Question 1

In evaluating cost of evidence,which of the following evidence qualities of the audit usually has the lowest cost?

Accepted Answer

A) High quality. 
B) Medium quality. 
C) Low quality. 
D) All cost the same. 
A) High quality. 
B) Medium quality. 
C) Low quality. 
D) All cost the same.

Question 2

Why is the appropriateness of audit evidence obtained by the auditor important in forming an audit opinion? Describe the qualities information should have to be considered appropriate by the auditor.

Accepted Answer

Appropriateness is a measure of the qual

Question 3

Internal documentation is more reliable to the auditor if the internal control surrounding the documentation is considered strong than if it is considered weak.

Accepted Answer

A) True 
 B)False

Question 4

Audit standards of proper documentation Discuss the audit standards that must be applied to the auditor's documentation.Give five examples the types of documentation will be found in the audit work papers.

Accepted Answer

Auditing standards require that the audi

Question 5

Distinguish between internal documentation and external documentation as types of audit evidence.Give two examples of each.Which type is considered more reliable?

Accepted Answer

Internal documentation involves the audi

Question 6

Which of the following types of audit evidence is the most reliable?

Accepted Answer

A) Evidence from the client's organization. 
B) Evidence from a poorly controlled system. 
C) Directly observable evidence. 
D) Facsimiles of documents. 
A) Evidence from the client's organization. 
B) Evidence from a poorly controlled system. 
C) Directly observable evidence. 
D) Facsimiles of documents.

Question 7

The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance.

Accepted Answer

A) True 
 B)False

Question 8

When may audit procedures be performed? I - on the balance sheet date. II - prior to the balance sheet date. III - subsequent to the balance sheet date.

Accepted Answer

A) I only. 
B) I and III only. 
C) II only. 
D) I,II,and III. 
A) I only. 
B) I and III only. 
C) II only. 
D) I,II,and III.

Question 9

External documentation may lack reliability.Which of the following is the most probable reason for that?

Accepted Answer

A) The external party may be competent in performing duties. 
B) The documentation may be properly understood by the client in the response. 
C) The auditor may decide not to use the documentation and replace it with other documents. 
D) The documentation may have been altered if the process is not controlled from inception. 
A) The external party may be competent in performing duties. 
B) The documentation may be properly understood by the client in the response. 
C) The auditor may decide not to use the documentation and replace it with other documents. 
D) The documentation may have been altered if the process is not controlled from inception.

Question 10

What is determined to be appropriate and sufficient will be affected by which of the following?

Accepted Answer

A) The client's risk of material misstatement. 
B) The risk of material weakness in internal controls. 
C) Either a or b. 
D) None of the above. 
A) The client's risk of material misstatement. 
B) The risk of material weakness in internal controls. 
C) Either a or b. 
D) None of the above.

Question 11

Confirmation statements from banks are common business documents.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following types of audit evidence is the least reliable?

Accepted Answer

A) Evidence from the client's organization. 
B) Evidence derived from a well-controlled system. 
C) Evidence from independent outside sources. 
D) Original documents. 
A) Evidence from the client's organization. 
B) Evidence derived from a well-controlled system. 
C) Evidence from independent outside sources. 
D) Original documents.

Question 13

The greatest risk of recording transactions in the incorrect period occurs during the roll-forward period.

Accepted Answer

A) True 
 B)False

Question 14

An auditor selects a sample of items recorded and traces them back to the supporting documentation.This is an example of which of the following?

Accepted Answer

A) Directional testing for existence. 
B) Directional testing for completeness. 
C) Direct testing for valuation. 
D) Direct testing for rights. 
A) Directional testing for existence. 
B) Directional testing for completeness. 
C) Direct testing for valuation. 
D) Direct testing for rights.

Question 15

Directional testing is important to an auditor because of which of the following factors?

Accepted Answer

A) Certain accounts are more prone to be misstated by overstatement than others. 
B) The auditor must remain organized when conducting an audit. 
C) The primary concern of the auditor is the understatement of asset and revenue accounts. 
D) It tests for existence and completeness simultaneously. 
A) Certain accounts are more prone to be misstated by overstatement than others. 
B) The auditor must remain organized when conducting an audit. 
C) The primary concern of the auditor is the understatement of asset and revenue accounts. 
D) It tests for existence and completeness simultaneously.

Question 16

Audit documentation should generally be retained for at least seven years.

Accepted Answer

A) True 
 B)False

Question 17

Proper audit documentation

Accepted Answer

Audit documentation serves as the primar

Question 18

Audit documentation serves as support for the financial statements.

Accepted Answer

A) True 
 B)False

Question 19

Which one of the following would be the least reliable type of evidence?

Accepted Answer

A) Confirmations returned by bank directly to the auditor. 
B) Letters of communication from the Securities Exchange Commission. 
C) Physical examination of perpetual inventory. 
D) Evidence from an easily overridden information system. 
A) Confirmations returned by bank directly to the auditor. 
B) Letters of communication from the Securities Exchange Commission. 
C) Physical examination of perpetual inventory. 
D) Evidence from an easily overridden information system.

Question 20

Audit evidence is also referred to as an audit opinion.

Accepted Answer

A) True 
 B)False

In evaluating cost of evidence,which of the following evidence qualities of the audit usually has the lowest cost?

Why is the appropriateness of audit evidence obtained by the auditor important in forming an audit opinion? Describe the qualities information should have to be considered appropriate by the auditor.

Internal documentation is more reliable to the auditor if the internal control surrounding the documentation is considered strong than if it is considered weak.

Audit standards of proper documentation Discuss the audit standards that must be applied to the auditor's documentation.Give five examples the types of documentation will be found in the audit work papers.

Distinguish between internal documentation and external documentation as types of audit evidence.Give two examples of each.Which type is considered more reliable?

Which of the following types of audit evidence is the most reliable?

The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance.

When may audit procedures be performed? I - on the balance sheet date. II - prior to the balance sheet date. III - subsequent to the balance sheet date.

External documentation may lack reliability.Which of the following is the most probable reason for that?

What is determined to be appropriate and sufficient will be affected by which of the following?

Confirmation statements from banks are common business documents.

Which of the following types of audit evidence is the least reliable?

The greatest risk of recording transactions in the incorrect period occurs during the roll-forward period.

An auditor selects a sample of items recorded and traces them back to the supporting documentation.This is an example of which of the following?

Directional testing is important to an auditor because of which of the following factors?

Audit documentation should generally be retained for at least seven years.

Proper audit documentation

Audit documentation serves as support for the financial statements.

Which one of the following would be the least reliable type of evidence?

Audit evidence is also referred to as an audit opinion.

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

In evaluating cost of evidence,which of the following evidence qualities of the audit usually has the lowest cost?

Why is the appropriateness of audit evidence obtained by the auditor important in forming an audit opinion? Describe the qualities information should have to be considered appropriate by the auditor.

Internal documentation is more reliable to the auditor if the internal control surrounding the documentation is considered strong than if it is considered weak.

Audit standards of proper documentation Discuss the audit standards that must be applied to the auditor's documentation.Give five examples the types of documentation will be found in the audit work papers.

Distinguish between internal documentation and external documentation as types of audit evidence.Give two examples of each.Which type is considered more reliable?

Which of the following types of audit evidence is the most reliable?

The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance.

When may audit procedures be performed? I - on the balance sheet date. II - prior to the balance sheet date. III - subsequent to the balance sheet date.

External documentation may lack reliability.Which of the following is the most probable reason for that?

What is determined to be appropriate and sufficient will be affected by which of the following?

Confirmation statements from banks are common business documents.

Which of the following types of audit evidence is the least reliable?

The greatest risk of recording transactions in the incorrect period occurs during the roll-forward period.

An auditor selects a sample of items recorded and traces them back to the supporting documentation.This is an example of which of the following?

Directional testing is important to an auditor because of which of the following factors?

Audit documentation should generally be retained for at least seven years.

Proper audit documentation

Audit documentation serves as support for the financial statements.

Which one of the following would be the least reliable type of evidence?

Audit evidence is also referred to as an audit opinion.

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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