Question 1

Which of the following is a correct statement regarding confirmations?

Accepted Answer

A) Confirmations can be in oral or written form. 
B) Electronic confirmations are not acceptable under generally accepted auditing standards. 
C) Confirmations are generally used in the audit of fixed asset additions. 
D) Auditors consider alternative evidence available when determining if confirmations should be used. 
A) Confirmations can be in oral or written form. 
B) Electronic confirmations are not acceptable under generally accepted auditing standards. 
C) Confirmations are generally used in the audit of fixed asset additions. 
D) Auditors consider alternative evidence available when determining if confirmations should be used. D

Question 2

Which of the following is accurate regarding the comparison of client data?

Accepted Answer

A) Since budgets are only projections,auditors can ignore the differences between budgeted and actual results. 
B) One approach to overcome the limitations of industry averages is to compare the client to one or more benchmark firms in the industry. 
C) It is impractical to relate one account balance to another balance sheet or income statement account. 
D) it is extremely difficult to get industry data for comparative purposes. 
A) Since budgets are only projections,auditors can ignore the differences between budgeted and actual results. 
B) One approach to overcome the limitations of industry averages is to compare the client to one or more benchmark firms in the industry. 
C) It is impractical to relate one account balance to another balance sheet or income statement account. 
D) it is extremely difficult to get industry data for comparative purposes. B

Question 3

Audit documents are the joint property of the auditor and the audit client.

Accepted Answer

A) True 
 B)False  False

Question 4

Discuss three of the following characteristics of relevant evidence.
1. Independence of provider
2. Effectiveness of client's internal controls
3. Auditor's direct knowledge
4. Qualification of individuals providing the information
5. Degree of objectivity
6. Timeliness

Accepted Answer

1. Independence of provider - Evidence o

Question 5

When practical and reasonable,U.S.auditing standards require the confirmation of

Accepted Answer

A) individual transactions between organizations,such as sales transactions. 
B) accounts receivable. 
C) fixed asset additions. 
D) payroll expenses. 
A) individual transactions between organizations,such as sales transactions. 
B) accounts receivable. 
C) fixed asset additions. 
D) payroll expenses.

Question 6

Auditors may decide to replace tests of details with analytical procedures when possible because the

Accepted Answer

A) analytical procedures are more reliable. 
B) analytical procedures are considerably less expensive. 
C) analytical procedures are more persuasive. 
D) tests of details are more difficult to interpret. 
A) analytical procedures are more reliable. 
B) analytical procedures are considerably less expensive. 
C) analytical procedures are more persuasive. 
D) tests of details are more difficult to interpret.

Question 7

The SEC requires the auditors of public companies to retain e-mail correspondence related to the audit.

Accepted Answer

A) True 
 B)False

Question 8

The most widely used profitability ratio is the gross profit percent.

Accepted Answer

A) True 
 B)False

Question 9

________ generally provide the most reliable evidence.

Accepted Answer

A) Confirmations 
B) Recalculations 
C) Reperformances 
D) Observations 
A) Confirmations 
B) Recalculations 
C) Reperformances 
D) Observations

Question 10

The two most important factors when determining the appropriate sample size in an audit are the auditor's expectation of misstatements and the objectivity of the evidence.

Accepted Answer

A) True 
 B)False

Question 11

The two characteristics of the appropriateness of evidence are

Accepted Answer

A) relevance and timeliness. 
B) relevance and accuracy. 
C) relevance and reliability. 
D) reliability and accuracy. 
A) relevance and timeliness. 
B) relevance and accuracy. 
C) relevance and reliability. 
D) reliability and accuracy.

Question 12

Match between columns
                        Premises: this is determined by the amount of evidence obtained
the degree to which evidence can be considered believable or trustworthy
contains all the information that the auditor considers necessary to conduct an adequate audit and to provide support for the audit report
detailed instructions for the collection of a type of audit evidence
use of comparisons and relationships to assess the reasonableness of account balances

Accepted Answer

The Answer of audit procedures and sufficiency of evidence and is...

Question 13

Which of the following statements is True?

Accepted Answer

A) Evidence must be relevant to all of the audit objectives. 
B) If evidence is subjective,it cannot be reliable. 
C) Evidence obtained directly by the auditor may not be reliable if the auditor lacks the qualifications to evaluate the evidence. 
D) The persuasiveness of evidence can be evaluated after considering its sufficiency. 
A) Evidence must be relevant to all of the audit objectives. 
B) If evidence is subjective,it cannot be reliable. 
C) Evidence obtained directly by the auditor may not be reliable if the auditor lacks the qualifications to evaluate the evidence. 
D) The persuasiveness of evidence can be evaluated after considering its sufficiency.

Question 14

A company's long-term solvency

Accepted Answer

A) can be measured by the gross profit percentage. 
B) depends on the success of its operations and on its ability to raise capital for expansion. 
C) can be measured by the days to collect receivables ratio. 
D) depends on its ability to generate cash for the payment of dividends. 
A) can be measured by the gross profit percentage. 
B) depends on the success of its operations and on its ability to raise capital for expansion. 
C) can be measured by the days to collect receivables ratio. 
D) depends on its ability to generate cash for the payment of dividends.

Question 15

The most important benefits of industry comparisons are to aid in understanding the client's business and as an indication of the likelihood of financial failure.

Accepted Answer

A) True 
 B)False

Question 16

When auditors use documentation to support recorded transactions and amounts,the process is usually called

Accepted Answer

A) tracing. 
B) confirmations. 
C) vouching. 
D) reperformance. 
A) tracing. 
B) confirmations. 
C) vouching. 
D) reperformance.

Question 17

When analytical procedures reveal unusual fluctuations in an account balance,the auditor will probably perform fewer tests of details for that account and increase the tests of controls related to the account.

Accepted Answer

A) True 
 B)False

Question 18

Appropriateness of evidence is a measure of the

Accepted Answer

A) quantity of evidence. 
B) quality of evidence. 
C) sufficiency of evidence. 
D) meaning of evidence. 
A) quantity of evidence. 
B) quality of evidence. 
C) sufficiency of evidence. 
D) meaning of evidence.

Question 19

"Physical examination" is the inspection or count by the auditor of items such as

Accepted Answer

A) cash,inventory,and payroll timecards. 
B) cash,inventory,canceled checks,and sales documents. 
C) cash,inventory,canceled checks,and tangible fixed assets. 
D) cash,inventory,securities,notes receivable,and tangible fixed assets. 
A) cash,inventory,and payroll timecards. 
B) cash,inventory,canceled checks,and sales documents. 
C) cash,inventory,canceled checks,and tangible fixed assets. 
D) cash,inventory,securities,notes receivable,and tangible fixed assets.

Question 20

Auditor judgment is the primary determinant in determining the amount of evidence gathered.

Accepted Answer

A) True 
 B)False

Exam 7: Audit Evidence

Which of the following is a correct statement regarding confirmations?

Which of the following is accurate regarding the comparison of client data?

Audit documents are the joint property of the auditor and the audit client.

Discuss three of the following characteristics of relevant evidence. 1. Independence of provider 2. Effectiveness of client's internal controls 3. Auditor's direct knowledge 4. Qualification of individuals providing the information 5. Degree of objectivity 6. Timeliness

When practical and reasonable,U.S.auditing standards require the confirmation of

Auditors may decide to replace tests of details with analytical procedures when possible because the

The SEC requires the auditors of public companies to retain e-mail correspondence related to the audit.

The most widely used profitability ratio is the gross profit percent.

________ generally provide the most reliable evidence.

The two most important factors when determining the appropriate sample size in an audit are the auditor's expectation of misstatements and the objectivity of the evidence.

The two characteristics of the appropriateness of evidence are

Which of the following statements is True?

A company's long-term solvency

The most important benefits of industry comparisons are to aid in understanding the client's business and as an indication of the likelihood of financial failure.

When auditors use documentation to support recorded transactions and amounts,the process is usually called

When analytical procedures reveal unusual fluctuations in an account balance,the auditor will probably perform fewer tests of details for that account and increase the tests of controls related to the account.

Appropriateness of evidence is a measure of the

"Physical examination" is the inspection or count by the auditor of items such as

Auditor judgment is the primary determinant in determining the amount of evidence gathered.

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Planning and Analytical Procedures

Materiality and Risk

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls,

Completing the Tests in the Acquisition and Payment Cycle:

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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