The Auditor Is Most Likely Going to Perform Audit Data

question 65

Multiple Choice

The auditor is most likely going to perform audit data analytics (ADA) as a substantive test when the auditor has _______.

• A)performed tests of controls and concluded that the entity has strong controls
• B)performed tests of controls and concluded that the entity has weak controls
• C)completed the audit and is ready to issue the audit report
• D)confirmed the procedures to be conducted with the internal audit function

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Definitions:

Entity Concept

An accounting principle that treats a company as a separate legal and accounting entity distinct from its owners or other companies.

Full Consolidation

An accounting method where the parent company integrates the financial statements of all its subsidiaries, regardless of the percentage of ownership, into one consolidated set of financial statements.

Ownership Proportion

The percentage of shares or interest held in an entity, determining the extent of control or influence an owner has over that entity.

AASB 3

The Australian Accounting Standards Board standard that deals with the accounting treatment for business combinations.