1. Which of the following is an example of a substantive

audit procedure?

a) Reviewing the client's accounting policies and

procedures manual

b) Obtaining a letter of representation from the client's

management

c) Performing analytical procedures on the client's financial

statements

d) Testing the accuracy and completeness of the client's

sales transactions*

Rationale: Substantive audit procedures are those that

provide evidence about the validity of the assertions in the

financial statements, such as testing transactions, balances,

and disclosures. Option d is a substantive audit procedure

that tests the occurrence, completeness, accuracy, and cutoff assertions for sales. Options a and b are examples of

audit planning procedures, while option c is an example of

a risk assessment procedure.

2. What is the main purpose of audit sampling?

a) To reduce the cost and time of the audit

b) To increase the reliability and validity of the audit

evidence

c) To enable the auditor to draw conclusions about a

population based on a sample*

d) To comply with the auditing standards and regulations

Rationale: Audit sampling is the application of audit

procedures to less than 100% of the items in a population,

such that the auditor can make inferences about the