20 Questions
Which phase of the audit is the most expensive?
Substantive Testing
Which of the following is NOT a feature of Substantive Testing?
Determining the effectiveness of controls
Which of the following is NOT a factor that determines the nature, timing, and extent of Substantive Testing?
Extent of losses
Which of the following is NOT an opinion that can be issued in an audit report?
Unqualified opinion
What is the purpose of the Test of Transactions?
To evaluate whether transactions have been handled effectively and efficiently
When is the auditor required to perform the Test of Controls (TOC)?
When the control risk assessment is below the maximum level
What is the purpose of the Substantive Testing phase?
To obtain relevant evidence for making a final judgment on losses or account misstatements
When is the auditor not required to perform any Test of Controls (TOC)?
When the control risk assessment is at the maximum level
What does CR stand for in the context of control risk assessment?
Control Risk
What is the purpose of the Test of Balances in Substantive Testing?
To obtain relevant evidence for making a final judgment on losses or account misstatements
Which of the following is NOT a step in the audit planning process?
Assessing control risk at the maximum level for all assertions
What is the purpose of the Test of Controls phase in an audit?
To evaluate the design and operation of the internal control structure
Which of the following is NOT a procedure in the Test of Control phase in an IT environment?
Assessing control risk at the maximum level
What is the maximum control risk?
The greatest probability that a material misstatement will not be prevented or detected on a timely basis
What is the purpose of the preliminary assessment of control risk?
To plan test of controls and substantive testing
What is the purpose of the Test of Controls phase?
To evaluate the design and operation of the internal control structure
What is included in the audit planning process?
All of the above
What is the purpose of the preliminary assessment of control risk?
To plan test of controls and substantive testing
What is the purpose of the Test of Controls phase in an IT environment?
To evaluate the design and operation of the internal control structure
What is the maximum control risk?
The greatest probability that a material misstatement will not be prevented or detected on a timely basis
Test your knowledge on audit planning steps and the importance of reviewing an organization's policies, procedures, and structure. This quiz covers topics such as conducting preliminary arrangements with clients, engagement letters, and management control. Challenge yourself and see how well you understand the planning process in auditing.
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