Question 1

Evidence can be directly or indirectly relevant to an assertion.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Audit evidence consists of both information that corroborates management's assertions and information that contradicts such assertions.

Accepted Answer

A) True 
 B)False

Question 4

While inspecting documents, the reliability depends on the nature and source of the documentation.

Accepted Answer

A) True 
 B)False

Question 5

Audit documentation should contain which of the following?

Accepted Answer

A)  A heading that includes the name of the audit client, an explanatory title, and the balance sheet date. 
B)  The initials or electronic signature of the auditor performing the audit test and the date the test was completed. 
C)  The initials or electronic signature of the manager or partner who reviewed the documentation and the date the review was completed. 
D)  All of the above. 
A)  A heading that includes the name of the audit client, an explanatory title, and the balance sheet date. 
B)  The initials or electronic signature of the auditor performing the audit test and the date the test was completed. 
C)  The initials or electronic signature of the manager or partner who reviewed the documentation and the date the review was completed. 
D)  All of the above.

Question 6

Audit procedures.
Businesses often have litigation against them that the auditor has to identify and adequately disclose. List the financial assertions that apply to Contingencies. For each assertion indicate two or three audit procedures that would address that assertion.
Organize you answer as follows:

Accepted Answer

The answer of Audit procedures.
Businesses often have litigation against them...

Question 7

When using confirmations with outside parties, the auditor must assure which of the following about the outside party?

Accepted Answer

A)  The outside party exists. 
B)  The outside party is able to respond objectively and independently. 
C)  The outside party is unbiased in responding. 
D)  All the above. 
A)  The outside party exists. 
B)  The outside party is able to respond objectively and independently. 
C)  The outside party is unbiased in responding. 
D)  All the above.

Question 8

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 9

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 10

In a reasonableness 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 11

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 12

The direction of testing from the source documents to recorded amounts provides evidence regarding the completeness of liabilities and expenses.

Accepted Answer

A) True 
 B)False

Question 13

Performance of audit procedures at an interim date causes the risk of material misstatement occurring between the interim date and the end of the year to do which of the following?

Accepted Answer

A)  Decrease. 
B)  Increase. 
C)  Remain the same. 
D)  Become more difficult to ascertain. 
A)  Decrease. 
B)  Increase. 
C)  Remain the same. 
D)  Become more difficult to ascertain.

Question 14

The written record that forms the basis for the auditor's conclusions is referred to as what?

Accepted Answer

A)  Audit documentation. 
B)  Audit adjustment. 
C)  Accounting records. 
D)  Footing. 
A)  Audit documentation. 
B)  Audit adjustment. 
C)  Accounting records. 
D)  Footing.

Question 15

Ulanda and Mudana, CPAs are performing an audit on McArnee, Inc. Ulanda selects a sample from certain source documents and traces them forward to the accounts payable ledger. The purpose of this test is to determine the possibility of understated liabilities.

Accepted Answer

A) True 
 B)False

Question 16

Confirmation statements from banks are an example of third-party external documents.

Accepted Answer

A) True 
 B)False

Question 17

Which one of the following would be considered the most reliable type of audit evidence?

Accepted Answer

A)  Purchase orders from vendors. 
B)  Customer accounts receivable files. 
C)  Computerized general ledger. 
D)  Confirmations from banks. 
A)  Purchase orders from vendors. 
B)  Customer accounts receivable files. 
C)  Computerized general ledger. 
D)  Confirmations from banks.

Question 18

Underlying accounting records consist of evidence of controls as well as supporting records such as checks, invoices, the general and subsidiary ledger and journal entries.

Accepted Answer

A) True 
 B)False

Question 19

Two determinants of the persuasiveness of evidence include which of the following?

Accepted Answer

A)  Competence and Sufficiency. 
B)  Relevance and Reliability. 
C)  Appropriateness and Sufficiency. 
D)  Independence and Effectiveness. 
A)  Competence and Sufficiency. 
B)  Relevance and Reliability. 
C)  Appropriateness and Sufficiency. 
D)  Independence and Effectiveness.

Question 20

The auditor utilizes the same audit program and the same procedures each year for each client in order to ensure that nothing is missed in the current year audit.

Accepted Answer

A) True 
 B)False

Evidence can be directly or indirectly relevant to an assertion.

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.

Audit evidence consists of both information that corroborates management's assertions and information that contradicts such assertions.

While inspecting documents, the reliability depends on the nature and source of the documentation.

Audit documentation should contain which of the following?

When using confirmations with outside parties, the auditor must assure which of the following about the outside party?

Which one of the following statements is false?

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

In a reasonableness 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?

The direction of testing from the source documents to recorded amounts provides evidence regarding the completeness of liabilities and expenses.

Performance of audit procedures at an interim date causes the risk of material misstatement occurring between the interim date and the end of the year to do which of the following?

The written record that forms the basis for the auditor's conclusions is referred to as what?

Ulanda and Mudana, CPAs are performing an audit on McArnee, Inc. Ulanda selects a sample from certain source documents and traces them forward to the accounts payable ledger. The purpose of this test is to determine the possibility of understated liabilities.

Confirmation statements from banks are an example of third-party external documents.

Which one of the following would be considered the most reliable type of audit evidence?

Underlying accounting records consist of evidence of controls as well as supporting records such as checks, invoices, the general and subsidiary ledger and journal entries.

Two determinants of the persuasiveness of evidence include which of the following?

The auditor utilizes the same audit program and the same procedures each year for each client in order to ensure that nothing is missed in the current year audit.

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

Evidence can be directly or indirectly relevant to an assertion.

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.

Audit evidence consists of both information that corroborates management's assertions and information that contradicts such assertions.

While inspecting documents, the reliability depends on the nature and source of the documentation.

Audit documentation should contain which of the following?

When using confirmations with outside parties, the auditor must assure which of the following about the outside party?

Which one of the following statements is false?

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

In a reasonableness 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?

The direction of testing from the source documents to recorded amounts provides evidence regarding the completeness of liabilities and expenses.

Performance of audit procedures at an interim date causes the risk of material misstatement occurring between the interim date and the end of the year to do which of the following?

The written record that forms the basis for the auditor's conclusions is referred to as what?

Ulanda and Mudana, CPAs are performing an audit on McArnee, Inc. Ulanda selects a sample from certain source documents and traces them forward to the accounts payable ledger. The purpose of this test is to determine the possibility of understated liabilities.

Confirmation statements from banks are an example of third-party external documents.

Which one of the following would be considered the most reliable type of audit evidence?

Underlying accounting records consist of evidence of controls as well as supporting records such as checks, invoices, the general and subsidiary ledger and journal entries.

Two determinants of the persuasiveness of evidence include which of the following?

The auditor utilizes the same audit program and the same procedures each year for each client in order to ensure that nothing is missed in the current year audit.

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