The Multiple Choice Questions Blog

The following is an example of a test that an assurance firm might use at the gathering-evidence stage of an assignment.

For the example below, select the type of procedure that the test illustrates.

• Using computer-assisted audit tools (CAATs) to check the ageing of the year-end list of aged receivables

Select ONE answer:

1. Discussion
2. Confirmation
3. Recalculation
4. Reperformance

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 – Reperformance is the auditor’s independent execution of procedures or controls which were originally performed as part of the entity’s internal control, therefore using CAATs to check the ageing of the year-end list of aged receivables is a reperformance of that ageing analysis, which is itself a control over the recoverability of receivables.

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The following is an example of a test that an assurance firm might use at the gathering-evidence stage of an assignment.

For the example below, select the type of procedure that the test illustrates.

• Adding the list of year-end receivables

Select ONE answer:

1. Discussion
2. Confirmation
3. Recalculation
4. Reperformance

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 – Recalculation consists of checking the mathematical accuracy of documents or records, therefore casting the list of year-end receivables is a recalculation procedure.
4. Not correct

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Two types of procedures used in gathering evidence are tests of controls and substantive procedures.

For the following example, select the type of procedure that is illustrated below.

• Comparing this year’s sales figures to those of previous years

Select ONE answer:

1. Test of control
2. Substantive procedure
3. Depends on the size of the business
4. Consult a senior colleague

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 – Substantive procedure – remembering that substantive procedures include analytical procedures, which is what this describes
3. Not correct
4. Not correct

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

Two types of procedures used in gathering evidence are tests of controls and substantive procedures.

For the following example, select the type of procedure that is illustrated below.

• Observing dispatch procedures

Select ONE answer:

1. Test of control
2. Substantive procedure
3. Depends on the size of the business
4. Consult a senior colleague

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 – Test of control – that despatch procedures are being properly followed
2. Not correct
3. Not correct
4. Not correct

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

Two types of procedures used in gathering evidence are tests of controls and substantive procedures.

For the following example, select the type of procedure that is illustrated below.

• Examining the instructions issued for a year-end physical inventory count

Select ONE answer:

1. Depends on the size of the business
2. Consult a senior colleague
3. Substantive procedure
4. Test of control

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 – Test of control – that the instructions are likely to lead to an accurate count

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