Question 1

Below are 10 documents typically examined during an audit. Classify each document as either internal or external.
-Minutes of the board of directors' meetings.

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The answer of Below are 10 documents typically examined during...

Question 2

Which of the following qualitative factors may significantly influence whether an item is deemed to be material?

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The answer of Which of the following qualitative factors may...

Question 3

Of the three common types of confirmations used by auditors, the least reliable type is the negative confirmation.

Accepted Answer

A) True 
 B)False

Question 4

Below are 12 audit procedures. Classify each procedure according to the following types of audit evidence:
-Obtain information about the client's internal controls by asking questions of client personnel.

Accepted Answer

A)  physical examination 
B)  observation 
C)  confirmation 
D)  inspection 
E)  analytical procedures
F) inquiry of the client
G) recalculation
H) reperformance

Question 5

When auditors use documents to support recorded transactions, the process is often called:

Accepted Answer

A)  vouching. 
B)  physical examination. 
C)  confirmation. 
D)  inquiry.

Question 6

Discuss the required communications between predecessor and successor auditors as outlined by ISA 300.

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Question 7

Give two examples of relatively reliable documentation and two examples of less reliable documentation. What characteristics distinguish the two?

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Question 8

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

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Question 9

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.
-A decrease in control risk.

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Question 10

Two categories of audit- relevant information found in corporate charters and bylaws (memorandum and articles of association) are authorizations and discussions of matters affecting inherent risk.

Accepted Answer

A) True 
 B)False

Question 11

Below are 10 documents typically examined during an audit. Classify each document as either internal or external.
-Signed lease agreements.

Accepted Answer

The answer of Below are 10 documents typically examined during...

Question 12

Which of the following is not likely to be a related party?

Accepted Answer

A)  The chief executive officer. 
B)  A warehouse employee. 
C)  Affiliated companies. 
D)  A major stockholder of the company.

Question 13

Identify the three common types of confirmations used by auditors. Indicate which type is most reliable and explain your answer. In addition, indicate which type is least reliable and explain your answer.

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The answer of Identify the three common types of confirmations...

Question 14

Given the economic constraints in which auditors collect evidence, the auditor normally gathers evidence that is:

Accepted Answer

A)  persuasive. 
B)  completely convincing. 
C)  conclusive. 
D)  irrefutable.

Question 15

Audit documentation should provide support for:

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The answer of Audit documentation should provide support for: ...

Question 16

Likely misstatements can result from:

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Question 17

Which of the following is most likely to occur at the beginning of an initial audit engagement?

Accepted Answer

A)  Study and evaluate the system of internal administrative control. 
B)  Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management. 
C)  Prepare a rough draft of the financial statements and of the auditor's report. 
D)  Determine the client's reason for an audit.

Question 18

Below are 10 documents typically examined during an audit. Classify each document as either internal or external.
-Vendors' invoices

Accepted Answer

The answer of Below are 10 documents typically examined during...

Question 19

Which of the following is not a correct combination of terms and related type of audit evidence?

Accepted Answer

A)  Vouch - inspection. 
B)  Compare - inspection. 
C)  Trace - analytical procedures. 
D)  Foot - recalculation.

Question 20

Which of the following is an example of vouching?

Accepted Answer

A)  Trace details of employee paychecks to the payroll journal. 
B)  Trace inventory purchases from the acquisitions journal to supporting invoices. 
C)  Trace selected sales invoices to the sales journal. 
D)  All of the above are examples of vouching.

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

Below are 10 documents typically examined during an audit. Classify each document as either internal or external. -Minutes of the board of directors' meetings.

Which of the following qualitative factors may significantly influence whether an item is deemed to be material?

Of the three common types of confirmations used by auditors, the least reliable type is the negative confirmation.

Below are 12 audit procedures. Classify each procedure according to the following types of audit evidence: -Obtain information about the client's internal controls by asking questions of client personnel.

When auditors use documents to support recorded transactions, the process is often called:

Discuss the required communications between predecessor and successor auditors as outlined by ISA 300.

Give two examples of relatively reliable documentation and two examples of less reliable documentation. What characteristics distinguish the two?

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

Two categories of audit- relevant information found in corporate charters and bylaws (memorandum and articles of association) are authorizations and discussions of matters affecting inherent risk.

Below are 10 documents typically examined during an audit. Classify each document as either internal or external. -Signed lease agreements.

Which of the following is not likely to be a related party?

Identify the three common types of confirmations used by auditors. Indicate which type is most reliable and explain your answer. In addition, indicate which type is least reliable and explain your answer.

Given the economic constraints in which auditors collect evidence, the auditor normally gathers evidence that is:

Audit documentation should provide support for:

Likely misstatements can result from:

Which of the following is most likely to occur at the beginning of an initial audit engagement?

Below are 10 documents typically examined during an audit. Classify each document as either internal or external. -Vendors' invoices

Which of the following is not a correct combination of terms and related type of audit evidence?

Which of the following is an example of vouching?