Audit

Author: Bi Gangfeng
Publisher:
Publish Date: 2004-08-01
Features: [Excerpt:]
1. What are the main categories of auditing?
2. Describe the relationship between government auditing and certified public accountant auditing?
3. What is an audit engagement letter? What are its main contents? How to understand the role of an audit engagement letter?
4. What is an audit plan? What are its basic contents?
5. What are audit materiality and audit risk? How to apply the materiality principle when preparing an audit plan?
6. What are the components of audit risk? What is the relationship between them?
7. What is audit sampling? What risks are involved?
8. What are attribute sampling and variable sampling? What methods are used in each?
9. Describe the methods of auditing.
[Exercises]
Part I: Multiple Choice
1. The risk that an auditor fails to detect significant errors in financial statements through designed audit procedures is:
A. Overreliance Risk
B. Control Risk
C. Detection Risk
D. Inherent Risk
2. If the audit materiality level differs across different financial statements in the same period, the auditor should choose:
A. Average
B. Lowest
C. Highest
D. Middle
3. If the audit risk is 3%, inherent risk is 60%, and control risk is 50%, the detection risk the auditor should bear is:
A. 10%
B. 20%
C. 15%
D. 5%
4. The specialized method by which auditors review various accounting vouchers, ledgers, statements, and other relevant materials is:
A. Review Method
B. Verification Method
C. Adjustment Method
D. Analytical Review
5. Audit sampling applies to both compliance testing and substantive testing, but not to the following procedures:
A. Observation
B. Confirmation
C. Inspection
D. Sequential Review
6. Audit sampling used based on the purpose and characteristics of substantive testing is called:
A. Fixed Sample Size Sampling
B. Stop-and-Go Sampling
C. Discovery Sampling
D. Variable Sampling
7. Auditor Xiao Zhao uses the systematic sampling method to select 10 vouchers from 3,000. The random starting point is the 40th voucher. The number of the 4th voucher selected is:
A. 70
B. 100
C. 140
D. 130
8. Auditing conducted by audit agencies and personnel on the fairness, legality, and compliance of the financial and accounting information of the audited entity refers to:
A. Financial and Fiscal Audit
B. Economic Responsibility Audit
C. Economic Benefit Audit
D. Financial and Legal Audit
Part II: Multiple Answers
1. Generally, audit risk consists of:
A. Inherent Risk
B. Prevention Risk
C. Control Risk
D. Detection Risk
2. The following items that belong to the audit engagement letter include:
A. Names of both parties
B. Purpose of engagement
C. Use of audit report
D. Audit scope
3. The general methods of audit inspection include:
A. Review Method
B. Verification Method
C. Calculation Method
D. Adjustment Method
4. According to the basis of sampling decision, audit sampling can be divided into:
A. Statistical Sampling
B. Non-Statistical Sampling
C. Variable Sampling
D. Attribute Sampling
5. When conducting substantive testing, auditors should pay attention to the sampling risks, including:
A. Incorrect Rejection Risk
B. Incorrect Acceptance Risk
C. Underreliance Risk
D. Overreliance Risk
6. The main content of government auditing is to legally conduct audit supervision on the financial, financial, and economic benefits of:
A. Governments at all levels
B. National finance and financial institutions
C. State-owned enterprises and institutions
D. Other units holding state-owned assets
7. The following items that belong to accounting responsibility include:
A. Being responsible for the truthfulness, legality, and completeness of accounting information and other relevant materials
B. Establishing and improving internal control systems
C. Ensuring the safety and integrity of assets
D. Being responsible for the truthfulness and legality of the audit report
8. When designing a sample, auditors should consider the following factors:
A. Audit objectives and stratification
B. Audit object population and sampling units
C. Degree of reliability and tolerable error
D. Sampling risk and non-sampling risk
Part III: True or False
1. In field audit work, the application of the concept of audit materiality is mainly based on the size of business transaction amounts, where larger amounts are considered important and smaller amounts are not.
2. The higher the level of inherent risk and control risk in auditing, the greater the possibility of significant errors, and correspondingly, the lower the required detection risk.
3. An audit engagement letter is a written contract signed by a certified public accountant and a client to confirm the relationship between the commissioning and entrusting of audit services, clarify the purpose of the audit, scope, and responsibilities and obligations of both parties.
4. Auditors can change the actual levels of audit risk and detection risk, but cannot change the actual levels of inherent risk and control risk.
5. Sampling risk emerged with the development of audit sampling techniques.