The Ultimate Auditing Knowledge Quiz!

28 Questions | Total Attempts: 156

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The Ultimate Auditing Knowledge Quiz!

One of the ways in which a business can keep track of its books of account is carrying out an audit and finding out if they reflect an accurate and fair view of the financial position. This is an ultimate auditing knowledge quiz below designed to see how well you understand the topic.


Questions and Answers
  • 1. 
    Which answer is not a approach to internal control evaluation.
    • A. 

      Evaluates weaknesses

    • B. 

      Modify files to improve system

    • C. 

      Know what control procedures have been implemented

    • D. 

      Find the threats

  • 2. 
    The __________ Audit Approach provides a logical framework for carrying out a audit.
  • 3. 
    Which of these are types of risk when conducting an Audit?
    • A. 

      Confirmation

    • B. 

      Inherent

    • C. 

      Control

    • D. 

      Detection

    • E. 

      Vouching

  • 4. 
    Which of these is part of the process of conducting an audit?
    • A. 

      Evaluating evidence

    • B. 

      Conducting training

    • C. 

      Planning

    • D. 

      Communicating results

    • E. 

      Collecting evidence

  • 5. 
    Which of the following is a characteristic of auditing?
    • A. 

      Auditing is a systematic, step-by-step process

    • B. 

      Auditing involves the collection and review of evidence

    • C. 

      Auditing involves the use of established criteria to evaluate the evidence

    • D. 

      All of the above are characteristics of auditing

  • 6. 
    Which of the following is not a reason an internal auditor should participate in internal control reviews during the design of a new system?
    • A. 

      It is more economical to design controls during the design stage than to do so later.

    • B. 

      It eliminates the need for testing control during regular audits

    • C. 

      It minimizes the need for expensive post system implementation modification

    • D. 

      It permits the design of audit trail while they are economical

  • 7. 
    Which type of audit involves a review of general and application controls, with a focus on determining if there is compliance with policies and adequate safe-gaurding assets.
    • A. 

      Information systems audit

    • B. 

      Financial audit

    • C. 

      Operational audit

    • D. 

      Compliance audit

  • 8. 
    What risk is best defined as the risk that auditors and their audit procedures will not detect a material error or misstatement?
    • A. 

      Control Risk

    • B. 

      Inherent Risk

    • C. 

      Detection Risk

    • D. 

      Material Risk

  • 9. 
    What risk is best defined as the susceptibility to material risk in the absences of controls?
    • A. 

      Back up Risk

    • B. 

      Control Risk

    • C. 

      Inherent Risk

    • D. 

      Detection Risk

  • 10. 
    What risk is best defined as the risk that a material misstatement will get through the internal control structure and into the financial statements?
    • A. 

      Control Risk

    • B. 

      Detection Risk

    • C. 

      Financial Risk

    • D. 

      Inherent Risk

  • 11. 
    A audit that is concerned with the economical and efficient use of resources and the accomplishment of established goals objectives. 
    • A. 

      Information systems Audit

    • B. 

      Financial Audit

    • C. 

      IIA Audit

    • D. 

      Operational Audit

  • 12. 
    An audit that reviews the controls of an AIS to asses its compliance with internal control policies and procedures and its effectiveness in safeguarding assets is a:
    • A. 

      Operational audit

    • B. 

      Finance audit

    • C. 

      Compliance audit

    • D. 

      Information systems audit

  • 13. 
    A audit the examines the reliability and integrity of accounting records and correlates with the first of the five scope standards is a:
    • A. 

      Financial audit

    • B. 

      Compliance audit

    • C. 

      Information system audit

    • D. 

      Operations audit

  • 14. 
    According to the Institute of Internal Auditors (IIA), the purpose of an internal audit is to evaluate the adequacy and effectiveness of a company's internal control system. Which of these is part of an auditors responsibilities?
    • A. 

      Review the reliability and integrity of operation and financial information and how it is identified, measured, classified, and reported

    • B. 

      Determine if the systems designed to comply with operating and reporting policies, plans, procedures, laws and regulations are actually being followed

    • C. 

      Review how assets are safegaurded, and verify the existence of assets as appropriate.

    • D. 

      Examine company resources to determine how effectively land efficiently they are used

    • E. 

      Review company operations and programs to determine if they are being carried out as planned and if they are meeting their objectives

    • F. 

      All of the above

  • 15. 
    Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic action and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users.
    • A. 

      True

    • B. 

      False

  • 16. 
    At what step in the audit process do the concepts of reasonable assurance and materiality enter into the auditors decision process?
    • A. 

      Planning

    • B. 

      Evidence collection

    • C. 

      Evidence evaluation

    • D. 

      They are important in all three steps

  • 17. 
    What is the four step approach to internal control evalutaion that provides a logical framework for carrying out an audit called?
    • A. 

      Inherent risk analysis

    • B. 

      Systems review

    • C. 

      Tests of controls

    • D. 

      Risk based approach to auditing

  • 18. 
    Which of the following procedures is not used to detect unauthorized program changes?
    • A. 

      Source code comparison

    • B. 

      Parallel simulation

    • C. 

      Reprocessing

    • D. 

      Reprogramming code

  • 19. 
    Which of the following procedures is used when testing a newly developed program and keeping a copy of its source code?
    • A. 

      Reprogramming code

    • B. 

      Parallel simulation

    • C. 

      Reprocessing

    • D. 

      Source code comparison

  • 20. 
    Which of the following is a concurrent audit technique that monitors all transactions and collects data on those that meet certain characteristics affecting real data?
    • A. 

      Integrated test facility

    • B. 

      Snapshot

    • C. 

      Scarf

    • D. 

      Audit hooks

  • 21. 
    Which of the following is a technique that records the content of both a transaction record and a related master file record before each processing step?
    • A. 

      SCARF

    • B. 

      Audit hook

    • C. 

      Snapshot

    • D. 

      Integrated test facility

  • 22. 
    Which of the following is a concurrent audit technique that embeds audit routines into application software to flag certain kinds of transactions that might be indicative of fraud?
    • A. 

      SCARF

    • B. 

      Snapshots

    • C. 

      Integrated test facility

    • D. 

      Audit hooks

  • 23. 
    Which of these  inserts a dummy company or division into a computer system to test transaction data without affect real data?
    • A. 

      Snapshot

    • B. 

      Scarf

    • C. 

      Integrated test facility

    • D. 

      Audit hooks

  • 24. 
    Which of the following is a computer technique that assists an auditor in understanding program logic by identifying all occurrences of specific variables?
    • A. 

      Mapping program

    • B. 

      Program tracing

    • C. 

      Automated flowcharting

    • D. 

      Scanning routine

  • 25. 
    Which of the following is a computer program written especially for audit use?
    • A. 

      GAS

    • B. 

      CAAT

    • C. 

      ITF

    • D. 

      CIS

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