To obtain evidential matter about control risk, an auditor selects tests from a variety of techniques including: A)Inquiry. B)Analytical procedures. C)Calculation. D)Confirmation.
The independent auditor selects several transactions in each functional area and traces them through the entire system, paying special attention to evidence about whether or not the control activities are in operation. This is an example of a(n): A)Analytical procedure. B)Test of controls. C)Substantive procedure. D)Functional test.
Which of the following procedures most likely would provide an auditor with evidence about whether an entity's internal control is suitably designed to prevent or detect material misstatements? A)Scanning the journals produced by the internal control system. B)Performing analytical procedures using data aggregated at a high level. C)Vouching a sample of transactions directly related to the controls. D)Observing the entity's personnel applying the controls.
Reports on service organizations typically: A)provide reasonable assurance that their financial statements are free of material misstatements. B)ensure that the entity will not have any misstatements in areas related to the service organization's activities. C)ensure that the auditee is billed correctly. D)assess whether the service organization's controls are suitably designed to achieve internal control objectives.