1.

The development of a general strategy and a detailed approach for the expected nature, timing and extent of audit
refers to:

A. Supervision

B. Direction

C. Monitoring

D. Audit planning

2. Adequate planning helps ensure that (select the exception):

A. Appropriate attention is devoted to important areas of the audit

B. Potential problems are identified

C. An unqualified opinion.is expressed

D. Work is completed expeditiously.

3. Which of the following is most likely to require special planning considerations related to asset valuation?

A. Inventory is comprised of diamond rings.

B. The client has recently purchased an expensive copy machine.

C. Assets consisting less than P250 are expensed even when D. the expected life exceeds one year.

D. Accelerated depreciation methods are used for amortizing the costs of factory equipment.

4. Which of the following statements is incorrect?

A. The auditor should plan the audit so that the engagement will be performed in an effective
manner.

B. Planning an audit involves establishing the overall audit strategy for the engagement and developing
the audit plan, in order to increase audit risk to an unacceptably high level.

C. Planning involves the engagement partner and other key members of the engagement team to benefit
from their experience and insight and to enhance the effectiveness and efficiency of the planning
process.

D. Planning is not a discrete phase of an audit, but rather a continual and iterative process that often
begins shortly after (or in connection with) the completion of the previous audit and continues until the
issuance of the auditor's report.
5. With respect to planning an audit, which of the following statements is always true?

A. It is acceptable to perform a portion of the audit of a continuing audit client at interim dates.

B. An engagement should not be accepted after the client's year-end.

C. An inventory count must be observed at year-end.

D. Final staffing decisions must be made prior to completion of the planning stage.

6. Once the overall audit strategy has been established, the auditor is able to start the development of a more
detailed audit plan to address the various matters identified in the overall audit strategy. The extent of planning will
vary according to the following:

A. Size of the audit client.

B. Auditor's experience with the entity and knowledge of the business.

C. The nature and complexity of the audit engagement.

D. All of these affect the extent of planning.

7. Which of the following is not considered by the CPA when he makes an overall audit plan?

A. The content of the representation letters.

B. The effect of information technology on the audit.

C. Identification of complex accounting areas including those involving accounting estimates.

D. The nature and timing of reports and other communication with the entity that are expected under the
engagement.

8.Cost-benefit considerations are part of audit planning. In relation to this, which of the following audit procedures is
usually the least costly to perform?

A. Analytical procedures.

B. Tests of controls.

C. Tests of balances.

D. Substantive tests of transactions.

9. This is a listing of all the things which the auditor will use to gather sufficient appropriate audit evidence:
 A. Audit procedures

B. Audit program

C. Audit risk model

D. Audit plan

10.In designing audit programs, an auditor should establish specific audit objectives that related primarily to the

A. Timing of audit procedures

B. Cost-benefit of gathering evidence

C. Selected audit techniques.

D. Financial statement assertions.