Auditing Theory
Auditing Theory
1. A control which relates to all parts of the EDP system is called a(n)
a. Systems control c. Applications control
b. General control d. Universal control
2. Which of the following is not an output control?
a. Proper authorization of transaction
b. Control totals
c. Check digits
d. Adequate documents
3. Should the auditor feel, after obtaining an understanding of the EDP internal control structure, that control risk cannot be reduced, he or she will
a. Issue a disclaimer
b. Issue an adverse opinion
c. Increase the sample size for tests of controls
d. Expand the substantive testing portion of the audit
4. The real-time feature normally would be least useful when applied to accounting for a firm’s
a. Bank-account balances
b. Property and depreciation
c. Customer accounts receivable
d. Merchandise inventory
5. A sample in which the characteristics in the sample are the same as those of the population is a
a. Random sample c. Attributes sample
b. Variables sample d. Representative sample
6. Establishing a route through the random number table
a. Is an arbitrary decision
b. Needs to be done in advance of choosing the numbers
c. Is essential and the route must be followed consistently
d. Requires that all three of the above is true
7. When an auditor goes through a population and selects items for the sample without regard to their size, source, or other distinguishing characteristics, it is called
a. Block selection
b. Haphazard selection
c. Systematic selection
d. Statistical selection
8. Which of the following may be used to reduce the risk of non sampling errors?
a. Increasing the size of audit samples
b. Stratifying audit samples
c. Adequately planning audit samples
d. Using statistical sampling techniques
9. A number of factors influences the sample size for a substantive test of details of an account balance. All other factors being equal, which of the following would lead to larger sample size?
a. Greater reliance on internal control
b.
c.
1. A control which relates to all parts of the EDP system is called a(n)
a. Systems control c. Applications control
b. General control d. Universal control
2. Which of the following is not an output control?
a. Proper authorization of transaction
b. Control totals
c. Check digits
d. Adequate documents
3. Should the auditor feel, after obtaining an understanding of the EDP internal control structure, that control risk cannot be reduced, he or she will
a. Issue a disclaimer
b. Issue an adverse opinion
c. Increase the sample size for tests of controls
d. Expand the substantive testing portion of the audit
4. The real-time feature normally would be least useful when applied to accounting for a firm’s
a. Bank-account balances
b. Property and depreciation
c. Customer accounts receivable
d. Merchandise inventory
5. A sample in which the characteristics in the sample are the same as those of the population is a
a. Random sample c. Attributes sample
b. Variables sample d. Representative sample
6. Establishing a route through the random number table
a. Is an arbitrary decision
b. Needs to be done in advance of choosing the numbers
c. Is essential and the route must be followed consistently
d. Requires that all three of the above is true
7. When an auditor goes through a population and selects items for the sample without regard to their size, source, or other distinguishing characteristics, it is called
a. Block selection
b. Haphazard selection
c. Systematic selection
d. Statistical selection
8. Which of the following may be used to reduce the risk of non sampling errors?
a. Increasing the size of audit samples
b. Stratifying audit samples
c. Adequately planning audit samples
d. Using statistical sampling techniques
9. A number of factors influences the sample size for a substantive test of details of an account balance. All other factors being equal, which of the following would lead to larger sample size?
a. Greater reliance on internal control
b.
c.