Question 1

The performance of analytical procedures is often used by an auditor as a procedure to gather certain types of audit evidence.

Accepted Answer

A) True 
 B)False

Question 2

Vouching of transactions deals with which of the following?

Accepted Answer

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

Question 3

Vouching is a process that helps establish that recorded transactions are valid.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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 6

The client's original signed purchase orders and invoices are a more persuasive type of evidence than evidence directly observed by the auditor.

Accepted Answer

A) True 
 B)False

Question 7

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 8

A client's original signed purchase order is higher quality evidence than a confirmation returned from the client's bank.

Accepted Answer

A) True 
 B)False

Question 9

Recalculations of the client's computations would not include which of the following types of evidence?

Accepted Answer

A) cutoff. 
B) footing. 
C) extension. 
D) cross-footing. 
A) cutoff. 
B) footing. 
C) extension. 
D) cross-footing.

Question 10

The primary evidence in support of an auditor's conclusions is the auditor's documentation.

Accepted Answer

A) True 
 B)False

Question 11

Empire Business Machines,Inc.(EBM)is audited by Flintstone and Sigmond Co.Empire utilizes periodic inventory and has ten locations throughout Wyoming,Utah and Idaho.The audit program of Flintstone and Sigmond requires that the following procedure be performed by the senior auditor,manager and four other auditors:   Procedure A-1 of Flintstone and Sigmond primarily relates to which management's assertion?

Accepted Answer

A) existence 
B) valuation 
C) observation 
D) rights 
A) existence 
B) valuation 
C) observation 
D) rights

Question 12

Management's assertions in the financial statements are of relevance to the audit process because:

Accepted Answer

A) they are the procedures that will be performed by the audit team. 
B) they are utilized by auditors in developing proper tests and procedures. 
C) they are direct evidence that management has prepared financial statements in accordance with generally accepted audit standards. 
D) they relate more to the audit while the financial statements belong to the auditor. 
A) they are the procedures that will be performed by the audit team. 
B) they are utilized by auditors in developing proper tests and procedures. 
C) they are direct evidence that management has prepared financial statements in accordance with generally accepted audit standards. 
D) they relate more to the audit while the financial statements belong to the auditor.

Question 13

The auditor multiplies the quantity of inventory on the inventory ledger by the cost of the inventory to arrive at total inventory balance per product number.This is an example of recomputation by footing.

Accepted Answer

A) True 
 B)False

Question 14

Audit evidence is also referred to as an audit opinion.

Accepted Answer

A) True 
 B)False

Question 15

Reliable evidence usually exists more for transactions than for items making up an ending balance.

Accepted Answer

A) True 
 B)False

Question 16

Which one of the following would be the least persuasive 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) General ledger information. 
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) General ledger information.

Question 17

Underlying accounting records consists 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 18

The audit firm of Lake and South,LLP is wrapping up its audit of Brycestone,Inc.The evidence has been relatively easy to obtain except in one case.Which of the following would represent a balance or transaction that would be most difficult for Lake and South to obtain evidence?

Accepted Answer

A) prepaid expenses 
B) cash 
C) accrued wages and salaries 
D) accrued warranties 
A) prepaid expenses 
B) cash 
C) accrued wages and salaries 
D) accrued warranties

Question 19

Audit standards of proper documentation
Discuss the audit standards that must be applied to the auditor's documentation.Give five examples the types of documentation will be found in the audit work papers.

Accepted Answer

Auditing standards require adequate docu

Question 20

Taft company only holds cash in the local currency of the country in which it operates.Which one of the following management assertions would require the least amount of audit procedures for the cash account of Taft?

Accepted Answer

A) existence 
B) valuation 
C) completeness 
D) presentation 
A) existence 
B) valuation 
C) completeness 
D) presentation

The performance of analytical procedures is often used by an auditor as a procedure to gather certain types of audit evidence.

Vouching of transactions deals with which of the following?

Vouching is a process that helps establish that recorded transactions are valid.

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.

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

The client's original signed purchase orders and invoices are a more persuasive type of evidence than evidence directly observed by the auditor.

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.

A client's original signed purchase order is higher quality evidence than a confirmation returned from the client's bank.

Recalculations of the client's computations would not include which of the following types of evidence?

The primary evidence in support of an auditor's conclusions is the auditor's documentation.

Management's assertions in the financial statements are of relevance to the audit process because:

The auditor multiplies the quantity of inventory on the inventory ledger by the cost of the inventory to arrive at total inventory balance per product number.This is an example of recomputation by footing.

Audit evidence is also referred to as an audit opinion.

Reliable evidence usually exists more for transactions than for items making up an ending balance.

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

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

The audit firm of Lake and South,LLP is wrapping up its audit of Brycestone,Inc.The evidence has been relatively easy to obtain except in one case.Which of the following would represent a balance or transaction that would be most difficult for Lake and South to obtain evidence?

Audit standards of proper documentation Discuss the audit standards that must be applied to the auditor's documentation.Give five examples the types of documentation will be found in the audit work papers.

Taft company only holds cash in the local currency of the country in which it operates.Which one of the following management assertions would require the least amount of audit procedures for the cash account of Taft?

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

The performance of analytical procedures is often used by an auditor as a procedure to gather certain types of audit evidence.

Vouching of transactions deals with which of the following?

Vouching is a process that helps establish that recorded transactions are valid.

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.

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

The client's original signed purchase orders and invoices are a more persuasive type of evidence than evidence directly observed by the auditor.

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.

A client's original signed purchase order is higher quality evidence than a confirmation returned from the client's bank.

Recalculations of the client's computations would not include which of the following types of evidence?

The primary evidence in support of an auditor's conclusions is the auditor's documentation.

Management's assertions in the financial statements are of relevance to the audit process because:

The auditor multiplies the quantity of inventory on the inventory ledger by the cost of the inventory to arrive at total inventory balance per product number.This is an example of recomputation by footing.

Audit evidence is also referred to as an audit opinion.

Reliable evidence usually exists more for transactions than for items making up an ending balance.

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

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

The audit firm of Lake and South,LLP is wrapping up its audit of Brycestone,Inc.The evidence has been relatively easy to obtain except in one case.Which of the following would represent a balance or transaction that would be most difficult for Lake and South to obtain evidence?

Audit standards of proper documentation Discuss the audit standards that must be applied to the auditor's documentation.Give five examples the types of documentation will be found in the audit work papers.

Taft company only holds cash in the local currency of the country in which it operates.Which one of the following management assertions would require the least amount of audit procedures for the cash account of Taft?

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