Question 1

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

Accepted Answer

A) evidence from the client's organization. 
B) evidence derived from a well-controlled system. 
C) evidence from independent outside sources. 
D) original documents. 
A) evidence from the client's organization. 
B) evidence derived from a well-controlled system. 
C) evidence from independent outside sources. 
D) original documents. A

Question 2

The quality of electronic evidence depends on the controls built into the information system.

Accepted Answer

A) True 
 B)False  True

Question 3

Which one of the following would be the most persuasive type of evidence?

Accepted Answer

A) check register 
B) bank statement 
C) observation of assets 
D) inquiry with the in-house attorney 
A) check register 
B) bank statement 
C) observation of assets 
D) inquiry with the in-house attorney C

Question 4

Inquiries of client personnel are not an effective means of evidence gathering by an auditor.

Accepted Answer

A) True 
 B)False

Question 5

Vouching recorded transactions involves taking a sample from the journal and tracing the items back to the source documents to ensure the transactions occurred.

Accepted Answer

A) True 
 B)False

Question 6

Recent regulation requires that audit documentation be retained for at least seven years.

Accepted Answer

A) True 
 B)False

Question 7

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 8

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 9

An advantage of directional testing is that it is more efficient by providing evidence on complementary sets of accounts.

Accepted Answer

A) True 
 B)False

Question 10

Audit program
Discuss the purpose of the audit program and its importance to the auditor.

Accepted Answer

An audit program specifies the actual pr

Question 11

For the financial statements to be presented in accordance with generally accepted accounting principles,the information included must:

Accepted Answer

A) embody the appropriate assertions of management. 
B) be consistent,comparable and fully accurate. 
C) have full and adequate disclosure of all transactions. 
D) be prepared by an independent auditor. 
A) embody the appropriate assertions of management. 
B) be consistent,comparable and fully accurate. 
C) have full and adequate disclosure of all transactions. 
D) be prepared by an independent auditor.

Question 12

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

None

Question 13

Reprocessing of transactions involves which of the following?

Accepted Answer

A) testing forward. 
B) testing backward. 
C) test at a point in time. 
D) directional testing either forward or backward. 
A) testing forward. 
B) testing backward. 
C) test at a point in time. 
D) directional testing either forward or backward.

Question 14

Based upon the risk of misstatement,the auditor uses judgment to determine which balances and transactions should be tested in the financial statements.

Accepted Answer

A) True 
 B)False

Question 15

An example of physical examination is the auditor's testing of inventory by counting it to substantiate the existence assertion.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following assertions is the primary assertion that is satisfied by physically observing the client's count of inventory?

Accepted Answer

A) rights. 
B) valuation. 
C) completeness. 
D) existence. 
A) rights. 
B) valuation. 
C) completeness. 
D) existence.

Question 17

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 18

Audit assertions and objectives - accounts receivable
Based on management assertions implicit in the accounts receivable account,explain the audit objectives for the accounts receivable and related balances.

Accepted Answer

The audit objectives for the audit of ac

Question 19

Which of the following provides the primary support of an audit?

Accepted Answer

A) the financial statements. 
B) the audit working papers. 
C) the audit report. 
D) the confirmation documentation. 
A) the financial statements. 
B) the audit working papers. 
C) the audit report. 
D) the confirmation documentation.

Question 20

Which of the following is not an estimate that requires significant auditor judgment and skepticism?

Accepted Answer

A) Obligations for pension plans. 
B) Valuation of goodwill. 
C) Allowance for bad debt. 
D) Common stock and related additional paid-in capital. 
A) Obligations for pension plans. 
B) Valuation of goodwill. 
C) Allowance for bad debt. 
D) Common stock and related additional paid-in capital.

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

The quality of electronic evidence depends on the controls built into the information system.

Which one of the following would be the most persuasive type of evidence?

Inquiries of client personnel are not an effective means of evidence gathering by an auditor.

Vouching recorded transactions involves taking a sample from the journal and tracing the items back to the source documents to ensure the transactions occurred.

Recent regulation requires that audit documentation be retained for at least seven years.

Which one of the following statements is false?

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?

An advantage of directional testing is that it is more efficient by providing evidence on complementary sets of accounts.

Audit program Discuss the purpose of the audit program and its importance to the auditor.

For the financial statements to be presented in accordance with generally accepted accounting principles,the information included must:

Reprocessing of transactions involves which of the following?

Based upon the risk of misstatement,the auditor uses judgment to determine which balances and transactions should be tested in the financial statements.

An example of physical examination is the auditor's testing of inventory by counting it to substantiate the existence assertion.

Which of the following assertions is the primary assertion that is satisfied by physically observing the client's count of inventory?

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.

Audit assertions and objectives - accounts receivable Based on management assertions implicit in the accounts receivable account,explain the audit objectives for the accounts receivable and related balances.

Which of the following provides the primary support of an audit?

Which of the following is not an estimate that requires significant auditor judgment and skepticism?

Auditing: Integral to the Economy

Corporate Governance and Audits

Judgmental and Ethical Decision-Making Frameworks and Associated Professional Standards

Audit Risk,business Risk,and Audit Planning

Internal Control Over Financial Reporting

Performing an Integrated Audit

Tools Used in Gathering Audit Evidence

Auditing for Fraud

Auditing Revenue and Related Accounts

Audit of Acquisition and Payment Cycle and Inventory

Audit of Cash and Other Liquid Assets

Audit of Long-Lived Assets and Related Expense Accounts

Audit of Longer-Term Liabilities, equity, acquisitions, and Related-Entity Transactions, long-Term Liabilities, and Equity

Ensuring Audit Quality in Completing the Audit

Auditors Reports

Professional Liability

Advanced Topics Concerning Complex Audit Judgments

Filters

Exam 7: A Framework for Audit Evidence

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

The quality of electronic evidence depends on the controls built into the information system.

Which one of the following would be the most persuasive type of evidence?

Inquiries of client personnel are not an effective means of evidence gathering by an auditor.

Vouching recorded transactions involves taking a sample from the journal and tracing the items back to the source documents to ensure the transactions occurred.

Recent regulation requires that audit documentation be retained for at least seven years.

Which one of the following statements is false?

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?

An advantage of directional testing is that it is more efficient by providing evidence on complementary sets of accounts.

Audit program Discuss the purpose of the audit program and its importance to the auditor.

For the financial statements to be presented in accordance with generally accepted accounting principles,the information included must:

Reprocessing of transactions involves which of the following?

Based upon the risk of misstatement,the auditor uses judgment to determine which balances and transactions should be tested in the financial statements.

An example of physical examination is the auditor's testing of inventory by counting it to substantiate the existence assertion.

Which of the following assertions is the primary assertion that is satisfied by physically observing the client's count of inventory?

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.

Audit assertions and objectives - accounts receivable Based on management assertions implicit in the accounts receivable account,explain the audit objectives for the accounts receivable and related balances.

Which of the following provides the primary support of an audit?

Which of the following is not an estimate that requires significant auditor judgment and skepticism?

Auditing: Integral to the Economy

Corporate Governance and Audits

Judgmental and Ethical Decision-Making Frameworks and Associated Professional Standards

Audit Risk,business Risk,and Audit Planning

Internal Control Over Financial Reporting

Performing an Integrated Audit

Tools Used in Gathering Audit Evidence

Auditing for Fraud

Auditing Revenue and Related Accounts

Audit of Acquisition and Payment Cycle and Inventory

Audit of Cash and Other Liquid Assets

Audit of Long-Lived Assets and Related Expense Accounts

Audit of Longer-Term Liabilities, equity, acquisitions, and Related-Entity Transactions, long-Term Liabilities, and Equity

Ensuring Audit Quality in Completing the Audit

Auditors Reports

Professional Liability

Advanced Topics Concerning Complex Audit Judgments

Filters