The Multiple Choice Questions Blog

For the following statement below, select whether it is of no relevance, depending on the size of the client, true or false in respect of the procedures to obtain evidence.

• Physical examination of property, plant and equipment confirms ownership.

Select ONE answer:

1. True
2. False
3. Of no relevance
4. Depending on the size of the client

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – Physical examination of property, plant and equipment confirms its existence, which may belong to a third party. The reliability of the inquiry depends on who is providing the information. A third party, e.g., a bank, would normally be a reliable source.
3. Not correct
4. Not correct

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Which ONE of the following statements are correct regarding factors which influence sample sizes for tests of controls?

Select ONE answer:

1. An increase in the extent to which the risk of material misstatement is reduced by the operating effectiveness of controls will decrease the sample size
2. An increase in the number of sampling units within the population will increase the sample size
3. A decrease in the tolerable misstatement will decrease the sample size
4. An increase in the expected misstatement will decrease the sample size

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – ISA 530 states factors influencing sample sizes for tests of controls include: An increase in the number of sampling units will have a negligible effect on the sample + A decrease in the tolerable misstatement will decrease sample size.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following statements are correct regarding factors which influence sample sizes for tests of controls?

Select ONE answer:

1. An increase in the number of sampling units within the population will increase the sample size
2. A decrease in the tolerable misstatement will decrease the sample size
3. An increase in the extent to which the risk of material misstatement is reduced by the operating effectiveness of controls will NOT decrease the sample size
4. A decrease in the expected misstatement will decrease the sample size

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – ISA 530 states factors influencing sample sizes for tests of controls include: An increase in the number of sampling units will have a negligible effect on the sample + A decrease in the tolerable misstatement will decrease sample size.

This work is licensed under a Creative Commons Attribution 4.0 International License.

When determining a sample size for tests of controls, an auditor should consider several factors.

For the factor below, select whether it would cause the same size to increase, decrease, have no impact or have only a negligible effect.

• A decrease in the auditor’s required confidence level

Select ONE answer:

1. Has only a negligible effect
2. Increase
3. Decrease
4. Have no impact

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – A decrease in the auditor’s required confidence level will lead to a decrease in sample size
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

When determining a sample size for tests of controls, an auditor should consider several factors.

For the factor below, select whether it would cause the same size to increase, decrease, have no impact or to have only a negligible effect.

• An increase in the number of invoices in the population

Select ONE answer:

1. Decrease
2. Has only a negligible effect
3. Increase
4. Have no impact

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – An increase in the population will have a negligible effect on sample size as it is not a factor that determines the sample size.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.