5 MC Auditing Problems

1. Procedures performed during the period between an interim date and the year-end date are called

a)year-end procedures.

b)substantive procedures.

c)roll-forward procedures.

d)interim procedures.

2. If both control risk and inherent risk are assessed as high,

a)few substantive procedures are required.

b)extensive substantive procedures are required.

c)controls will be tested extensively.

d)no substantive procedures are required.

3. When understanding the business, the auditor is likely to be alerted to fluctuations. These fluctuations are caused by all of the following EXCEPT

a)cyclical patterns of the client's business.

b)seasonal patterns of the client's business.

c)business decisions of the client.

d)business decisions of the external auditor.

4. When do the auditors first assess the inherent and control risk associated with the client's estimates? a)before the client acceptance decision is made

b)when the partner is reviewing the audit file for completion

c)during the concluding phase of the audit

d)when gathering an understanding of the business

5, Which approach will best reduce the estimation uncertainty of the allowance for doubtful accounts if an entity offers 45-day credit terms and the audit takes place two months after the fiscal year end? a)testing how management made the estimate

b)testing controls over the estimate process

c)developing a point estimate

d)obtaining evidence from year end to the date of the audit report