Question 1

Which of the following factors is most important in determining the appropriateness of audit evidence?

Accepted Answer

A)  The reliability of the evidence in meeting the audit objective. 
B)  The sampling method used by the auditor. 
C)  The quantity of the evidence obtained. 
D)  The objectivity of the auditor gathering the evidence. 
A)  The reliability of the evidence in meeting the audit objective. 
B)  The sampling method used by the auditor. 
C)  The quantity of the evidence obtained. 
D)  The objectivity of the auditor gathering the evidence.

Question 2

Which of the following is not an auditing procedure?

Accepted Answer

A)  Physical examination. 
B)  Disclosure. 
C)  Vouching. 
D)  Confirmation. 
A)  Physical examination. 
B)  Disclosure. 
C)  Vouching. 
D)  Confirmation.

Question 3

The weakest form of audit evidence among the following is:

Accepted Answer

A)  a letter of representation from management. 
B)  confirmation of an inter-company receivable from a related company. 
C)  a letter of representation from the client's solicitors. 
D)  a bank statement. 
A)  a letter of representation from management. 
B)  confirmation of an inter-company receivable from a related company. 
C)  a letter of representation from the client's solicitors. 
D)  a bank statement.

Question 4

Auditors are most likely to use focused audit procedures to examine:

Accepted Answer

A)  routine transactions. 
B)  low-risk assertions. 
C)  only the rights and obligations assertion. 
D)  high-risk assertions. 
A)  routine transactions. 
B)  low-risk assertions. 
C)  only the rights and obligations assertion. 
D)  high-risk assertions.

Question 5

The audit trail includes all of the following except:

Accepted Answer

A)  journals and journal files. 
B)  segregation of duties. 
C)  ledgers and ledger files. 
D)  source documents and transaction files. 
A)  journals and journal files. 
B)  segregation of duties. 
C)  ledgers and ledger files. 
D)  source documents and transaction files.

Question 6

All of the following are substantive tests except:

Accepted Answer

A)  analytical procedures. 
B)  tests of approvals on invoices. 
C)  direct tests of sales transactions. 
D)  confirmation of bank balances at year-end. 
A)  analytical procedures. 
B)  tests of approvals on invoices. 
C)  direct tests of sales transactions. 
D)  confirmation of bank balances at year-end.

Question 7

Which of the following statements concerning evidence is correct?

Accepted Answer

A)  Appropriate evidence supporting management's assertions must be convincing rather than merely persuasive. 
B)  A client's accounting data cannot be considered sufficient audit evidence to support the financial report. 
C)  The cost of obtaining evidence is not an important consideration to an auditor in deciding what evidence should be obtained. 
D)  Effective internal control contributes little to the reliability of the evidence created within the entity. 
A)  Appropriate evidence supporting management's assertions must be convincing rather than merely persuasive. 
B)  A client's accounting data cannot be considered sufficient audit evidence to support the financial report. 
C)  The cost of obtaining evidence is not an important consideration to an auditor in deciding what evidence should be obtained. 
D)  Effective internal control contributes little to the reliability of the evidence created within the entity.

Question 8

Which of the following audit objectives relates primarily to the financial report assertion, rights and obligations?

Accepted Answer

A)  Inventories are properly classified in the statement of financial position as current assets. 
B)  Inventories exclude items billed to customers or owned by others. 
C)  Slow-moving, excess, defective and obsolete items included in inventories are properly identified. 
D)  Inventory quantities include all products, materials and supplies owned by the company. 
A)  Inventories are properly classified in the statement of financial position as current assets. 
B)  Inventories exclude items billed to customers or owned by others. 
C)  Slow-moving, excess, defective and obsolete items included in inventories are properly identified. 
D)  Inventory quantities include all products, materials and supplies owned by the company.

Question 9

Which of the following best describes the concept of audit risk?

Accepted Answer

A)  The risk of the auditor being sued because of association with an audit client. 
B)  The risk that the auditor will provide an unmodified opinion on a materially misstated financial report. 
C)  The overall risk that a material misstatement exists in the financial report. 
D)  The risk that auditors use audit procedures that are inappropriate. 
A)  The risk of the auditor being sued because of association with an audit client. 
B)  The risk that the auditor will provide an unmodified opinion on a materially misstated financial report. 
C)  The overall risk that a material misstatement exists in the financial report. 
D)  The risk that auditors use audit procedures that are inappropriate.

Question 10

Which of the following is not a primary purpose of audit working papers?

Accepted Answer

A)  To assist in preparation of the auditor's report. 
B)  To support the financial report. 
C)  Report to provide evidence of the audit work performed. 
D)  To co-ordinate the audit. 
A)  To assist in preparation of the auditor's report. 
B)  To support the financial report. 
C)  Report to provide evidence of the audit work performed. 
D)  To co-ordinate the audit.

Question 11

Audit documents record the results of the auditor's evidence-gathering procedures. When preparing audit documents, the auditor should remember that:

Accepted Answer

A)  audit documents should be kept on the client's premises so that the client can have access to them for reference purposes. 
B)  audit documents should be the primary support for the financial report being examined. 
C)  audit documents should be considered as a substitute for the client's accounting records. 
D)  audit documents should be designed to meet the circumstances and the auditor's needs on each engagement. 
A)  audit documents should be kept on the client's premises so that the client can have access to them for reference purposes. 
B)  audit documents should be the primary support for the financial report being examined. 
C)  audit documents should be considered as a substitute for the client's accounting records. 
D)  audit documents should be designed to meet the circumstances and the auditor's needs on each engagement.

Question 12

Which of the following audit objectives relates primarily to the financial report assertion, valuation and allocation?

Accepted Answer

A)  Inventory listings are accurately compiled and the totals are properly included in the inventory accounts. 
B)  Inventory quantities include all products, materials and supplies owned by the company that are in transit. 
C)  Slow-moving, excess, defective and obsolete items included in inventories are properly identified. 
D)  Inventories exclude items billed to customers or owned by others. 
A)  Inventory listings are accurately compiled and the totals are properly included in the inventory accounts. 
B)  Inventory quantities include all products, materials and supplies owned by the company that are in transit. 
C)  Slow-moving, excess, defective and obsolete items included in inventories are properly identified. 
D)  Inventories exclude items billed to customers or owned by others.

Which of the following factors is most important in determining the appropriateness of audit evidence?

Which of the following is not an auditing procedure?

The weakest form of audit evidence among the following is:

Auditors are most likely to use focused audit procedures to examine:

The audit trail includes all of the following except:

All of the following are substantive tests except:

Which of the following statements concerning evidence is correct?

Which of the following audit objectives relates primarily to the financial report assertion, rights and obligations?

Which of the following best describes the concept of audit risk?

Which of the following is not a primary purpose of audit working papers?

Audit documents record the results of the auditor's evidence-gathering procedures. When preparing audit documents, the auditor should remember that:

Which of the following audit objectives relates primarily to the financial report assertion, valuation and allocation?

Assurance and Auditing: An Overview

The Structure of the Profession

Ethics, Independence and Corporate Governance

The Legal Liability of Auditors Part Two: Planning and Risk

Planning, Understanding the Entity and Evaluating Business Risk

Assessing Specific Business Risk

Understanding and Assessing Internal Control Part Three: Tests of Control and Tests of Details

Tests of Controls

Substantive Tests of Transactions and Balances

Audit Sampling Part Four: Completion and Communication

Completion and Review

The Auditors Reporting Obligations Part Five: Other Assurance Services

Internal Auditing

Auditing and Assurance Services in the Public Sector

Other Assurance Services and Advanced Topics

Filters

Exam 5: Overview of Elements of the Financial Report Audit Process

Which of the following factors is most important in determining the appropriateness of audit evidence?

Which of the following is not an auditing procedure?

The weakest form of audit evidence among the following is:

Auditors are most likely to use focused audit procedures to examine:

The audit trail includes all of the following except:

All of the following are substantive tests except:

Which of the following statements concerning evidence is correct?

Which of the following audit objectives relates primarily to the financial report assertion, rights and obligations?

Which of the following best describes the concept of audit risk?

Which of the following is not a primary purpose of audit working papers?

Audit documents record the results of the auditor's evidence-gathering procedures. When preparing audit documents, the auditor should remember that:

Which of the following audit objectives relates primarily to the financial report assertion, valuation and allocation?

Assurance and Auditing: An Overview

The Structure of the Profession

Ethics, Independence and Corporate Governance

The Legal Liability of Auditors Part Two: Planning and Risk

Planning, Understanding the Entity and Evaluating Business Risk

Assessing Specific Business Risk

Understanding and Assessing Internal Control Part Three: Tests of Control and Tests of Details

Tests of Controls

Substantive Tests of Transactions and Balances

Audit Sampling Part Four: Completion and Communication

Completion and Review

The Auditors Reporting Obligations Part Five: Other Assurance Services

Internal Auditing

Auditing and Assurance Services in the Public Sector

Other Assurance Services and Advanced Topics

Filters