Exam 3: Audit Evidence, Audit Planning, Analytical Procedures, Materiality and Risk

Using your knowledge of the relationships among acceptable audit risk, inherent risk, control risk, planned detection risk, tolerable misstatement, and planned evidence, state the effect on planned evidence (increase or decrease) of changing each of the following factors, while the other factors remain unchanged. -An increase in planned detection risk.

Free

(Short Answer)

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Question 1

Correct Answer:

Verified

Decrease

Below are 10 documents typically examined during an audit. Classify each document as either internal or external. -Bank statements.

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(Short Answer)

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Question 2

Correct Answer:

Verified

External

Avoiding misunderstandings with the client is important for:

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(Short Answer)

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Question 3

Correct Answer:

Verified

Which of the following statements is not correct concerning audit documentation?

(Multiple Choice)

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Question 4

Which is usually included in an engagement letter?

(Short Answer)

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Question 5

Audit procedures may be performed:

(Short Answer)

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Question 6

One accounting issue that does not require management to use significant judgments is:

(Multiple Choice)

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Question 7

Which of the following would not usually be included in the minutes of the board of directors?

(Multiple Choice)

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Question 8

Which items affect the sufficiency of evidence when choosing a sample?

(Short Answer)

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Question 9

Ordinarily, the auditor should review and abstract copies of contracts during the later stages of an audit.

(True/False)

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Question 10

When inherent risk is high, there will need to be:

(Short Answer)

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Question 11

Net income before taxes is normally the most important base for deciding materiality.

(True/False)

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Question 12

Using your knowledge of the relationships among acceptable audit risk, inherent risk, control risk, planned detection risk, tolerable misstatement, and planned evidence, state the effect on planned evidence (increase or decrease) of changing each of the following factors, while the other factors remain unchanged. -An increase in acceptable audit risk.

(Short Answer)

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Question 13

Discuss the auditor's use of inspection as evidence.

(Essay)

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Question 14

The least effective method of identifying related parties for a public company would be a(n):

(Multiple Choice)

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Question 15

Relevance can be considered only in terms of:

(Multiple Choice)

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Question 16

Using your knowledge of the relationships among acceptable audit risk, inherent risk, control risk, planned detection risk, tolerable misstatement, and planned evidence, state the effect on planned evidence (increase or decrease) of changing each of the following factors, while the other factors remain unchanged. -An increase in tolerable misstatement.

(Short Answer)

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Question 17

Which one of the following statements about the cycle approach to auditing is not correct?

(Multiple Choice)

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Question 18

After the preliminary judgment about materiality has been established, auditors may:

(Multiple Choice)

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Question 19

Calculating the gross margin as a percent of sales and comparing it with previous periods is what type of evidence?

(Multiple Choice)

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Question 20

Showing 1 - 20 of 100

Below are 10 documents typically examined during an audit. Classify each document as either internal or external. -Bank statements.

Avoiding misunderstandings with the client is important for:

Which of the following statements is not correct concerning audit documentation?

Which is usually included in an engagement letter?

Audit procedures may be performed:

One accounting issue that does not require management to use significant judgments is:

Which of the following would not usually be included in the minutes of the board of directors?

Which items affect the sufficiency of evidence when choosing a sample?

Ordinarily, the auditor should review and abstract copies of contracts during the later stages of an audit.

When inherent risk is high, there will need to be:

Net income before taxes is normally the most important base for deciding materiality.

Discuss the auditor's use of inspection as evidence.

The least effective method of identifying related parties for a public company would be a(n):

Relevance can be considered only in terms of:

Which one of the following statements about the cycle approach to auditing is not correct?

After the preliminary judgment about materiality has been established, auditors may:

Calculating the gross margin as a percent of sales and comparing it with previous periods is what type of evidence?

The Demand for Audit, Cpa Profession, Audit Reports and Other Assurance Services

Professional Ethics, Legal Liability, Audit Responsibilities and Objectives

Internal Control, Control Risk, Section 404 Audits, Fraud Auditing, and the Impact of Information Technology on the Audit Process

Overall Audit Strategy, Audit Program, Audit of the Sales and Collection Cycle, Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable, Audit Sampling for Tests of Details of Balances, and Audit of the Acquisition and Payment Cycle

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts, Audit of the Payroll and Personnel Cycle, Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition, Repayment, Audit of Cash and Financial Instruments, and Completing the Audit

Other Assurance Services, Internal and Governmental Financial Auditing and Operations Auditing

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