Exam 7: Nature and Type of Audit Evidence

Discuss three of the following influences on the persuasiveness of evidence. 1.Relevance 2.Independence of provider 3.Effectiveness of client's internal controls 4.Auditor's direct knowledge 5.Degree of objectivity 6.Timeliness

An example of a document the auditor receives from the client,but which was prepared by someone outside the client's organization,is a:

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

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.

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

Match nine of the terms (a-k)with the definitions provided below (1-9): a.Foot b.Compute c.Scan d.Inquire e.Count f.Trace g.Reperform h.Read i.Examine j.Observe k.Compare ________ 1.A calculation done by the auditor independent of the client. ________ 2.Addition of a column of numbers to determine if the total is the same as the client's. ________ 3.A comparison of information in two different locations. ________ 4.A use of the senses to assess certain activities. ________ 5.Following details of transactions from original documents to journals. ________ 6.A less detailed examination of a document or record to determine if there is something unusual warranting further investigation. ________ 7.Obtaining information from the client in response to specific questions. ________ 8.A determination of assets on hand at a given time. ________ 9.An examination of written information to determine facts pertinent to the audit.

Auditors must make decisions regarding what evidence to gather and how much to accumulate.Which of the following is a decision that must be made by auditors related to evidence?

Indicate whether confirmation of accounts receivable and accounts payable,provided they each are significant accounts,is required or optional:

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?

When determining sufficient and appropriate audit evidence in order to form an opinion on the client's financial statements the auditor compiles audit documentation to support the opinion.The largest portion of audit documentation will include detailed supporting schedules prepared by the client or the auditor in support of specific accounts on the financial statements.The major types of supporting schedules include analysis schedules and tests of reasonableness.Discuss those two schedules and give an example for each schedule.

Which of the following is not a correct combination of terms and related type of audit evidence?

Which of the following generally provides the most reliable evidence?

When preparing and organizing audit files:

Evidence is generally considered appropriate when:

Which of the following discoveries through the use of analytical procedures would most likely indicate a relatively high risk of financial failure?

For audit evidence to be compelling to the auditor it must be sufficient and appropriate.Which statement below is not correct regarding the appropriateness of audit evidence?

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

The permanent audit file would usually include the following:

Whenever practical and reasonable,the confirmation of accounts receivable is required of CPAs.

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