The Multiple Choice Questions Blog

In respect of an assurance engagement, which ONE of the following is the least persuasive method of gathering evidence?

Select ONE answer:

1. Inspection of a sales invoice
2. Inspection of a supplier’s invoice
3. Reperformance of a client’s supplier statement reconciliation
4. Reperformance of a depreciation calculation

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 – Inspection of a sales invoice produced by the client would constitute the least persuasive method of gathering evidence as it is the least reliable of all the options. The supplier’s invoice is more reliable as it comes from a third party and reperformance of calculations and reconciliations is also more reliable as this evidence is generated by the assurance provider/reporting accountant.
2. Not correct
3. Not correct
4. Not correct

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For the following statement below concerning computer assisted audit techniques select whether it is true, false, it depends or of minor efficiency only.

• Audit software makes use of the client’s specialised software to run audit procedures.

Select ONE answer:

1. true
2. it depends
3. of minor efficiency only
4. false

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 – Audit software uses the assurance provider’s specialised software. It can extract and analyse information from the client’s system. Test data are used to test controls by entering data that should activate a control and verifying that it does.

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

For the following statement below concerning computer assisted audit techniques select whether it is true, false, it depends or of minor efficiency only.

• Test data can be used to ensure that controls in the client’s system are operating as the assurance provider expects them to.

Select ONE answer:

1. false
2. it depends
3. true
4. of minor efficiency only

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 – Audit software uses the assurance provider’s specialised software. It can extract and analyse information from the client’s system. Test data are used to test controls by entering data that should activate a control and verifying that it does.
4. Not correct

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

For the following statement below concerning computer assisted audit techniques select whether it is true, false, it depends or of minor efficiency only.

• Computer assisted audit techniques can be used to perform the assurance procedure of “re-performance”.

Select ONE answer:

1. false
2. true
3. it depends
4. of minor efficiency only

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 – Audit software uses the assurance provider’s specialised software. It can extract and analyse information from the client’s system. Test data are used to test controls by entering data that should activate a control and verifying that it does.
3. Not correct
4. Not correct

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

Assurance providers obtain evidence using procedures set out in ISA 500.

For the following test select the type of procedure which is being used.

• The assurance provider attends the inventory count and ensures that it is being carried out in accordance with the issued instructions.

Select ONE answer:

1. Observation
2. Inspection
3. Confirmation
4. Application

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 – Documents and other pieces of evidence are inspected. Processes are observed. External confirmations involve seeking evidence from a third party.
2. Not correct
3. Not correct
4. Not correct

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