d.Accur
acy

4.Anasser
ti
ont
hatt
ransact
ionsar
erecor
dedi
nthepr
operaccount
ingper
iodi
s:

a.Cl
assi
fi
cat
ion

b.Occur
rence

c.Accur
acy

d.Cut
-of
f

5.Whichoft
hef
oll
owi
ngi
snotnor
mal
l
yper
for
medi
nthepr
epl
anni
ngorpr
e-engagement
phase?

a.Deci
dingwhet
hert
oacceptorr
ejectanaudi
tengagement

b.I
nqui
ri
ngf
rom pr
edecessoraudi
tor

c.Pr
epar
inganengagementl
ett
er
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
d.Maki
ngapr
eli
minar
yest
imat
eofmat
eri
ali
ty

6.Bef
oreaccept
inganengagementt
oaudi
tanewcl
i
ent
,aCPAi
srequi
redt
oobt
ain

a.Apr
eli
minar
yunder
standi
ngoft
hepr
ospect
ivecl
i
ent
’si
ndust
ryandbusi
ness

b.Thepr
ospect
ivecl
i
ent
’
ssi
gnat
uret
otheengagementl
ett
er

c.Anunder
standi
ngoft
hepr
ospect
ivecl
i
ent
’scont
rol
envi
ronment

d.Ar
epr
esent
ati
onl
ett
erf
rom t
hepr
ospect
ivecl
i
ent

7.Prel
i
minar
yknowledgeaboutt
hecl
ient
’sbusi
nessandi
ndust
rymustbeobt
ainedpr
iort
o
t
heacceptanceoft
heengagementpri
maril
yto

a.Det
ermi
net
hedegr
eeofknowl
edgeandexper
ti
ser
equi
redbyt
heengagement

b.Det
ermi
net
hei
ntegr
it
yofmanagement

c.Det
ermi
newhet
hert
hef
ir
misi
ndependentwi
tht
hecl
i
ent

d.Gat
herevi
denceaboutt
hef
air
nessoft
hef
inanci
alst
atement
s

8.I
nanaudi
t,communi
cat
ionbet
weent
hepr
edecessorandi
ncomi
ngaudi
torshoul
dbe

a.Aut
hor
izedi
nanengagementl
ett
er

b.Acknowl
edgedi
nar
epr
esent
ati
onl
ett
er

c.Ei
therwr
it
tenoror
al

d.Wr
it
tenandi
ncl
udedi
nthewor
kingpaper
s

9.Arnel
,CPA,i
ssucceedingVon,CPA,ont
heaudi
tengagementofAlmarCorpor
ati
on.
Arnelpl
anst
oconsultVonandtorevi
ewVon’
spr
ioryearwor
kingpapers.Ar
nelmaydo
soif

a.VonandAl
marconsent

b.Al
marconsent
s
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
c.Vonconsent
s

d.VonandAr
nel
consent

1
0.Ani
ncomi
ngaudi
torshoul
drequestthenewcl
i
entt
oaut
hor
izet
hepr
edecessoraudi
tor
t
oal
lowarevi
ewofthepredecessor
’s

Engagementl
ett
er Wor
kingPaper
a. Yes Yes

b. Yes No

c. No Yes

d. No No

1
1.Engagementl
ett
erthatdocument
sandconfi
rmstheaudi
tor
’saccept
anceoft
he
engagementwouldnormall
ybesentt
othecl
ient

a.Bef
oret
heaudi
trepor
tisi
ssued

b.Af
tert
heaudi
trepor
tisi
ssued

c.Att
heendoff
iel
dwor
k

d.Bef
oret
hecommencementoft
heengagement

1
2.Whi
choft
hef
oll
owi
ngi
snotoneoft
hepr
inci
pal
cont
ent
sofanengagementl
ett
er?

a.Obj
ect
iveoft
hef
inanci
alst
atement
s

b.Unr
est
ri
ctedaccesst
orecor
dsanddocument
s

c.Li
mit
ati
onsoft
heengagement

d.Management
’sr
esponsi
bil
i
tyf
ort
hef
inanci
alst
atement
s

1
3.Arr
angementsconcer
ningwhi
choft
hef
oll
owi
ngar
eleastl
i
kel
ytobei
ncl
udedi
n
engagementl
ett
er?
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
a.Audi
tor
’sr
esponsi
bil
i
ti
es

b.Feesandbi
l
li
ng

c.CPAi
nvest
menti
ncl
i
entsecur
it
ies

d.Ot
herf
ormsofr
epor
tst
obei
ssuedi
naddi
ti
ont
otheaudi
trepor
t

1
4.Theaudi
tengagementl
ett
ershoul
dgener
all
yincl
udear
efer
encet
oeachoft
he
fol
l
owingexcept

a.Theexpect
ati
onofr
ecei
vi
ngawr
it
tenmanagementr
epr
esent
ati
onl
ett
er

b.Ar
equestf
ort
hecl
i
entt
oconf
ir
mthet
ermsofengagement

c.Adescr
ipt
ionoft
heaudi
tor
’smet
hodofsampl
esel
ect
ion

d.Ther
iskt
hatmat
eri
almi
sst
atement
smayr
emai
nundi
scover
ed

1
5.Whichoft
hef
oll
owi
ngwoul
dbel
eastl
i
kel
ytobei
ncl
udedi
ntheaudi
tor
’sengagement
l
ett
er

a.For
msoft
her
epor
t

b.Ext
entofhi
sresponsi
bil
i
ti
es

c.Obj
ect
ivesandscopeoft
heaudi
t

d.Typeofopi
niont
obei
ssued

1
6.Accordi
ngtoPSA21 0,theaudi
torandt
hecli
entshoul
dagreeonthet
ermsof
engagement.Theagreedter
mswoul dneedt
ober ecordedi
na(
n)

a.Memorandum t
obepl
acedi
ntheper
manentsect
ionoft
heaudi
ti
ngwor
king
paper
s

b.Engagementl
ett
er

c.Cl
i
entr
epr
esent
ati
onl
ett
er

d.Comf
ortl
ett
er
 AUDI
TINGTHEORYMCQBYSALOSAGCOL

1
7.Whi
chofthefol
l
owingfactor
smostli
kel
ywouldinf
luenceanaudi
tor
’sdet
ermi
nat
ionof
t
heaudi
tabi
l
it
yoftheenti
ty’
sfi
nanci
alst
atement
s

a.Thecompl
exi
tyoft
heaccount
ingsyst
ems

b.Theexi
stenceofr
elat
edpar
tyt
ransact
ions

c.Theadequacyoft
heaccount
ingr
ecor
ds

d.Theoper
ati
ngef
fect
ivenessofcont
rol
procedur
es

1
8.Whichofthef
oll
owingf
act
orsmostl
i
kel
ywoul
dcauseanaudi
tornott
oacceptanew
audi
tengagement?

a.Ani
nadequat
eunder
standi
ngoft
heent
it
y’si
nter
val
cont
rol
str
uct
ure

b.Thecl
osepr
oxi
mit
ytot
heendoft
heent
it
y’sf
iscal
year

c.Concl
udi
ngt
hatt
heent
it
y’smanagementpr
obabl
ylacksi
ntegr
it
y

d.Aninabi
l
it
ytoper
for
m pr
eli
minar
yanal
yti
cal
procedur
esbef
oreassessi
ngcont
rol
ri
sk

1
9.Whichofthef
oll
owingshoul
danaudi
torobt
ainf
rom t
hepr
edecessoraudi
torpr
iort
o
accept
inganaudi
tengagement

a.Anal
ysi
sofbal
anceshor
taccount
s

b.Anal
ysi
sofi
ncomest
atement
saccount
s

c.Al
lmat
ter
sofcont
inui
ngaccount
ingsi
gni
fi
cance

d.Fact
sthatmi
ghtbearont
hei
ntegr
it
yofmanagement

20.
Anincomingaudi
tormostl
i
kel
ywoul
dmakespeci
fi
cinqui
ri
esoft
hepr
edecessoraudi
tor
regar
ding

a.Speci
al
izedaccount
ingpr
inci
plesoft
hecl
i
ent
’
sindust
ry

b.Thecompet
encyoft
hecl
i
ent
’
sint
ernal
audi
tst
aff
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
c.Theuncer
tai
ntyi
nher
enti
nappl
yi
ngsampl
i
ngpr
ocedur
es

d.Di
sagr
eement
swi
thmanagementast
oaudi
ti
ngpr
ocedur
es

CHAPTER6:
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
1
. Whichofthefol
l
owi
ngst
atement
sismostcor
rectr
egar
dingt
hepr
imar
ypur
poseofaudi
t
pr
ocedures?

a.Todet
ectal
ler
ror
sorf
raudul
entact
ivi
ti
esaswel
lasi
l
legal
act
ivi
ti
es

b.Tocompl
ywi
tht
heSEC

c.Togathercorr
oborati
veaudi
tevi
denceaboutmanagement
’sasser
ti
onsr
egar
ding
thecl
i
ent’sf
inanci
alstat
ement
s

d.Todetermi
netheamountoferr
orsi
nthebal
ancesheetaccount
sinor
dert
o
adj
usttheaccount
stoact
ual

2.Aproceduredesi
gnedtotestf
ormonet
arymi
sst
atement
sdi
rect
lyaf
fect
ingt
heval
i
dit
y
oft
hefinanci
alst
atementbal
ancesi
sa:

a.Testofcont
rol
s

b.Subst
ant
ivet
est

c.Testofat
tr
ibut
es

d.Monet
ary-
uni
tsampl
i
ngt
est

3.Youar eaudit
ingthecompany’
spurchasi
ngprocessf
orgoodsandser vices.Youar
e
pri
mar i
lyconcernedwit
hthecompanynotrecordi
ngall
pur
chasetransact i
ons.Whi
ch
auditprocedurebel
owwouldbethemostef f
ecti
veaudi
tpr
ocedureint hiscase?

a.Vouchi
ngf
rom t
heaccount
spayabl
eaccountt
othevendori
nvoi
ces
.

b.Tr
aci
ngvendori
nvoi
cest
orecor
dedamount
sint
heaccount
spayabl
eaccount
.

c.Conf
ir
mat
ionofaccount
spayabl
erecor
dedamount
s.

d.Reconci
li
ngt
heaccount
spayabl
esubsi
diar
yledgert
otheaccount
spayabl
e
account
.

4.Thei
nfor
mationobt
ainedbyt
heaudi
tori
nar
ri
vi
ngatt
heconcl
usi
onsonwhi
cht
heaudi
t
opi
nioni
sbasediscal
led:

a.Audi
twor
kingpaper
s

b.Audi
tasser
ti
ons

c.Audi
tevi
dence

d.Audi
tst
andar
ds
 AUDI
TINGTHEORYMCQBYSALOSAGCOL

5.Themaj
orr
easonani
ndependentaudi
torgat
her
sevi
dencei
sto

a.f
orm anopi
nionont
hef
inanci
alst
atement
s.

b.det
ectf
raud.

c.eval
uat
emanagement
.

d.eval
uat
eint
ernal
cont
rol
.

6.Whi
choft
hef
oll
owi
ngi
sthebestexampl
eofacor
robor
ati
ngevi
dence?

a.Gener
alj
our
nal

b.Wor
ksheetcostal
l
ocat
ion

c.Vendor
’si
nvoi
ce

d.Cashr
ecei
ptsj
our
nal

7.Whi
choft
hef
oll
owi
ngst
atement
saboutaudi
tevi
dencei
scor
rect
?

a.Appr
opr
iat
enessi
sthemeasur
eoft
hequant
it
yofaudi
tevi
dence.

b.Suf
fi
ciencyisthemeasureoft
hequal
it
yofaudi
tevi
denceandi
tsr
elevancet
oa
par
ti
cularassert
ionandi
tsr
eli
abi
l
it
y.

c.Audi
tevi
denceismoreper
suasi
vewheni
temsofevi
dencef
rom di
ff
erentsour
ces
orofdi
ff
erentnat
urear
econsi
stent
.

d.Thereshoul
dbeaone-
to-
oner
elat
ionshi
pbet
weenaudi
tobj
ect
iveandaudi
t
procedur
e.

8.Evi
dencei
sgener
all
yconsi
der
edappr
opr
iat
ewhen:

a.i
thasbeenobt
ainedbyr
andom sel
ect
ion.

b.ther
eisenoughofi
ttoaf
for
dar
easonabl
ebasi
sforanopi
niononf
inanci
al
stat
ements.

c.i
thast
hequal
i
ti
esofbei
ngr
elevant
,obj
ect
ive,andf
reef
rom knownbi
as.

d.i
tconsi
stsofwr
it
tenst
atement
smadebymanager
soft
heent
erpr
iseunderaudi
t.
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
9.Evi
dencear
egener
all
yconsi
der
edsuf
fi
cientwhen:

a.i
tisappr
opr
iat
e.

b.ther
eisenoughofi
ttoaf
for
dar
easonabl
ebasi
sforanopi
niononf
inanci
al
stat
ements.

c.i
thast
hequal
i
ti
esofbei
ngr
elevant
,obj
ect
iveandf
reef
rom unknownbi
as.

d.i
thasbeenobt
ainedbyr
andom sel
ect
ion.

1
0.Appr
opr
iat
enessofevi
dencei
sameasur
eoft
he:

a.quant
it
yofevi
dence.

b.qual
i
tyofevi
dence.

c.suf
fi
ci
encyofevi
dence.

d.meani
ngofevi
dence.

1
1.Thesuf
fi
ciencyandappr
opr
iat
enessofevi
dent
ial
mat
terul
ti
mat
elyi
sbasedont
he

a.avai
l
abi
l
it
yofcor
robor
ati
ngdat
a.

b.Phi
l
ippi
neSt
andar
donAudi
ti
ng.

c.per
ti
nenceoft
heevi
dence.

d.j
udgmentoft
heaudi
tor
.

1
2.Anexampl
eofanext
ernal
documentt
hatpr
ovi
desr
eli
abl
einf
ormat
ionf
ort
heaudi
tori
s:

a.empl
oyeest
imer
epor
ts.

b.bankst
atement
s.

c.pur
chaseor
derf
orcompanypur
chases
.

d.car
boncopi
esofchecks
.

1
3.Anexampleofadocumentthatt
heaudi
torr
ecei
vesfrom t
hecl
i
ent
,butwhi
chwas
pr
eparedbysomeoneoutsi
dethecl
ient
’
sorgani
zat
ion,i
sa:

a.conf
ir
mat
ion.
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
b.sal
esi
nvoi
ce.

c.vendori
nvoi
ce.

d.bankr
econci
l
iat
ion.

1
4.Tobeconsi
der
edr
eli
abl
eevi
dence,conf
ir
mat
ionsmustbecont
rol
l
edby:

a.acl
i
entempl
oyeer
esponsi
blef
oraccount
srecei
vabl
e.

b.af
inanci
alst
atementaudi
tor
.

c.acl
i
ent
’si
nter
nal
audi
tdepar
tment
.

d.acl
i
ent
’scont
rol
l
erorCFO.

1
5.Giventheeconomicandti
meconst
raint
sinwhichaudi
torscancoll
ectevi
denceabout
managementasserti
onsaboutt
hef
inancial
stat
ements
,theaudit
ornormall
ygather
s
evidencet
hatis:

a.i
rr
efut
abl
e.

b.concl
usi
ve.

c.per
suasi
ve.

d.compl
etel
yconvi
nci
ng.

1
6.I
trefer
stot
hemateri
al(worki
ngpaper
s)prepar
edbyandf
or,orobt
ainedandr
etai
ned
bytheaudi
tori
nconnecti
onwitht
heperf
ormanceoft
heaudi
t.

a.Document
ati
on

b.Audi
trepor
t

c.Account
ingdat
a

d.Cor
robor
ati
veevi
dence

1
7.Whichoft
hefol
lowi
ngbestdescr
ibesoneoft
hepr
imar
yobj
ect
ivesofaudi
t
document
ati
on?

a.Def
endagai
nstcl
aimsofadef
ici
entaudi
t.

b.Pr
ovi
deapr
inci
pal
suppor
tfort
hei
ncomet
axat
ionr
etur
n.

c.Pr
ovi
dedocument
ati
ont
hatt
heaudi
twasconduct
edi
naccor
dancewi
thaudi
ti
ng
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
st
andar
ds.

d.Pr
ovi
deaddi
ti
onal
suppor
torr
ecor
dedamount
stot
hecl
i
ent
.

1
8.Whi
choft
hef
oll
owi
ngi
snotanexper
tuponwhosewor
kanaudi
tormayr
elay?

a.Act
uar
y

b.I
nter
nal
audi
tor

c.Appr
aiser

d.Engi
neer

1
9.Anexper
twhoseexper
ti
sei
susedbyt
heent
it
yinpr
epar
ingf
inanci
alst
atement
siscal
l
ed
a(
n):

a.Fi
nanci
alexper
t

b.Managementexper
t

c.Audi
tor
’sexper
t

d.Speci
al
ist

20.
Ext
ernalaudi
torsmustobt
ainevi
denceregar
dingwhatatt
ri
butesofaninter
nal
audi
t
depart
mentiftheext
ernal
audit
orsi
ntendtorel
yonint
ernalaudi
tor
’swork?

a.I
ntegr
it
y

b.Obj
ect
ivi
ty

c.Compet
ence

d.Al
loft
heabove
 AUDI
TINGTHEORYMCQBYSALOSAGCOL

CHAPTER7

1
. Thi
sinvol
vesdevelopi
nganover al
lst
rat
egyfortheexpect
edconductandscopeoft
he
examinat
ion;thenat
ure,ext
ent
,andtimingofwhichvarywit
hthesi
zeandcomplexi
ty,
andexperiencewit
handknowledgeoft heent
it
y.
a.Audi
tpl
anni
ng
b.Audi
tpr
ocedur
e
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
c.Audi
tpr
ogr
am
d.Audi
twor
kingpaper
s

2.I
nit
ial
planni
ngi
nvol
vesf
ourmat
ter
s.Whi
choft
hef
oll
owi
ngi
snotoneoft
hese?
a.Devel
opanover
all
audi
tst
rat
egy
b.Requestt
hatbankbal
ancesbeconf
ir
med
c.Schedul
eengagementst
affandaudi
tspeci
ali
sts
d.I
dent
if
ythecl
i
ent
’
sreasonf
ort
heaudi
t

3.ACPAi sconduct
ingthefir
stexaminat
ionofacli
ent’
sfi
nanci
alstat
ements.TheCPA
hopestoreducetheauditworkbyconsult
ingwit
hthepredecessoraudi
torandr
evi
ewi
ng
thepr
edecessor’
sworkingpapers.Thi
sprocedurei
s
a.Accept
abl
eift
hecl
i
entandt
hepr
edecessoraudi
toragr
eet
oit
.
b.Acceptablei
ftheCPAr ef
ersint
heaudi
trepor
ttor
eli
anceupont
he
predecessoraudi
tor
’swork.
c.Requi
redi
ftheCPAi
stor
enderanunmodi
fi
edopi
nion.
d.Unaccept
abl
ebecauset
heCPAshoul
dbr
ingani
ndependentvi
ewpoi
ntt
oa
newengagement
.

4.Theprel
i
minaryj
udgmentaboutmateri
ali
tyandt
heamountofaudi
tevi
dence
accumul
atedare r
elated.
a.di
rect
ly
b.i
ndi
rect
ly
c.not
d.i
nver
sel
y

5.Accor
dingt
oPSA320,mat
eri
ali
tyshoul
dbeconsi
der
edbyt
heaudi
torwhen:
Det
ermi
ningt
henat
ure,t
imi
ng Eval
uat
ingt
heef
fect
s
andext
entofaudi
tpr
ocedur
es. ofmi
sst
atement
s
a. YES YES
b. YES NO
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
c. NO NO
d. NO YES

6.Whi
choft
hef
oll
owi
ngst
atement
sisnotcor
rectaboutmat
eri
ali
ty?
a.Theconceptofmat eri
ali
tyrecogni
zesthatsomematt
ersar
eimport
antforfair
presentat
ionoff
inanci
alstatementsi
nconf or
mit
ywit
htheappl
i
cabl
efinancial
report
ingframework,whil
eot hermat
tersarenoti
mport
ant
.
b.Anaudi t
orconsider
smat eri
ali
tyf
orplanningpur
posesinter
msofthel
argest
aggregatelevel
ofmi sst
atementsthatcouldbemater
ialt
oanyoneoft
he
fi
nancialst
atements.
c.Materi
ali
tyjudgmentsar
emadeinlightofsur
roundingcir
cumstancesand
necessari
lyinvol
vebot
hquant
it
ati
veandqualitat
ivejudgment
s
d.Anaudit
or’sconsi
derat
ionofmater
ial
i
tyi
sinfl
uencedbytheaudi
tor
’s
percept
ionoftheneedsofareasonabl
epersonwhowill
r el
yont
hef i
nanci
al
st
atements.

7.“
Per
for
mancemat
eri
al
it
y”i
sthet
erm usedt
oindi
cat
emat
eri
ali
tyatt
he:
a.bal
ancesheetl
evel
b.accountbal
ancel
evel
c.i
ncomest
atementl
evel
d.company-
widel
evel

8.Whencompar i
nglevelofmateri
ali
tyusedf
orpl
anni
ngpur
posesandthel
evel
of
mat
eri
ali
tyusedforevaluat
ingevi
dence,onewoul
dmostl
ikel
yexpect
a.Thel
evel
ofmat
eri
ali
tyt
obeal
wayssi
mil
ar.
b.Thel
evel
ofmat
eri
ali
tyf
orpl
anni
ngpur
posest
obesi
mil
ar.
c.Thel
evel
ofmat
eri
ali
tyf
orpl
anni
ngpur
posest
obehi
gher
.
d.Thel
evelofmat
eri
ali
tyf
orplanni
ngpurposestobebasedontot
alasset
swhi
l
e
thel
evel
ofmater
ial
i
tyforeval
uati
ngpurposestobebasedonneti
ncome.

9.Qual
it
ati
vefact
orscanaff
ectanaudi
tor’
sassessmentofmateri
ali
ty.Whichoft
he
f
oll
owingquali
tat
ivef
act
orscoul
dinf
luencetheassessmentofmat er
ial
i
ty?
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
I
. Mi
sst
atement
sthatar
eot
her
wisei
mmat
eri
almaybemat
eri
ali
faf
fect
ear
ningst
rends.
I
I. Mi normi
sst
atement
sresul
ti
ngf
rom t
heconsequencesofcont
ract
ual
obl
igat
ions.
a.Ionl
y
b.I
Ionl
y
c.IandI
I
d.nei
therIorI
I

1
0.Audit
orsfr
equentl
yref
ert
othet
ermsaudi
tassur
ance,over
all
assur
ance,adl
evel
of
assur
ancetoref
erto .
a.det
ect
ionr
isk
b.audi
trepor
tri
sk
c.accept
abl
eaudi
tri
sk
d.i
nher
entr
isk

1
1.Theri
skthatfi
nanci
alstat
ementsareli
kel
ytobemi
sst
atedmat
eri
all
ywi
thoutr
egar
dto
theef
fect
ivenessofi
nternal
contr
olist
he;
a.I
nher
entr
isk
b.Audi
tri
sk
c.Cl
i
entr
isk
d.Cont
rol
risk

1
2.Whenpl
anni
ngaf
inanci
alst
atementaudi
t,t
heaudi
torshoul
dassessi
nher
entr
iskatt
he
Fi
nanci
alst
atementl
evel Accountbal
anceort
ransact
ioncl
assl
evel
a. YES YES
b. YES NO
c. NO NO
d. NO YES

1
3.Whi
choft
hef
oll
owi
ngi
sani
ncor
rectst
atement
?
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
a.Det
ect
ionr
iskcannotbechangedatt
heaudi
tor
’sdi
scr
eti
on.
b.I
findi
vidualauditr
iskremainst
hesame,det
ect
ionr
iskbear
sani
nver
se
r
elati
onshiptoinherentandcontr
olr
isk.
c.Thegr
eatert
heinherentandcontr
olr
iskt
heaudi
torbel
i
evesexi
st,t
hel
ess
det
ect
ionri
skthatcanbeaccepted.
d.Theaudi
tormightmakesepar
ateorcombi
nesassessment
sofi
nher
entr
isk
andcont
rolr
isk.

1
4.Rel
ati
onshi
pbet
weencont
rol
riskanddet
ect
ionr
iski
sor
dinar
il
y
a.Par
all
el
b.Di
rect
c.I
nver
se
d.Equal

1
5.Whichoft
hefol
l
owingi
snotcor
rectregar
dinganaudi
tor
’sdeci
si
ont
hatal
ower
accept
abl
eaudi
tri
ski
sappr
opri
ate?
a.Mor
eevi
dencei
saccumul
ated
b.Lessevi
dencei
saccumul
ated
c.Speci
alcar
eisr
equi
redi
nassi
gni
ngexper
iencedst
aff
d.Revi
ewofauditdocument
ati
oni
sper
for
medbyper
sonnel
notassi
gnedt
othe
engagement

1
6.Theseconsistoft
heanal ysi
sofsi
gnifi
cantrat
iosandt
rendsincl
udingtheresul
ti
ng
i
nvesti
gati
onoff l
uctuat
ionsandrelat
ionshi
pthatarei
nconsi
stentwit
hotherrel
evant
i
nformati
onordevi at
efrom predi
ctableamount.
a.Fi
nanci
alst
atementanal
ysi
s
b.Var
ianceanal
ysi
s
c.Anal
yti
cal
procedur
es
d.Regr
essi
onanal
ysi
s

1
7.Whi
choft
hef
oll
owi
ngst
atement
saboutanal
yti
cal
procedur
esi
sincor
rect
?
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
a.Anal
yti
calpr
ocedur
esar
erequi
redt
obeper
for
medi
nthepl
anni
ngphas
eof
t
heaudit.
b.Anal
yti
cal
procedur
esar
erequi
redt
obedonedur
ingt
het
est
ingphaseoft
he
audi
t.
c.Anal
yti
calpr
ocedur
esar
erequi
redt
obedonedur
ingt
hecompl
eti
onphaseof
t
heaudit.
d.Anal
yti
calpr
oceduresmaybeperf
ormedi
nthepl
anni
ng,t
est
ingand
complet
ionphasesoft
heaudi
t.

1
8.Indevelopi
ngtheover
all
audi
tpl
anandaudi
tpr
ogr
am,t
heaudi
torshoul
dassess
i
nherentri
skatthe:
Audi
tpl
an Audi
tpr
ogr
am
a.Fi
nanci
alst
atementl
evel Account
ingbal
ancel
evel
b.Accountbal
ancel
evel Fi
nanci
alst
atementl
evel
c.Accountbal
ancel
evel Accountbal
ancel
evel
d.Fi
nanci
alst
atementl
evel Fi
nanci
alst
atementl
evel

1
9.Anaudi
torshoul
ddesi
gnt
hewr
it
tenaudi
tpr
ogr
am sot
hat
a.Al
lmat
eri
alt
ransact
ionswi
l
lbesel
ect
edf
orsubst
ant
ivet
est
ing
b.Subst
ant
ivet
est
spr
iort
othebal
ancesheetdat
ewi
l
lbemi
nimi
zed.
c.Theaudi
tpr
ocedur
essel
ect
edwi
l
lachi
evespeci
fi
caudi
tobj
ect
ives
.
d.Eachaccountbal
ancewi
l
lbet
est
edunderei
thert
est
sofcont
rol
sort
est
sof
t
ransact
ions.

20.Whi
choft
hef
oll
owi
ngmat
ter
swoul
dleastl
i
kel
yappeari
ntheaudi
tpr
ogr
am?
a.Speci
fi
cpr
ocedur
est
hatwi
l
lbeper
for
med.
b.Speci
fi
caudi
tobj
ect
ives
.
c.Est
imat
edt
imet
hatwi
l
lbespenti
nper
for
mingcer
tai
npr
ocedur
es.
d.Document
ati
onoft
heaccount
ingandi
nter
nal
cont
rol
syst
emsbei
ngr
evi
ewed.
 AUDI
TINGTHEORYMCQBYSALOSAGCOL

CHAPTER8

1
. Thisinvolvestheappli
cati
onofthepr ocedur
estolessthan1 00% oftheit
emswi t
hinan
accountbal anceorclassoftr
ansacti
ons.Thi
senablestheauditort
oobtainandevaluat
e
auditevidenceaboutsomechar act
eri
sti
csoftheselectedi t
emsi nordertoform an
opini
on aboutt he charact
eri
sti
cs ofallitems supporti
ng an accountbalance or
tr
ansactionclass.

a.Audi
ttechni
ques

b.Sel
ect
ivet
est
ing

c.Audi
tsampl
i
ng

d.Speci
fi
cident
if
icat
ion

2.Audi
tsampl
i
ngf
orsubst
ant
ivet
est
sisappr
opr
iat
ewhen

a.Anal
yti
cal
procedur
esar
eused

b.Theaudi
torwant
stoel
i
minat
esampl
i
ngr
isks

c.Apopul
ati
oncont
ainssmal
lnumberofl
argeval
uei
tems

d.Test
sofdet
ail
sar
eper
for
med

3.Audi
tsampl
i
ngf
ort
estofcont
rol
isgener
all
yappr
opr
iat
ewhen

a.Cont
rol
leavesevi
denceofper
for
mance

b.Cont
rol
leavesnoevi
denceofper
for
mance

c.1
00% oft
het
ransact
ionsi
stest
ed
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
d.Exami
ningspeci
fi
chi
ghval
uei
temsi
nthepopul
ati
on

4.Inasampl
ingappli
cat
ion,t
hegroupofi
temsaboutwhi
cht
heaudi
torwant
stoes
timat
e
somechar
acter
ist
ici
scall
edthe

a.Popul
ati
on c.At
tr
ibut
eofi
nter
est

b.Sampl
e d.Sampl
i
nguni
t

5.Non-
sampl
i
nger
roroccurwhent
heaudi
ttest
sdonotuncoverexi
sti
ngexcept
ionsi
nthe

a.Popul
ati
on

b.Pl
anni
ngst
age

c.Sampl
e

d.Fi
nanci
alst
atement

6.PSA530i
dent
if
iest
wogener
alappr
oachest
oaudi
tsampl
i
ng.Theyar
e

a.Random &nonr
andom

b.St
ati
sti
cal
&nonst
ati
sti
cal

c.Pr
eci
si
on&r
eli
abi
l
it
y

d.Ri
skandnonr
isk

7.Ther
elat
ionshi
pbet
weensampl
esi
zeandt
heal
l
owabl
esampl
i
ngr
isksi
s

a.Di
rect

b.I
nver
se

c.Sampl
edevi
ati
onr
ate

d.Expect
eddevi
ati
onr
ate

8.Pr
inci
pal
met
hodsofsampl
i
ngsel
ect
ioni
ncl
udeal
loft
hef
oll
owi
ngexcept
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
a.Haphazar
d

b.Random number

c.Syst
emat
ic

d.St
ati
sti
cal

9.Asampleinwhi
cheverypossi
blecombi
nat
ionofi
temsi
nthepopul
ati
onhasachanceof
const
it
uti
ngt
hesampleisa

a.Repr
esent
ati
vesampl
e

b.Random sampl
e

c.St
ati
sti
cal
sampl
e

d.Judgmentsampl
e

1
0.Theprocesswhichr
equir
est hecal
cul
ati
onofani
nter
valandt
hem sel
ect
sthei
tems
basedonthesi
zeoft
heinter
vali
s

a.St
ati
sti
cal
sampl
i
ng

b.Syst
emat
icsel
ect
ion

c.Random sel
ect
ion

d.Comput
eri
zedsel
ect
ion

1
1.Amethodofsamplinginwhi
chal
lthei
temsi
nthepopul
ati
onar
edi
vi
dedi
ntot
woor
mor
esub-popul
ati
onis

a.Var
iabl
esampl
i
ng

b.St
rat
if
iedsampl
i
ng

c.At
tr
ibut
esampl
i
ng

d.Di
vi
si
blesampl
i
ng
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
1
2.I
ftheaudi
tori
sconcernedthatapopul
ati
onmaycont ai
nexcept
ions
,thedeter
minat
ion
ofasampl
esizesuf
fi
cientt
oincl
udeatl
eastonesuchexcept
ioni
sacharact
eri
sti
cof

a.Di
scover
ysampl
i
ng

b.Random sampl
i
ng

c.Var
iabl
essampl
i
ng

d.Peso-
uni
tsampl
i
ng

1
3.Whi
chofthefoll
owi
ngst
ati
sti
calsampl
i
ngpl
ansdoesnotuseaf
ixedsampl
esi
zef
or
t
est
sofcont
rol
s?

a.PPSsampl
i
ng

b.Val
ue-
wei
ght
edsampl
i
ng

c.Sequent
ial
sampl
i
ng

d.Var
iabl
essampl
i
ng

1
4.Val
uewei
ght
edsampl
i
ngi
smostappr
opr
iat
ewhent
heaudi
tor

a.Ant
ici
pat
esunder
stat
ementer
ror
s

b.Expect
snoer
ror
s

c.Ant
ici
pat
eover
stat
ementer
ror
s

d.Hasassessedcont
rol
riskathi
ghl
evel

1
5.Themaxi
mum amountofer
rori
napopul
ati
ont
hatt
heaudi
tori
swi
l
li
ngt
oaccepti
s
ref
err
edt
oast
he

a.Accept
abl
eri
sk

b.Tol
erabl
eer
ror

c.Expect
eder
ror

d.Tol
erabl
emat
eri
al
it
y
 AUDI
TINGTHEORYMCQBYSALOSAGCOL

1
6.Thedevi
ati
onr
atet
heaudi
torexpect
stof
indi
nthepopul
ati
on,bef
oret
est
ingbegi
ns,i
s
cal
l
edthe

a.Tol
erabl
edevi
ati
onr
ate

b.Comput
erupperdevi
ati
onr
ate

c.Sampl
edevi
ati
onr
ate

d.Expect
eddevi
ati
onr
ate

1
7.Whichofthef
oll
owingsampli
ngmethodswoul
dbemostappr
opr
iat
einper
for
mingt
est
s
ofcont
rol
soveraut
hori
zat
ionofcashdi
sbur
sement
s

a.At
tr
ibut
es

b.Var
iabl
es

c.Rat
io

d.St
rat
if
ied

1
8.I
nassessi
ngsampl
eri
sk,al
phar
iskr
elat
etot
he

a.Ef
fi
ciencyoft
heaudi
t

b.Sel
ect
ionoft
hesampl
e

c.Ef
fect
ivenessoft
heaudi
t

d.Audi
tqual
i
tycont
rol
s

1
9.Which oft
he fol
lowi
ng sampl
ing pl
answoul
d be desi
gned t
o est
imat
e a numer
ical
measurementofapopul
ati
onsuchaspesoval
ue?

a.Numer
ical
sampl
i
ng

b.Sampl
i
ngat
tr
ibut
es

c.Di
scover
ysampl
i
ng
 AUDI
TINGTHEORYMCQBYSALOSAGCOL
d.Sampl
i
ngf
orvar
iabl
es

20.
Stat
ist
ical
sampl
esdonotal
l
ow

a.A.mor
eef
fi
cientsampl
es

b.Meas
urementofs
ampl
erel
i
abi
l
it
y

c.Repl
acementoft
heaudi
tor
’spr
ofessi
onal
judgment

d.Meas
urementofs
ampl
eri
sk