The Multiple Choice Questions Blog

To gather sufficient and appropriate evidence, the auditor may use external confirmation requests.

For the following statement regarding external confirmation requests, select whether it is of no relevance, depends on the type of business, or is true or false.

• A positive confirmation request ordinarily provides more reliable audit evidence than a negative confirmation request.

Select ONE answer:

1. True
2. No relevance
3. Depends on the type of business
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 1

1. Correct – A positive confirmation is more reliable than a negative confirmation as in the first case, a response is always sought.
2. Not correct
3. Not correct
4. Not correct

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To gather sufficient and appropriate evidence, the auditor may use external confirmation requests.

For the following statement regarding external confirmation requests, select whether it is of no relevance, depends on the type of business, or is true or false.

• A sample of confirmation requests drawn from the client’s list of balances is more appropriate for receivables than for payables.

Select ONE answer:

1. No relevance
2. Depends on the type of business
3. False
4. True

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 – A sample taken from a list of receivables is more effective than for payables, as in this way testing the balance for overstatement is carried out directly. For payables, the auditor’s key concern is that of understatement and testing a sample from the payables listed will not test understatement.

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

To gather sufficient and appropriate evidence, the auditor may use external confirmation requests.

For the following statement regarding external confirmation requests, select whether it is of no relevance, depends on the type of business, or is true or false.

• A positive confirmation request always asks respondents to reply to the auditor, indicating whether they agree with the information provided.

Select ONE answer:

1. No relevance
2. Depends on the type of business
3. False
4. True

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 – Positive confirmations may request that the respondent provides the balance owing as opposed to simply confirming the balance stated.
4. Not correct

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For the following description below, select whether they describe analytical review, monetary unit sampling, block selection or systematic selection.

• Alex is checking whether purchase invoices have been authorised for payment. He has selected all the November purchase invoices as his sample and has reviewed them for an authorisation signature.

Select ONE answer:

1. monetary unit sampling
2. block selection
3. systematic selection
4. analytical review

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 – Systematic selection involves selecting items using a constant interval between selections, the first interval having a random start.
3. Not correct
4. Not correct

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

For the following description below, select whether they describe analytical review, monetary unit sampling, block selection or systematic selection.

• Peter is auditing trade accounts receivable. Materiality is £25,000. The sample is selected by choosing balances that contain each 25,000th £1 on a cumulative basis.

Select ONE answer:

1. monetary unit sampling
2. block selection
3. systematic selection
4. analytical review

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 – Systematic selection involves selecting items using a constant interval between selections, the first interval having a random start.
2. Not correct
3. Not correct
4. Not correct

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