AUD Auditor Practice Questions

A company hires a new auditor who must decide whether to accept the engagement. What should the auditor assess first?

• AA. The complexity of the business
• BB. The audit cost
• CC. The client's reputation
• DD. The internal controls

During an audit, the auditor notices unusual transactions. What is the appropriate action?

• AA. Increase sample size
• BB. Report to management
• CC. Investigate further
• DD. Ignore them

An auditor is evaluating the effectiveness of internal controls. What is the first step?

• AA. Test transactions
• BB. Review past audits
• CC. Prepare a report
• DD. Identify control objectives

When evaluating the risk of material misstatement, what should an auditor consider?

• AA. Management's tone
• BB. All of the above
• CC. Past performance
• DD. Staff capabilities

When planning an audit engagement, the auditor should document what?

• AA. Risks identified
• BB. All of the above
• CC. Audit objectives
• DD. Client's financial statements

In assessing fraud risk, which of the following factors should the auditor consider?

• AA. All of the above
• BB. Staff turnover
• CC. Economic conditions
• DD. Organizational culture

During a test of controls, the auditor finds that a control activity has not been followed. What is the implication?

• AA. Disregard findings
• BB. Increase sample size
• CC. Reassess control risk
• DD. Report to management

During planning, an auditor should obtain an understanding of what?

• AA. The client's competitors
• BB. The client's industry
• CC. The client's internal controls
• DD. The client's process

An auditor is performing a walk-through of the revenue cycle. What is the primary purpose?

• AA. All of the above
• BB. Train staff
• CC. Understand the process
• DD. Test controls