Question 1

When the auditor uses the audit procedure vouching she is primarily concerned with which of the following audit objectives when testing classes of transactions?

Accepted Answer

A) occurrence 
B) completeness 
C) authorization 
D) classification 
A) occurrence 
B) completeness 
C) authorization 
D) classification

Question 2

A(n)________ is the detailed instruction that explains the audit evidence to be obtained during the audit.

Accepted Answer

A) audit objective 
B) audit procedure 
C) audit assertion 
D) audit program 
A) audit objective 
B) audit procedure 
C) audit assertion 
D) audit program

Question 3

Auditing standards require that records for audits of private companies be retained for a minimum of seven years.

Accepted Answer

A) True 
 B)False

Question 4

Audit documentation should possess certain characteristics.Which of the following is True regarding those characteristics?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 5

Given the economic and time constraints in which auditors can collect evidence regarding management assertions about the financial statements,the auditor normally gathers evidence that is

Accepted Answer

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

Question 6

Evidence is usually more persuasive for balance sheet accounts when it is obtained

Accepted Answer

A) as close to the balance sheet date as possible. 
B) only from transactions occurring on the balance sheet date. 
C) from various times throughout the client's year. 
D) from the time period when transactions in that account were most numerous during the fiscal period. 
A) as close to the balance sheet date as possible. 
B) only from transactions occurring on the balance sheet date. 
C) from various times throughout the client's year. 
D) from the time period when transactions in that account were most numerous during the fiscal period.

Question 7

Auditors compare client data with

Accepted Answer

A) industry data. 
B) client-determined expected results. 
C) similar prior-period data. 
D) all of the above. 
A) industry data. 
B) client-determined expected results. 
C) similar prior-period data. 
D) all of the above.

Question 8

Define the following terms commonly used in audit procedures:
1. examine
2. scan
3. compute
4. foot
5. compare
6. count
7. vouch

Accepted Answer

1. examine - a reasonably detailed study

Question 9

Evidence is generally considered appropriate when

Accepted Answer

A) it has been obtained by random selection. 
B) there is enough of it to afford a reasonable basis for an opinion on financial statements. 
C) it is relevant to the audit objective being tested. 
D) it consists of written statements made by managers of the company under audit. 
A) it has been obtained by random selection. 
B) there is enough of it to afford a reasonable basis for an opinion on financial statements. 
C) it is relevant to the audit objective being tested. 
D) it consists of written statements made by managers of the company under audit.

Question 10

Audit documentation of the evidence gathered by the auditor should meet which of the following criteria?

Accepted Answer

A) Workpapers are prepared in sufficient detail so that they can be given to the client for future reference. 
B) The content is sufficient to provide support for the auditor's opinion,including the auditor's representation as to compliance with auditing standards. 
C) Audit evidence is principally gathered to determine if the client's financial statements,as prepared by management,can be relied upon to make managerial decisions about the firm. 
D) Audit evidence as displayed in the workpapers is primarily performed to protect the auditing firm in the case of a lawsuit by investors. 
A) Workpapers are prepared in sufficient detail so that they can be given to the client for future reference. 
B) The content is sufficient to provide support for the auditor's opinion,including the auditor's representation as to compliance with auditing standards. 
C) Audit evidence is principally gathered to determine if the client's financial statements,as prepared by management,can be relied upon to make managerial decisions about the firm. 
D) Audit evidence as displayed in the workpapers is primarily performed to protect the auditing firm in the case of a lawsuit by investors.

Question 11

You are auditing the company's purchasing process for goods and services.You are primarily concerned with the company not recording all purchase transactions.Which audit procedure below would be the most effective audit procedure in this case?

Accepted Answer

A) vouching from the accounts payable account to the vendor invoices 
B) tracing vendor invoices to recorded amounts in the accounts payable account 
C) confirmation accounts payable recorded amounts 
D) reconciling the accounts payable subsidiary ledger to the accounts payable account 
A) vouching from the accounts payable account to the vendor invoices 
B) tracing vendor invoices to recorded amounts in the accounts payable account 
C) confirmation accounts payable recorded amounts 
D) reconciling the accounts payable subsidiary ledger to the accounts payable account

Question 12

Which of the following is the most objective type of evidence?

Accepted Answer

A) a letter written by the client's attorney discussing the likely outcome of outstanding lawsuits 
B) the physical count of securities and cash 
C) inquiries of the credit manager about the collectability of noncurrent accounts receivable 
D) observation of cobwebs on some inventory bins 
A) a letter written by the client's attorney discussing the likely outcome of outstanding lawsuits 
B) the physical count of securities and cash 
C) inquiries of the credit manager about the collectability of noncurrent accounts receivable 
D) observation of cobwebs on some inventory bins

Question 13

Match between columns
                        Premises: a determination of assets on hand at a given time
a use of the senses to assess certain activities
an examination of written information to determine facts pertinent to the audit
obtaining information from the client in response to specific questions
addition of a column of numbers to determine if the total is the same as the client's
a less detailed examination of a document or record to determine if there is something unusual warranting further investigation
a comparison of information in two different locations
a calculation done by the auditor independent of the client
following details of transactions from original documents to journals

Accepted Answer

The Answer of trace and read and reperform and inquire is...

Question 14

Analytical procedures must be used during which phase(s)of the audit?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 15

Audit evidence has two primary qualities for the auditor;relevance and reliability.Given the choices below,which provides the auditor with the most reliable audit evidence?

Accepted Answer

A) general ledger account balances 
B) confirmation of accounts receivable balance received from a customer 
C) internal memo explaining the issuance of a credit memo 
D) copy of month-end adjusting entries 
A) general ledger account balances 
B) confirmation of accounts receivable balance received from a customer 
C) internal memo explaining the issuance of a credit memo 
D) copy of month-end adjusting entries

Question 16

Which of the following is a correct statement regarding audit evidence?

Accepted Answer

A) A large sample of evidence provided by an independent party is always considered persuasive evidence. 
B) A small sample of only one or two pieces of highly appropriate evidence is always considered persuasive evidence. 
C) The auditor must obtain a sufficient amount of relevant and reliable evidence to form an opinion on the fairness of the financial statements. 
D) Evidence is usually more reliable for balance sheet accounts when it is obtained within six months of the balance sheet date. 
A) A large sample of evidence provided by an independent party is always considered persuasive evidence. 
B) A small sample of only one or two pieces of highly appropriate evidence is always considered persuasive evidence. 
C) The auditor must obtain a sufficient amount of relevant and reliable evidence to form an opinion on the fairness of the financial statements. 
D) Evidence is usually more reliable for balance sheet accounts when it is obtained within six months of the balance sheet date.

Question 17

Since confirmation replies and copies of client agreements are not considered schedules in the usual sense,they are not indexed and filed.

Accepted Answer

A) True 
 B)False

Question 18

An auditor can use engagement management software to facilitate tracking audit progress.

Accepted Answer

A) True 
 B)False

Question 19

An audit program is the list of audit procedures for an audit area or an entire audit.

Accepted Answer

A) True 
 B)False

Question 20

Inspection consists of looking at a process or procedure being performed by others.

Accepted Answer

A) True 
 B)False

Exam 7: Audit Evidence

When the auditor uses the audit procedure vouching she is primarily concerned with which of the following audit objectives when testing classes of transactions?

A(n)________ is the detailed instruction that explains the audit evidence to be obtained during the audit.

Auditing standards require that records for audits of private companies be retained for a minimum of seven years.

Audit documentation should possess certain characteristics.Which of the following is True regarding those characteristics?

Given the economic and time constraints in which auditors can collect evidence regarding management assertions about the financial statements,the auditor normally gathers evidence that is

Evidence is usually more persuasive for balance sheet accounts when it is obtained

Auditors compare client data with

Define the following terms commonly used in audit procedures: 1. examine 2. scan 3. compute 4. foot 5. compare 6. count 7. vouch

Evidence is generally considered appropriate when

Audit documentation of the evidence gathered by the auditor should meet which of the following criteria?

You are auditing the company's purchasing process for goods and services.You are primarily concerned with the company not recording all purchase transactions.Which audit procedure below would be the most effective audit procedure in this case?

Which of the following is the most objective type of evidence?

Analytical procedures must be used during which phase(s)of the audit?

Audit evidence has two primary qualities for the auditor;relevance and reliability.Given the choices below,which provides the auditor with the most reliable audit evidence?

Which of the following is a correct statement regarding audit evidence?

Since confirmation replies and copies of client agreements are not considered schedules in the usual sense,they are not indexed and filed.

An auditor can use engagement management software to facilitate tracking audit progress.

An audit program is the list of audit procedures for an audit area or an entire audit.

Inspection consists of looking at a process or procedure being performed by others.

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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