Exam 5: Audit Evidence

Evidence can be obtained from others or provided by the auditor who has good knowledge of each industry but is not an expert.Which of the following types of evidence is considered to be most reliable?

Which of the following types of evidence is most appropriate in the audit of fixed assets?

An important benefit of industry comparisons is as

Evidence is generally considered appropriate when

An aspect of analytical procedures is referred to as "attention-directing" when it highlights

For income statement accounts,evidence is more persuasive if there is a sample from

The working papers are

For some audit objectives and in some circumstances,analytical procedures may be the most effective procedure to apply.The objectives that most likely would benefit from the use of analytical review with respect to the allowance for uncollectible accounts would be

Which of the following types of evidence would be considered most reliable in the audit of accounts payable?

Which is the essence of professional skepticism?

Each working paper should include enough information to fulfill the objectives for which it was designed.For example,if a working paper is designed to list the detail and show the verification of support of a balance sheet account such as prepaid insurance,it is essential that the detail on the working paper

The auditor will obtain a copy of the client's articles of incorporation (if applicable)and retain a copy in the permanent file.Important information in the articles of incorporation includes

The Bank of New Haven relies heavily on computers to calculate the settlements of amounts due to other banks.Given that the process is highly automated,the auditor would not be able to obtain sufficient evidence with substantive procedures.The auditors of the Bank of New Haven should

"The detailed instructions for the collection of a particular type of audit evidence" is the definition of a(n)

A major benefit of computerized analytical procedures is the

An audit program is

When an auditor calculates the gross margin as a percent of sales and compares it with previous periods,this type of evidence is called

Following are examples of evidence that could be collected during an audit of financial statements. 1.Duplicate copies of sales invoices 2.Inspection of new $100 000 cutting machine 3.Bank confirmation 4.Remittance advices 5.Vendors' invoices 6.Standard letter from lawyer to auditor 7.Auditor inventory count sheets 8.Shipping documents 9.Payroll cheques 10.Long-term debt agreements review notes 11.Auditor interest expense calculation worksheet 12.Observation by auditor of computer error message (invalid supplier number) 13.Gross margin calculation 14.Interview notes from interview with credit manager Required: Classify each type of evidence as to its reliability (1 - high,2 - moderate,3 - low).Justify your classification.

An abnormal fluctuation in gross profit that might suggest the need for extended audit procedures for sales and inventories would most likely be identified in the planning phase of the audit by the use of

A common comparison occurs when the auditor calculates the expected balance and compares it with the actual balance.The auditor's expected account balance may be determined by