Question 1

In considering the effectiveness of evidence gathering procedures, it was found that most companies have adjustments.Research also shows that:

Accepted Answer

A) Both receivables and payables are usually overstated. 
B) Receivables are usually overstated and payables are usually understated. 
C) Receivables are usually understated and payables are usually overstated. 
D) Both receivables and payables are usually understated. 
A) Both receivables and payables are usually overstated. 
B) Receivables are usually overstated and payables are usually understated. 
C) Receivables are usually understated and payables are usually overstated. 
D) Both receivables and payables are usually understated. B

Question 2

Permanent audit files contain such documents as the engagement letter, client organization chart, and internal control system flowcharts.

Accepted Answer

A) True 
 B)False  False

Question 3

To provide efficient, reliable evidence, confirmations should be:

Accepted Answer

A) Created by the client and sent to third parties to be returned to the client. 
B) Created by the auditor and sent to third parties to be returned to the client. 
C) Created by the auditor and sent to third parties to be returned to the auditor. 
D) Created by the client and sent to third parties to be returned to the auditor. 
A) Created by the client and sent to third parties to be returned to the client. 
B) Created by the auditor and sent to third parties to be returned to the client. 
C) Created by the auditor and sent to third parties to be returned to the auditor. 
D) Created by the client and sent to third parties to be returned to the auditor. D

Question 4

A first time audit requires more work than a continuing client.Identify some of the issues involved in the first audit of a company that do not occur in an ongoing engagement.

Accepted Answer

If an organization has been operating fo

Question 5

Destroying working papers may prevent the auditor from proving due care if they are sued for negligence.

Accepted Answer

A) True 
 B)False

Question 6

For good form, each audit evidence paper should be indexed using a standard system of letters and numbers.The main purpose of this is to allow:

Accepted Answer

A) Other papers to be easily cross referenced so that connections among accounts can be followed. 
B) A check of the completeness of working papers. 
C) Working papers to be easily refiled if they are taken out of the file or when the paper is first created. 
D) Auditors to prove that they have performed sufficient work to support their audit opinion. 
A) Other papers to be easily cross referenced so that connections among accounts can be followed. 
B) A check of the completeness of working papers. 
C) Working papers to be easily refiled if they are taken out of the file or when the paper is first created. 
D) Auditors to prove that they have performed sufficient work to support their audit opinion.

Question 7

The audit evidence gathering technique known as computation or recalculation refers to:

Accepted Answer

A) Sending letters to independent third parties. 
B) Counting inventory. 
C) Recalculating depreciation. 
D) Checking prices as per the price list. 
A) Sending letters to independent third parties. 
B) Counting inventory. 
C) Recalculating depreciation. 
D) Checking prices as per the price list.

Question 8

The audit technique of enquiry has advantages and disadvantages.Discuss some of them.

Accepted Answer

The two types of audit programs are the

Question 9

Reading the terms of lease agreement for lessee is an example of a analysis.

Accepted Answer

A) True 
 B)False

Question 10

One example of a formal authoritative document is a:

Accepted Answer

A) Purchase order. 
B) Bank statement. 
C) Vendor invoice. 
D) Loan application. 
A) Purchase order. 
B) Bank statement. 
C) Vendor invoice. 
D) Loan application.

Question 11

An auditor should re-perform calculations on a random basis to check for accuracy.Usually, if one component has been calculated properly, the auditor can rely that the other components have also been computed properly.

Accepted Answer

A) True 
 B)False

Question 12

A copy of an auditee's long term lease for a building would likely be kept:

Accepted Answer

A) In the planning file. 
B) In the permanent file. 
C) In the administration file. 
D) In the audit evidence file. 
A) In the planning file. 
B) In the permanent file. 
C) In the administration file. 
D) In the audit evidence file.

Question 13

For new clients, the auditor can obtain knowledge about the client's business and its industry from the permanent file.

Accepted Answer

A) True 
 B)False

Question 14

Define and discuss the evidence gathering technique of inspection.

Accepted Answer

The two types of audit programs are the

Question 15

The strongest form of audit evidence:

Accepted Answer

A) Auditor's direct personal knowledge. 
B) Evidence gathered directly from independent third parties. 
C) Evidence produced by independent third parties. 
D) Comprehensive analysis performed by the auditor. 
A) Auditor's direct personal knowledge. 
B) Evidence gathered directly from independent third parties. 
C) Evidence produced by independent third parties. 
D) Comprehensive analysis performed by the auditor.

Question 16

Evidence which does not relate to one of the management assertions can still be relevant to the auditor.

Accepted Answer

A) True 
 B)False

Question 17

Working papers should be clear, concise, and complete.They communicate:

Accepted Answer

A) The degree of planning in the audit. 
B) The amount of work performed by the auditor. 
C) The amount of time spent by the auditor. 
D) The quality of the audit. 
A) The degree of planning in the audit. 
B) The amount of work performed by the auditor. 
C) The amount of time spent by the auditor. 
D) The quality of the audit.

Question 18

Analytical procedures are one type of evidence gathering procedure.According to auditing standards, there are five general forms of analytical procedures.Auditing standards also provide examples of five sources of information for analytical procedures.
Required:
Describe three of the five general forms of analytical procedures.For each form, describe a typical source of the information for the form.For each source, include any questions or concerns an auditor would have about the reliability or relevancy of the source.

Accepted Answer

A) The five general forms of analytical

Question 19

Oral evidence from enquiry is considered to be very important.

Accepted Answer

A) True 
 B)False

Question 20

A first audit requires more work than a repeat engagement.

Accepted Answer

A) True 
 B)False

In considering the effectiveness of evidence gathering procedures, it was found that most companies have adjustments.Research also shows that:

Permanent audit files contain such documents as the engagement letter, client organization chart, and internal control system flowcharts.

To provide efficient, reliable evidence, confirmations should be:

A first time audit requires more work than a continuing client.Identify some of the issues involved in the first audit of a company that do not occur in an ongoing engagement.

Destroying working papers may prevent the auditor from proving due care if they are sued for negligence.

For good form, each audit evidence paper should be indexed using a standard system of letters and numbers.The main purpose of this is to allow:

The audit evidence gathering technique known as computation or recalculation refers to:

The audit technique of enquiry has advantages and disadvantages.Discuss some of them.

Reading the terms of lease agreement for lessee is an example of a analysis.

One example of a formal authoritative document is a:

An auditor should re-perform calculations on a random basis to check for accuracy.Usually, if one component has been calculated properly, the auditor can rely that the other components have also been computed properly.

A copy of an auditee's long term lease for a building would likely be kept:

For new clients, the auditor can obtain knowledge about the client's business and its industry from the permanent file.

Define and discuss the evidence gathering technique of inspection.

The strongest form of audit evidence:

Evidence which does not relate to one of the management assertions can still be relevant to the auditor.

Working papers should be clear, concise, and complete.They communicate:

Oral evidence from enquiry is considered to be very important.

A first audit requires more work than a repeat engagement.

Introduction to Auditing

Audit, Assurance, and Quality Control Standards

Reports on Audited Financial Statements and Audited Internal Controlt

Professional Ethics and Auditor Responsibilities

Legal Liability

Preliminary Audit Planning: Understanding the Auditee

Assessing Risks and Internal Control

Control Assessment and Testing

Audit Sampling

Revenues, Receivables, and Receipts Process

Purchases, Payables, and Payments Processtrue

Production and Payroll Process

Finance and Investment Process

Completing the Audit

Other Public Accounting Services and Reports

Fraud Awareness Auditing

Filters

Exam 8: Audit Evidence and Assurance

In considering the effectiveness of evidence gathering procedures, it was found that most companies have adjustments.Research also shows that:

Permanent audit files contain such documents as the engagement letter, client organization chart, and internal control system flowcharts.

To provide efficient, reliable evidence, confirmations should be:

A first time audit requires more work than a continuing client.Identify some of the issues involved in the first audit of a company that do not occur in an ongoing engagement.

Destroying working papers may prevent the auditor from proving due care if they are sued for negligence.

For good form, each audit evidence paper should be indexed using a standard system of letters and numbers.The main purpose of this is to allow:

The audit evidence gathering technique known as computation or recalculation refers to:

The audit technique of enquiry has advantages and disadvantages.Discuss some of them.

Reading the terms of lease agreement for lessee is an example of a analysis.

One example of a formal authoritative document is a:

An auditor should re-perform calculations on a random basis to check for accuracy.Usually, if one component has been calculated properly, the auditor can rely that the other components have also been computed properly.

A copy of an auditee's long term lease for a building would likely be kept:

For new clients, the auditor can obtain knowledge about the client's business and its industry from the permanent file.

Define and discuss the evidence gathering technique of inspection.

The strongest form of audit evidence:

Evidence which does not relate to one of the management assertions can still be relevant to the auditor.

Working papers should be clear, concise, and complete.They communicate:

Oral evidence from enquiry is considered to be very important.

A first audit requires more work than a repeat engagement.

Introduction to Auditing

Audit, Assurance, and Quality Control Standards

Reports on Audited Financial Statements and Audited Internal Controlt

Professional Ethics and Auditor Responsibilities

Legal Liability

Preliminary Audit Planning: Understanding the Auditee

Assessing Risks and Internal Control

Control Assessment and Testing

Audit Sampling

Revenues, Receivables, and Receipts Process

Purchases, Payables, and Payments Processtrue

Production and Payroll Process

Finance and Investment Process

Completing the Audit

Other Public Accounting Services and Reports

Fraud Awareness Auditing

Filters