ACCTG32 ESTABLISHING OVERALL AUDIT STRATEGY MIDTERM L1P1

ASSIGNMENT

Multiple Choice
Identify the choice that best completes the statement or answers the question.

_B___ 1. Audit Planning

This involves establishing the overall audit strategy for the engagement and developing an audit plan, in order
to reduce audit risk to an acceptably low level.
a. Audit procedures c. Audit program
b. Audit planning d. Audit working papers

___D_ 2. The overall audit stratefy sets the scope, timing and direction of the audit, and guides the development of the
more detailed audit plan.

The audit plan is more detailed than the overall audit strategy and includes to be performed by engagement
team members in order to obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably
low level.
a. True, true c. False, false
b. True, false d. False, true

___A_ 3. The overall audit strategy should be updated and changed as necessary during the course of the audit.

The overall audit plan should be updated and changed as necessary during the course of the audit.
a. True, true c. False, false
b. False, true d. True, false

___C_ 4. In planning an audit engagement, the auditor is required to develop and document a(an)
I. Audit Plan
II. Flowchart
III. Overall Audit Strategy
 a. Both II and III c. Both I and III
b. Both I and II d. I , II and III

___A_ 5. The nature and extent of planning will vary according the following except
a. Size of the audit firm
b. Complexity of the entity
c. Auditors experience with the entity
d. Change in circumstances that occur during the audit engagement

___B_ 6. Adequate audit planning helps ensure that appropriate attention is devoted:
1. To important areas of the audit
2. So that potentia problems are pronptly identified and resolved
3. So that the wok is performed in an effective and efficient manner
a. yes, yes, no c. yes, no, no
b. yes, yes, yes d. yes, no, yes

___A_ 7. Which of the following is not one of the three main reasons why the auditor should property plan
engagements?
a. To enable proper on-the-job training of employees.
b. To enable the auditor to obtain sufficient appropriate evidence.
c. To avoid misunderstandings with the client.
d. To help keep audit costs reasonable.

____A 8. Overall audit plan should

1. Precede actiom
2. Be flexible
3. Be cost beneficial
a. yes, yes, yes c. yes, yes, no
b. no, no, yes d. no, yes, yes
____C 9. Overall Audit Strategy
The following are the matters to be considered by the auditor in establishing the overall audit strategy, except
a. Defining the scope of the examination
b. Assess risk and materiality
c. Computation of audit fees
d. Ascertaining the reporting objectives of the engagement

___C_ 10. In developin the overall audit strategy for a new client, factor not be considered is:
a. The terms of the engagement and any statutory responsibilities.
b. The clients business, including the structure of the organization and accounting system
used.
c. the specific procedures to be performed to gather audit evidence.
d. The audit risk, and procedures to be performed to achieve audit objectives.