AUD — Auditing & Attestation — Quiz 3

Questions in this quiz (7)

1. Which of the following procedures is a test of controls?

   • Confirming accounts payable
   • Inspecting supporting documents for transactions
   • Observing inventory count procedures
   • Reviewing segregation of duties

2. To test the completeness of revenue, which procedure is most appropriate?

   • Tracing shipping documents to sales invoices
   • Vouching sales invoices to shipping documents
   • Confirming accounts receivable balances
   • Reviewing cash receipts after year-end

3. Which analytical procedure would be most effective in identifying unusual fluctuations in expenses?

   • Comparing expenses to prior year totals
   • Comparing expenses to budgeted amounts
   • Comparing expense ratios to industry averages
   • Comparing expenses to number of transactions processed

4. An auditor wants to test the existence of inventory. Which procedure is most appropriate?

   • Reviewing purchase orders
   • Observing physical inventory counts
   • Tracing inventory records to invoices
   • Recalculating inventory balances

5. Which of the following is an example of an analytical procedure?

   • Inspecting contracts
   • Confirming bank balances
   • Comparing gross margin percentages over time
   • Performing depreciation calculations

6. An auditor is testing payroll expense. Which procedure best tests occurrence?

   • Tracing payroll entries to employee time records
   • Comparing payroll to prior year
   • Reviewing payroll tax filings
   • Comparing payroll to industry averages

7. An auditor is evaluating accounts payable. Which procedure best tests completeness?

   • Confirming vendor balances
   • Reviewing subsequent cash disbursements
   • Inspecting purchase orders
   • Recalculating payable balances