Name: Date: February 1, 2019

Quiz: Acctg 011- Substantive Tests and Detection Risk

Test I. True or False.

Test II. Match each of the listed common audits tests with the techniques that was used. Write the letter of your answer on the
space provided.
A. Tracing B. Analytical
C. Vouching D. Re-performance
E. Confirmation F. Inspection

_____ 1. Search for unrecorded liabilities.

_____ 2. Trace shipping documents to sales invoices and entries in sales journal.
_____ 3. Examine lease agreements.
_____ 4. Obtain evaluate aging schedule.
_____ 5. Re-compute information on sales invoice.

Test III. Multiple Choice. Write your answer on the space provided in small letter.

_____ 1. The most reliable form of audit evidence is:

A. Written documents.
B. Visual observation of a transaction or event by the auditor.
C. Oral representation of the third parties.
D. Analytical procedures.

_____ 2. Which of the following is not true of tests of controls?

A. The auditor’s assessment of risks of material misstatement at the assertion level includes an
expectation that the controls are operating effectively.
B. Tests of controls are applied when substantive procedures alone provide sufficient appropriate
audit evidence at the assertion level.
C. The greater the reliance the auditor places on the effectiveness of a control, the more
persuasive the audit evidence the auditor must obtain.
D. Tests of controls are audit procedures designed to evaluate the operating effectiveness of
controls in preventing, or detecting and correcting, material misstatements at the assertion
level.

______ 3. In designing and performing tests of controls, the auditor must do all the following except:

A. Determine whether the controls to be tested depend upon other controls (indirect controls).
B. Determine if it is necessary to obtain audit evidence supporting the effective operation of the
auditee’s industry controls.
C. Perform other audit procedures in combination with inquiry to obtain audit evidence about the
operating effectiveness of the controls, including: how the controls were applied at relevant
times; the consistency with which they were applied; and by whom or by what means they
were applied.
D. Test the operating effectiveness of controls at the same time as evaluating their design and
implementation.

______ 4. Which of the following statements about substantive procedures is not true?

A. Substantive procedures comprise tests of details and substantive analytical procedures.

B. Auditors perform other audit procedures in combination with inquiry to obtain audit evidence
about the operating effectiveness of the controls.
 C. Tests of details of transactions are audit procedures related to examining the processing of
particular classes of transactions through the accounting systems.
D. Tests of balances are substantive tests that either provide reasonable assurance of the validity
of a general ledger balance or identify a misstatement in the account.

______ 5. That transactions and events have been recorded in the correct accounting period is what
management assertion?

A. Valuation
B. Cut-off
C. Classification
D. Occurrence

Test IV. Enumeration

1-5 Common types of substantive tests

6-8 Analytical Procedures

9-10 Aspects of sampling risk