Exam 9: Audit Evidence

The audit of Simcoe Transports Inc. was completed three months ago, so the PA firm proceeded to the file archive stage in accordance with Canadian Audit Standards. If the audit firm receives additional information related to the audit but the information does not affect the audit conclusions, the information should be

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

An example of vouching would be to trace from

An auditor is conducting the audit of the financial statements of a retail department store. The auditor is aware that he must obtain sufficient appropriate evidence with respect to various audit assertions associated with management assertions and thus with material financial statement amounts. The following is a list of specific audit procedures the auditor plans to perform: 1. Send negative external confirmation requests to a large sample of the store's customers who have balances due on account at year end. 2. Perform test counts of goods on hand during the company's normal physical inventory taking, one month prior to the year end. 3. Examine receiving reports dated prior to the year end that have not been matched to vendor invoices. 4. Review paid invoices and supporting documents for amounts classified as repair and maintenance expense for large or unusual items. 5. Examine audited financial statements of several foreign companies in which the client owns shares, and which are being held as temporary investments. Required: For each of the five audit procedures listed, describe only the PRIMARY management assertion being tested, the PRIMARY audit assertion being tested, and the quality of evidence (high, medium, low) obtained, explaining WHY the evidence is the quality level you specify.

During final review of working papers and financial statements, possible oversights in the audit can be identified by

Renaldo compared shipping reports to sales documents, checking to see that the sales invoice dates matched the shipping dates, and that quantities invoiced matched quantities shipped. On his working paper, he said that he vouched invoices. What else should his working paper include with respect to the audit procedure conducted?

The PA is having a discussion with his client about the outcome of several lawsuits that are presently in progress. The client has requested that the comments during the discussion be removed from the audit file. The client would like the only documentation in the audit file to be the legal letter from the client and brief comments regarding the auditor's judgments with respect to the quality of disclosure in the financial statements. The client is concerned that

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

The new Canadian Auditing Standards require the auditor to complete the audit working papers within how many days of the audit report date?

The auditor's decisions regarding evidence accumulation can be broken into five subdecisions. One decision relates to determining the nature of the audit procedure to be used to collect the evidence; i.e., "which audit procedures to use." Identify and discuss the remaining four audit evidence decisions that the auditor makes.

When the auditor examines the client's documents and records to support recorded transactions or amounts, it is commonly referred to as

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

Although considerable evidence is obtained from the client through inquiry, it usually cannot be regarded as conclusive because

Confirmations from outside organizations such as banks and law firms are

In addition to including on each working paper the name of the client, the period covered, the date of preparation, and an index code, each working paper should clearly include

"The detailed instructions for the entire collection of evidence for an audit area" is the definition of a(n)

When comparing the reliability of external versus internal documents, the external documents are generally considered

In determining the quantity and quality of evidence to gather, the auditor will be satisfied when the evidence is

Audit evidence can come in different forms with different degrees of persuasiveness. Which of the following is the least persuasive type of evidence?

Identify and explain the three determinants of the persuasiveness of evidence.