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AUE1501 ASSIGNMENT 6 FOR 2ND SEMESTER 2024
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AUE1501 ASSIGNMENT 6 FOR 2ND SEMESTER 2024
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AUE1501ASSIGNMENT 6 FOR 2ND SEMESTER 2024
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,Question 1
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Audit risk is an important auditing concept. Select the correct statement pertaining to audit risk.
a.
A business with inadequate internal controls in place, means that the control risk is high.
b.
Detection risk is part of the audit risk formula controlled by the audit client.
c.
A complex accounting calculation will increase the auditor’s assessment of control risk.
d.
The three elements of audit risk consist of control risk, inherent risk and audit risk.
Question 2
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A new customer wishes to purchase inventory on credit, at your shop. Select the first step that you
will insist should be followed by your staff
a.
Set up an accounts receivable account for the customer in the accounts receivable ledger.
b.
Request that a credit application form be completed by the customer.
, c.
Request a valid purchase order from the customer before processing the order.
d.
Create a correct purchase order, signed by the customer.
Question 3
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Audit risk has three components. Which one of the following in NOT a direct component of audit
risk?
a.
control risk
b.
materiality
c.
detection risk
d.
inherent risk
Question 4
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In the revenue and receipts cycle, one of the risks of the recording of sales function, is that invoices
are omitted from the sales journal. Select the control to mitigate the specific risk.
a.
An independent staff member performs a sequence check in the sales journal.
b.
Signed delivery notes are matched to their internal sales order and filed sequentially by delivery note.
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