Question 1

Audit findings represent a summary of incorrect transactions detected during the audit.

Accepted Answer

A) True 
 B)False

Question 2

Proper audit documentation.
Audit documentation serves as the primary support of an audit. Give at least six examples of the components of proper working paper documentation.

Accepted Answer

Audit documentation serves as the primar

Question 3

Directional testing involves testing transactions or balances primarily for which type of error?

Accepted Answer

A)  Overstatement. 
B)  Understatement. 
C)  Either overstatement or understatement. 
D)  Either overstatement nor understatement. 
A)  Overstatement. 
B)  Understatement. 
C)  Either overstatement or understatement. 
D)  Either overstatement nor understatement.

Question 4

An audit program provides an effective means for which of the following?

Accepted Answer

A)  Reviewing the completeness and persuasiveness of procedures performed. 
B)  Recording the audit work performed and those responsible for performing the work. 
C)  Organizing and distributing the work. 
D)  All the above. 
A)  Reviewing the completeness and persuasiveness of procedures performed. 
B)  Recording the audit work performed and those responsible for performing the work. 
C)  Organizing and distributing the work. 
D)  All the above.

Question 5

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 6

An audit program is created to specify which of the following?

Accepted Answer

A)  The type of audit opinion to be rendered based upon procedures performed. 
B)  The audit procedures that will be performed every year for the client. 
C)  How an auditor should think while performing audit procedures. 
D)  Audit objectives and procedures to be followed during the audit process. 
A)  The type of audit opinion to be rendered based upon procedures performed. 
B)  The audit procedures that will be performed every year for the client. 
C)  How an auditor should think while performing audit procedures. 
D)  Audit objectives and procedures to be followed during the audit process.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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 9

Liabilities and expenses are most often tested for overstatements.

Accepted Answer

A) True 
 B)False

Question 10

The process of vouching helps establish which of the following regarding recorded transactions?

Accepted Answer

A)  Transactions have been recorded. 
B)  Transactions are complete. 
C)  Transactions are valid. 
D)  Transactions are presented properly. 
A)  Transactions have been recorded. 
B)  Transactions are complete. 
C)  Transactions are valid. 
D)  Transactions are presented properly.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Audit planning workpapers are prepared to support the foundation of the audit and are prepared for the client to assist in their understanding of the specific audit procedures that will be performed.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

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 16

Directional testing.
Explain the meaning of "directional testing" and identify the reasons why directional testing leads to audit efficiency. Give examples of directional testing for the existence and completeness assertions.

Accepted Answer

Directional testing involves testing tra

Question 17

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 18

The auditor normally considers both underlying accounting data and corroborating information in the audit process. Underlying accounting data does not include which of the following items?

Accepted Answer

A)  Evidence of controls. 
B)  Minutes of meetings. 
C)  Checks, invoices, and contracts. 
D)  General and subsidiary ledger. 
A)  Evidence of controls. 
B)  Minutes of meetings. 
C)  Checks, invoices, and contracts. 
D)  General and subsidiary ledger.

Question 19

Audit documentation should include the initials or electronic signature in order to identify the audit personnel responsible for the work and the managers and partners reviewing the work.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Audit findings represent a summary of incorrect transactions detected during the audit.

Proper audit documentation. Audit documentation serves as the primary support of an audit. Give at least six examples of the components of proper working paper documentation.

Directional testing involves testing transactions or balances primarily for which type of error?

An audit program provides an effective means for which of the following?

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

An audit program is created to specify which of the following?

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

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

Liabilities and expenses are most often tested for overstatements.

The process of vouching helps establish which of the following regarding recorded transactions?

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

Audit planning workpapers are prepared to support the foundation of the audit and are prepared for the client to assist in their understanding of the specific audit procedures that will be performed.

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

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?

Directional testing. Explain the meaning of "directional testing" and identify the reasons why directional testing leads to audit efficiency. Give examples of directional testing for the existence and completeness assertions.

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

The auditor normally considers both underlying accounting data and corroborating information in the audit process. Underlying accounting data does not include which of the following items?

Audit documentation should include the initials or electronic signature in order to identify the audit personnel responsible for the work and the managers and partners reviewing the work.

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

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

Exam 6: A Framework for Audit Evidence

Audit findings represent a summary of incorrect transactions detected during the audit.

Proper audit documentation. Audit documentation serves as the primary support of an audit. Give at least six examples of the components of proper working paper documentation.

Directional testing involves testing transactions or balances primarily for which type of error?

An audit program provides an effective means for which of the following?

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

An audit program is created to specify which of the following?

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

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

Liabilities and expenses are most often tested for overstatements.

The process of vouching helps establish which of the following regarding recorded transactions?

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

Audit planning workpapers are prepared to support the foundation of the audit and are prepared for the client to assist in their understanding of the specific audit procedures that will be performed.

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

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?

Directional testing. Explain the meaning of "directional testing" and identify the reasons why directional testing leads to audit efficiency. Give examples of directional testing for the existence and completeness assertions.

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

The auditor normally considers both underlying accounting data and corroborating information in the audit process. Underlying accounting data does not include which of the following items?

Audit documentation should include the initials or electronic signature in order to identify the audit personnel responsible for the work and the managers and partners reviewing the work.

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

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