Question 1

Which of the following is not a type of internal documentation?

Accepted Answer

A)  Legal documents. 
B)  Business documents. 
C)  Third-party documents. 
D)  Accounting documents. 
A)  Legal documents. 
B)  Business documents. 
C)  Third-party documents. 
D)  Accounting documents. C

Question 2

Relevance and reliability of evidence make up the appropriateness of audit evidence.

Accepted Answer

A) True 
 B)False  True

Question 3

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 quality of evidence. Audit evidence that is considered appropriate contains the characteristics of relevance and reliability. Relevant evidence refers to the assertion being tested. Reliability refers to the relative truthfulness of the assertion.

Question 4

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

Question 5

Which one of the following is the primary reason for documenting audit work?

Accepted Answer

A)  To prevent litigation by other parties that question the audit performance. 
B)  To provide a stand-alone medium that gives audit conclusions and supports the opinion. 
C)  To give the client a full reporting of all work performed on their behalf. 
D)  To supply a point of reference for all auditors performing the work subsequently. 
A)  To prevent litigation by other parties that question the audit performance. 
B)  To provide a stand-alone medium that gives audit conclusions and supports the opinion. 
C)  To give the client a full reporting of all work performed on their behalf. 
D)  To supply a point of reference for all auditors performing the work subsequently.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Audit documentation serves as support for the financial statements.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

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 11

When the auditor used the audit procedure vouching she is primarily concerned with which of the following assertions?

Accepted Answer

A)  Completeness. 
B)  Existence. 
C)  Authorization. 
D)  Classification. 
A)  Completeness. 
B)  Existence. 
C)  Authorization. 
D)  Classification.

Question 12

While inspecting documents, auditors should use original documents rather than copies, because copies are easy for management to falsify.

Accepted Answer

A) True 
 B)False

Question 13

Audit procedures.
Discuss how each of the following procedures could be used in the audit of fixed assets, e.g., various types of equipment used in the business.

Accepted Answer

The answer of Audit procedures.
Discuss how each of the following...

Question 14

Recalculations of the client's computations would not include which of the following types of evidence?

Accepted Answer

A)  Cutoff. 
B)  Footing. 
C)  Extension. 
D)  Cross-footing. 
A)  Cutoff. 
B)  Footing. 
C)  Extension. 
D)  Cross-footing.

Question 15

Vouching of transactions deals with 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.

Question 16

Appropriateness deals with the quantity of evidence the auditor collects, whereas sufficiency deals with the quality of evidence the auditor collects.

Accepted Answer

A) True 
 B)False

Question 17

The processes used by management in developing estimates include which of the following?

Accepted Answer

A)  Controls over the process. 
B)  The reliability of underlying data in developing the estimate. 
C)  Use of outside experts by management (for example, how they were used and their expertise). 
D)  All of the above. 
A)  Controls over the process. 
B)  The reliability of underlying data in developing the estimate. 
C)  Use of outside experts by management (for example, how they were used and their expertise). 
D)  All of the above.

Question 18

Appropriateness of evidence is a measure of which of the following?

Accepted Answer

A)  Quantity of evidence. 
B)  Quality of evidence. 
C)  Sufficiency of evidence. 
D)  Meaning of evidence. 
A)  Quantity of evidence. 
B)  Quality of evidence. 
C)  Sufficiency of evidence. 
D)  Meaning of evidence.

Question 19

The type of audit evidence known as inquiry does not ordinarily provide sufficient audit evidence of the absence of a material misstatement, nor is it alone sufficient to test the operating effectiveness of controls.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Which of the following is not a type of internal documentation?

Relevance and reliability of evidence make up the appropriateness of audit evidence.

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.

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

Which one of the following is the primary reason for documenting audit work?

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

Audit documentation serves as support for the financial statements.

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

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

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.

When the auditor used the audit procedure vouching she is primarily concerned with which of the following assertions?

While inspecting documents, auditors should use original documents rather than copies, because copies are easy for management to falsify.

Audit procedures. Discuss how each of the following procedures could be used in the audit of fixed assets, e.g., various types of equipment used in the business.

Recalculations of the client's computations would not include which of the following types of evidence?

Vouching of transactions deals with which of the following?

Appropriateness deals with the quantity of evidence the auditor collects, whereas sufficiency deals with the quality of evidence the auditor collects.

The processes used by management in developing estimates include which of the following?

Appropriateness of evidence is a measure of which of the following?

The type of audit evidence known as inquiry does not ordinarily provide sufficient audit evidence of the absence of a material misstatement, nor is it alone sufficient to test the operating effectiveness of controls.

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

Auditing: Integral to the Economy

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditors

Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

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

Which of the following is not a type of internal documentation?

Relevance and reliability of evidence make up the appropriateness of audit evidence.

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.

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

Which one of the following is the primary reason for documenting audit work?

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

Audit documentation serves as support for the financial statements.

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

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

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.

When the auditor used the audit procedure vouching she is primarily concerned with which of the following assertions?

While inspecting documents, auditors should use original documents rather than copies, because copies are easy for management to falsify.

Audit procedures. Discuss how each of the following procedures could be used in the audit of fixed assets, e.g., various types of equipment used in the business.

Recalculations of the client's computations would not include which of the following types of evidence?

Vouching of transactions deals with which of the following?

Appropriateness deals with the quantity of evidence the auditor collects, whereas sufficiency deals with the quality of evidence the auditor collects.

The processes used by management in developing estimates include which of the following?

Appropriateness of evidence is a measure of which of the following?

The type of audit evidence known as inquiry does not ordinarily provide sufficient audit evidence of the absence of a material misstatement, nor is it alone sufficient to test the operating effectiveness of controls.

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

Auditing: Integral to the Economy

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditors

Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

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