Question 1

Conclusions are typically documented by auditors in which type of work paper?

Accepted Answer

A) Audit planning memo. 
B) Audit program. 
C) Audit memoranda. 
D) Representation letter. 
A) Audit planning memo. 
B) Audit program. 
C) Audit memoranda. 
D) Representation letter. C

Question 2

The auditor's concern for potential fraud in the financial statements will most likely result in increased testing for the overstatement of revenues.

Accepted Answer

A) True 
 B)False  True

Question 3

Audit program Discuss the purpose of the audit program and its importance to the auditor.

Accepted Answer

An audit program specifies the actual procedures to be performed in gathering the required audit evidence about the assertions embodied in the client's financial statements.Because the audit program guides the overall conduct of the audit it is the single most important piece of documentation in an audit engagement.The program is an effective means for: · organizing and distributing audit work. · monitoring the audit process and progress. · reviewing for possible omission of material areas from the audit. · recording the audit work performed. · reviewing the completeness and persuasiveness of procedures performed.

Question 4

The reliability of audit evidence is a measure of the quality of the underlying evidence and is influenced by risk,potential management bias associated with the evidence,and the quality of the internal control system underlying the preparation of the evidence.

Accepted Answer

A) True 
 B)False

Question 5

Assertions are not relevant to an audit because they relate to the auditor and financial statements are management's responsibility instead of the auditor's.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is an example of poorly-developed audit documentation?

Accepted Answer

A) Clear communication as to how testing was performed,the results and conclusions. 
B) Organization and assembly of documentation in an orderly fashion. 
C) Headings that include the name and signature of the client representative that the auditor interacted with while performing testing. 
D) Authenticated identification of the person responsible for completing the procedure and conclusions. 
A) Clear communication as to how testing was performed,the results and conclusions. 
B) Organization and assembly of documentation in an orderly fashion. 
C) Headings that include the name and signature of the client representative that the auditor interacted with while performing testing. 
D) Authenticated identification of the person responsible for completing the procedure and conclusions.

Question 7

In a reasonable test,the auditor develops an expected value of an account by using data wholly or partly independent of the client's accounting information system.

Accepted Answer

A) True 
 B)False

Question 8

Sufficient evidence gathered by the auditor involves which of the following?

Accepted Answer

A) The quantity of evidence to be obtained. 
B) The type of evidence to be obtained. 
C) Obtaining limited evidence to achieve efficiency. 
D) The use of an audit program to obtain evidence. 
A) The quantity of evidence to be obtained. 
B) The type of evidence to be obtained. 
C) Obtaining limited evidence to achieve efficiency. 
D) The use of an audit program to obtain evidence.

Question 9

Some audit procedures may be performed prior to the end of the year under audit.

Accepted Answer

A) True 
 B)False

Question 10

The relevance of audit evidence depends on the audit assertion being tested.

Accepted Answer

A) True 
 B)False

Question 11

The auditor's job is to gather sufficient appropriate audit evidence on which to base an opinion.

Accepted Answer

A) True 
 B)False

Question 12

The reliability of a client's internal documentation is most affected by which of the following?

Accepted Answer

A) The auditor's independence. 
B) Management's motivation to misstate accounts. 
C) The type of audit report that will be issued. 
D) Management's ability to understand generally accepted audit standards. 
A) The auditor's independence. 
B) Management's motivation to misstate accounts. 
C) The type of audit report that will be issued. 
D) Management's ability to understand generally accepted audit standards.

Question 13

An example of an external document would include which of the following?

Accepted Answer

A) Vendor invoices. 
B) Customer orders. 
C) Confirmation replies from customers. 
D) All the above. 
A) Vendor invoices. 
B) Customer orders. 
C) Confirmation replies from customers. 
D) All the above.

Question 14

To be considered reliable evidence,confirmations must be controlled by which of the following individuals?

Accepted Answer

A) A client employee responsible for accounts receivable. 
B) An external auditor. 
C) A client's internal audit department. 
D) A client's controller or CFO. 
A) A client employee responsible for accounts receivable. 
B) An external auditor. 
C) A client's internal audit department. 
D) A client's controller or CFO.

Question 15

The client's verbal evidence is more reliable than evidence from independent outside sources.

Accepted Answer

A) True 
 B)False

Question 16

One strategy used by auditors in testing assertions is to perform directional testing to find overstatements or understatements.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is the primary source for evidence to corroborate the existence of pending litigation?

Accepted Answer

A) Vendor confirmations. 
B) Disclosures in financial statements. 
C) Management representation letters. 
D) Attorney confirmations. 
A) Vendor confirmations. 
B) Disclosures in financial statements. 
C) Management representation letters. 
D) Attorney confirmations.

Question 18

Vouching is a process that helps establish that recorded transactions are valid.

Accepted Answer

A) True 
 B)False

Question 19

Which one of the following statements is false?

Accepted Answer

A) Auditing includes the process of gathering evidence to test assertions. 
B) No general audit program suits the needs for all situations. 
C) Even though all audits are different,they can all be approached in the same manner. 
D) All audits involve testing management's assertions contained in written communications to another party and independently gathering evidence to test the relevant assertions. 
A) Auditing includes the process of gathering evidence to test assertions. 
B) No general audit program suits the needs for all situations. 
C) Even though all audits are different,they can all be approached in the same manner. 
D) All audits involve testing management's assertions contained in written communications to another party and independently gathering evidence to test the relevant assertions.

Question 20

Reprocessing of transactions involves which of the following?

Accepted Answer

A) Testing forward. 
B) Testing backward. 
C) Testing at a point in time. 
D) Directional testing either forward or backward. 
A) Testing forward. 
B) Testing backward. 
C) Testing at a point in time. 
D) Directional testing either forward or backward.

Conclusions are typically documented by auditors in which type of work paper?

The auditor's concern for potential fraud in the financial statements will most likely result in increased testing for the overstatement of revenues.

Audit program Discuss the purpose of the audit program and its importance to the auditor.

The reliability of audit evidence is a measure of the quality of the underlying evidence and is influenced by risk,potential management bias associated with the evidence,and the quality of the internal control system underlying the preparation of the evidence.

Assertions are not relevant to an audit because they relate to the auditor and financial statements are management's responsibility instead of the auditor's.

Which of the following is an example of poorly-developed audit documentation?

In a reasonable test,the auditor develops an expected value of an account by using data wholly or partly independent of the client's accounting information system.

Sufficient evidence gathered by the auditor involves which of the following?

Some audit procedures may be performed prior to the end of the year under audit.

The relevance of audit evidence depends on the audit assertion being tested.

The auditor's job is to gather sufficient appropriate audit evidence on which to base an opinion.

The reliability of a client's internal documentation is most affected by which of the following?

An example of an external document would include which of the following?

To be considered reliable evidence,confirmations must be controlled by which of the following individuals?

The client's verbal evidence is more reliable than evidence from independent outside sources.

One strategy used by auditors in testing assertions is to perform directional testing to find overstatements or understatements.

Which of the following is the primary source for evidence to corroborate the existence of pending litigation?

Vouching is a process that helps establish that recorded transactions are valid.

Which one of the following statements is false?

Reprocessing of transactions involves which of the following?

Auditing: Integral to the Economy

The Risk of Fraud and Mechanisms to Address Fraud: Regulation,corporate Governance,and Audit Quality

Internal Control Over Financial Reporting: Managements Responsibilities and Importance to the External Auditors

Professional Liability and the Need for Quality Auditor Judgments and Ethical Decisions

Professional Auditing Standards and the Audit Opinion Formulation Process

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, use, impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

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Exam 6: A Framework for Audit Evidence

Conclusions are typically documented by auditors in which type of work paper?

The auditor's concern for potential fraud in the financial statements will most likely result in increased testing for the overstatement of revenues.

Audit program Discuss the purpose of the audit program and its importance to the auditor.

The reliability of audit evidence is a measure of the quality of the underlying evidence and is influenced by risk,potential management bias associated with the evidence,and the quality of the internal control system underlying the preparation of the evidence.

Assertions are not relevant to an audit because they relate to the auditor and financial statements are management's responsibility instead of the auditor's.

Which of the following is an example of poorly-developed audit documentation?

In a reasonable test,the auditor develops an expected value of an account by using data wholly or partly independent of the client's accounting information system.

Sufficient evidence gathered by the auditor involves which of the following?

Some audit procedures may be performed prior to the end of the year under audit.

The relevance of audit evidence depends on the audit assertion being tested.

The auditor's job is to gather sufficient appropriate audit evidence on which to base an opinion.

The reliability of a client's internal documentation is most affected by which of the following?

An example of an external document would include which of the following?

To be considered reliable evidence,confirmations must be controlled by which of the following individuals?

The client's verbal evidence is more reliable than evidence from independent outside sources.

One strategy used by auditors in testing assertions is to perform directional testing to find overstatements or understatements.

Which of the following is the primary source for evidence to corroborate the existence of pending litigation?

Vouching is a process that helps establish that recorded transactions are valid.

Which one of the following statements is false?

Reprocessing of transactions involves which of the following?

Auditing: Integral to the Economy

The Risk of Fraud and Mechanisms to Address Fraud: Regulation,corporate Governance,and Audit Quality

Internal Control Over Financial Reporting: Managements Responsibilities and Importance to the External Auditors

Professional Liability and the Need for Quality Auditor Judgments and Ethical Decisions

Professional Auditing Standards and the Audit Opinion Formulation Process

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, use, impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

Filters