Auditing Techniques & Internal Audit Introduction

What is a potential drawback of test-checking in auditing?

Why is test-checking considered less reliable than a full audit?

What is a key factor to consider when deciding whether to use test-checking in an audit?

What is the primary benefit of classifying and stratifying transactions before performing test-checking?

What precautions should auditors take to mitigate the risks associated with test-checking?

What is a potential consequence of revealing the details of test-checking to the client's staff?

How can the auditor mitigate the risk of their personal judgement influencing the selection of transactions for test-checking?

Which of the following is NOT a valid precaution to take when using test-checking in an audit?

What does the risk of under-reliance and incorrect rejection cause?

What is the relationship between the tolerable error and the sample size?

When determining the expected error in a population, what should the auditor consider?

What does the risk of overreliance and incorrect acceptance result in?

What is the effect of a strong system of internal control on the audit sample size?

What does the term "tolerable error" represent in compliance procedures or tests of controls?

How does the auditor's willingness to accept sampling risk affect the sample size?

What is the purpose of the audit sample size?

What is the purpose of the company auditor's report regarding internal controls under CARO, 2003?

Which of the following is NOT a limitation of internal control systems as described in the text?

Which of these is NOT a factor that the company auditor considers when evaluating the effectiveness of the internal control system?

What is a key challenge in addressing the limitation of 'Unusual Transactions' in internal control systems?

What is the primary reason why the text emphasizes the importance of the auditor's role in evaluating internal control systems?

Which of these is a potential risk associated with a lack of effective internal controls over cash sales?

Based on the example provided, what is the purpose of having the counter salesman prepare the cash-memo in quadruplicate for each cash sale?

Why is the 'PAID' stamp applied to the cash-memo copies in the example of cash sales?

Which auditing technique involves examining documents and records to confirm the authenticity of transactions?

In the context of auditing, what does 'observation' involve?

Which auditing technique is particularly relevant in assessing the accuracy of financial transactions recorded in the books of account?

What is the primary purpose of 'confirmation' in auditing?

Which of the following is NOT considered an audit procedure according to AAS-5?

Which of these is NOT an example of an accounting ratio used for analytical review?

What is the main difference between audit techniques and audit procedures?

How does the increasing use of computerized accounting systems impact the relevance of the 'computation' auditing technique?

In the context of auditing, what is the primary purpose of 'Compliance Procedures'?

Which of the following is NOT a feature of 'Test Checking' in auditing?

What is the primary rationale behind using 'Test Checking' in auditing?

Which of the following is NOT a common substantive procedure used by auditors during an audit?

Why would an auditor perform 'Ledger Scrutiny' as a substantive procedure?

When performing 'Vouching', an auditor would typically use which of the following documents to confirm the existence of a particular transaction?

What is the main difference between 'Compliance Procedures' and 'Substantive Procedures'?

Which of the following best describes the approach taken by auditors when using 'Test-Checking'?

What is a major concern the auditor should have when using the systematic sampling method?

Which of the following is NOT a characteristic of haphazard sampling?

What is the primary purpose of evaluating sample results in an audit?

In haphazard sampling, what is the primary concern about selecting easily located items?

What is an example of a qualitative aspect of an error that an auditor should consider?

How does the auditor determine whether an item in the sample constitutes an error?

When an auditor identifies an error in a sample item, what is the next step?

What is the primary objective of an auditor when designing a sample?