Question 1

Lead schedules are often created by auditors to combine similar accounts,such as all inventory accounts for further testing and documentation.

Accepted Answer

A) True 
 B)False

Question 2

Conclusions are typically documented by auditors in which type of work paper?

Accepted Answer

A) audit planning memo 
B) audit program 
C) audit memoranda 
D) representation letter 
A) audit planning memo 
B) audit program 
C) audit memoranda 
D) representation letter

Question 3

The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance.

Accepted Answer

A) True 
 B)False

Question 4

Which one of the following is the primary reason for documenting audit work?

Accepted Answer

A) to prevent litigation by other parties that question the audit performance. 
B) to provide a stand-alone medium that gives audit conclusions and supports the opinion. 
C) to give the client a full reporting of all work performed on their behalf. 
D) to supply a point of reference for all auditors performing the work subsequently. 
A) to prevent litigation by other parties that question the audit performance. 
B) to provide a stand-alone medium that gives audit conclusions and supports the opinion. 
C) to give the client a full reporting of all work performed on their behalf. 
D) to supply a point of reference for all auditors performing the work subsequently.

Question 5

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 6

The primary importance of the audit program is its guidance of the overall conduct of the audit.

Accepted Answer

A) True 
 B)False

Question 7

Testimonial evidence concerns review of publicly available information about the client.

Accepted Answer

A) True 
 B)False

Question 8

Reprocessing of transactions helps establish that all valid items have been recorded.Reprocessing tests which of the following assertions?

Accepted Answer

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

Question 9

Empire Business Machines,Inc.(EBM)is audited by Flintstone and Sigmond Co.Empire utilizes the FIFO cost flow assumption at the lower of cost or market for its inventory and has ten locations throughout Wyoming,Utah and Idaho.The audit program of Flintstone and Sigmond requires that the following procedures be performed by the senior auditor:   Procedure B-1 and B-2 of Flintstone and Sigmond primarily relates to which management's assertion?

Accepted Answer

A) existence 
B) valuation 
C) rights and obligations 
D) presentation and disclosure 
A) existence 
B) valuation 
C) rights and obligations 
D) presentation and disclosure

Question 10

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 11

Auditors should mail third party confirmations through the client's mailroom.

Accepted Answer

A) True 
 B)False

Question 12

Audit planning workpapers are prepared to support the foundation of the audit and are prepared for the client to assist in their understanding of the specific audit procedures that will be performed.

Accepted Answer

A) True 
 B)False

Question 13

Which one of the following original documents would most likely be found in the audit working papers?

Accepted Answer

A) Vendor invoices 
B) Check registers 
C) Returned confirmation requests 
D) Payroll time cards 
A) Vendor invoices 
B) Check registers 
C) Returned confirmation requests 
D) Payroll time cards

Question 14

Sufficient appropriate evidential matter
Discuss the source of the phrase "sufficient appropriate evidential matter is to be obtained..."
What is the importance of obtaining sufficient appropriate evidential matter? Contrast sufficiency to competency as it relates to such audit evidence.

Accepted Answer

The third standard of field work of the

Question 15

How would an auditor most likely test the mechanical accuracy of a 6,000 page inventory report?

Accepted Answer

A) Examine a random sample of inventory documents. 
B) Use generalized audit software to foot and recalculate. 
C) Send confirmations to vendors. 
D) Inquire of the inventory manager as to the accuracy. 
A) Examine a random sample of inventory documents. 
B) Use generalized audit software to foot and recalculate. 
C) Send confirmations to vendors. 
D) Inquire of the inventory manager as to the accuracy.

Question 16

Dual purpose audit tests are useful as which of the following types of tests?

Accepted Answer

A) tests of controls 
B) tests of account balances. 
C) tests of controls or tests of account balances 
D) tests of controls and tests of account balances. 
A) tests of controls 
B) tests of account balances. 
C) tests of controls or tests of account balances 
D) tests of controls and tests of account balances.

Question 17

Presentation and disclosure assertions state that all transactions and balances are properly presented,and the company has disclosed every financial transaction and arrangement it entered into during the year in the footnotes.

Accepted Answer

A) True 
 B)False

Question 18

Dual purpose tests examine both controls and the reasonableness of dollar amounts.A good example is testing a sample of purchase transactions that occurred throughout the year.

Accepted Answer

A) True 
 B)False

Question 19

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

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 20

Analytical procedures are a type of substantive evidence.

Accepted Answer

A) True 
 B)False

Lead schedules are often created by auditors to combine similar accounts,such as all inventory accounts for further testing and documentation.

Conclusions are typically documented by auditors in which type of work paper?

The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance.

Which one of the following is the primary reason for documenting audit work?

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

The primary importance of the audit program is its guidance of the overall conduct of the audit.

Testimonial evidence concerns review of publicly available information about the client.

Reprocessing of transactions helps establish that all valid items have been recorded.Reprocessing tests which of the following assertions?

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

Auditors should mail third party confirmations through the client's mailroom.

Audit planning workpapers are prepared to support the foundation of the audit and are prepared for the client to assist in their understanding of the specific audit procedures that will be performed.

Which one of the following original documents would most likely be found in the audit working papers?

Sufficient appropriate evidential matter Discuss the source of the phrase "sufficient appropriate evidential matter is to be obtained..." What is the importance of obtaining sufficient appropriate evidential matter? Contrast sufficiency to competency as it relates to such audit evidence.

How would an auditor most likely test the mechanical accuracy of a 6,000 page inventory report?

Dual purpose audit tests are useful as which of the following types of tests?

Presentation and disclosure assertions state that all transactions and balances are properly presented,and the company has disclosed every financial transaction and arrangement it entered into during the year in the footnotes.

Dual purpose tests examine both controls and the reasonableness of dollar amounts.A good example is testing a sample of purchase transactions that occurred throughout the year.

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

Analytical procedures are a type of substantive evidence.

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

Lead schedules are often created by auditors to combine similar accounts,such as all inventory accounts for further testing and documentation.

Conclusions are typically documented by auditors in which type of work paper?

The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance.

Which one of the following is the primary reason for documenting audit work?

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

The primary importance of the audit program is its guidance of the overall conduct of the audit.

Testimonial evidence concerns review of publicly available information about the client.

Reprocessing of transactions helps establish that all valid items have been recorded.Reprocessing tests which of the following assertions?

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

Auditors should mail third party confirmations through the client's mailroom.

Audit planning workpapers are prepared to support the foundation of the audit and are prepared for the client to assist in their understanding of the specific audit procedures that will be performed.

Which one of the following original documents would most likely be found in the audit working papers?

Sufficient appropriate evidential matter Discuss the source of the phrase "sufficient appropriate evidential matter is to be obtained..." What is the importance of obtaining sufficient appropriate evidential matter? Contrast sufficiency to competency as it relates to such audit evidence.

How would an auditor most likely test the mechanical accuracy of a 6,000 page inventory report?

Dual purpose audit tests are useful as which of the following types of tests?

Presentation and disclosure assertions state that all transactions and balances are properly presented,and the company has disclosed every financial transaction and arrangement it entered into during the year in the footnotes.

Dual purpose tests examine both controls and the reasonableness of dollar amounts.A good example is testing a sample of purchase transactions that occurred throughout the year.

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

Analytical procedures are a type of substantive evidence.

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