Accounting Multiple Choice Question – 26 September 2025

For each of the following situations, select the most appropriate audit approach that should be used by the assurance firm.

The audit of a new client, recently started up, with just a few employees in its accounting department………..?

Select ONE answer:

1. Tests of controls only
2. Substantive procedures only
3. Analytical procedures only
4. A mix of tests of controls and substantive procedures

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 procedures only – a new client with few employees implies a lack of segregation of duties and hence high control risk. Therefore, reliance should not be placed on the internal control system. Audit evidence should be gathered using substantive procedures.
3. Not correct
4. Not correct

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