Question 1

Which of the following characteristics are not normally included in quality audit documentation?

Accepted Answer

A) Initials of the person preparing and reviewing the document. 
B) An assessment of whether the test indicates the possibility of material misstatement in an account. 
C) A cross-reference. 
D) All are included in quality audit documentation. 
A) Initials of the person preparing and reviewing the document. 
B) An assessment of whether the test indicates the possibility of material misstatement in an account. 
C) A cross-reference. 
D) All are included in quality audit documentation. D

Question 2

Which one of the following would be the most reliable type of evidence?

Accepted Answer

A) Photocopies. 
B) Indirectly obtained evidence. 
C) Observation of assets. 
D) Inquiry with the in-house attorney. 
A) Photocopies. 
B) Indirectly obtained evidence. 
C) Observation of assets. 
D) Inquiry with the in-house attorney. C

Question 3

The auditor utilizes the same audit program and the same procedures each year for each client in order to ensure that nothing is missed in the current year audit.

Accepted Answer

A) True 
 B)False  False

Question 4

Inquiries of client personnel are not a frequent means of evidence gathering by an auditor.

Accepted Answer

A) True 
 B)False

Question 5

When using the audit procedure vouching,the auditor is primarily concerned with which of the following assertions?

Accepted Answer

A) Completeness. 
B) Existence. 
C) Authorization. 
D) Classification. 
A) Completeness. 
B) Existence. 
C) Authorization. 
D) Classification.

Question 6

Directional testing is important to an auditor because of which of the following factors?

Accepted Answer

A) Certain accounts are more prone to be misstated by overstatement than others. 
B) The auditor must remain organized when conducting an audit. 
C) The primary concern of the auditor is the understatement of asset and revenue accounts. 
D) It tests for existence and completeness simultaneously. 
A) Certain accounts are more prone to be misstated by overstatement than others. 
B) The auditor must remain organized when conducting an audit. 
C) The primary concern of the auditor is the understatement of asset and revenue accounts. 
D) It tests for existence and completeness simultaneously.

Question 7

Which of the following is the primary source for evidence to corroborate the existence of pending litigation?

Accepted Answer

A) Vendor confirmations. 
B) Disclosures in financial statements. 
C) Management representation letters. 
D) Attorney confirmations. 
A) Vendor confirmations. 
B) Disclosures in financial statements. 
C) Management representation letters. 
D) Attorney confirmations.

Question 8

The direction of testing from the source documents to recorded amounts provides evidence regarding the completeness of liabilities and expenses.

Accepted Answer

A) True 
 B)False

Question 9

External documentation may lack reliability.Which of the following is the most probable reason for that?

Accepted Answer

A) The external party may be competent in performing duties. 
B) The documentation may be properly understood by the client in the response. 
C) The auditor may decide not to use the documentation and replace it with other documents. 
D) The documentation may have been altered if the process is not controlled from inception. 
A) The external party may be competent in performing duties. 
B) The documentation may be properly understood by the client in the response. 
C) The auditor may decide not to use the documentation and replace it with other documents. 
D) The documentation may have been altered if the process is not controlled from inception.

Question 10

Internal documentation is more reliable to the auditor if the internal control surrounding the documentation is considered strong than if it is considered weak.

Accepted Answer

A) True 
 B)False

Question 11

The client's verbal evidence is more reliable than evidence from independent outside sources.

Accepted Answer

A) True 
 B)False

Question 12

Vouching of transactions deals with which of the following?

Accepted Answer

A) Testing forward. 
B) Testing backward. 
C) Testing at a point in time. 
D) Directional testing either forward or backward. 
A) Testing forward. 
B) Testing backward. 
C) Testing at a point in time. 
D) Directional testing either forward or backward.

Question 13

When may audit procedures be performed? I - on the balance sheet date. II - prior to the balance sheet date. III - subsequent to the balance sheet date.

Accepted Answer

A) I only. 
B) I and III only. 
C) II only. 
D) I,II,and III. 
A) I only. 
B) I and III only. 
C) II only. 
D) I,II,and III.

Question 14

Directional testing Explain the meaning of "directional testing" and identify the reasons why directional testing leads to audit efficiency.Give examples of directional testing for the existence and completeness assertions.

Accepted Answer

Directional testing involves testing tra

Question 15

Which of the following is not an estimate that requires significant auditor judgment and skepticism?

Accepted Answer

A) Obligations for pension plans. 
B) Valuation of goodwill. 
C) Allowance for bad debt. 
D) Common stock and related additional paid-in capital. 
A) Obligations for pension plans. 
B) Valuation of goodwill. 
C) Allowance for bad debt. 
D) Common stock and related additional paid-in capital.

Question 16

Relevance and reliability of evidence make up the appropriateness of audit evidence.

Accepted Answer

A) True 
 B)False

Question 17

While inspecting documents,auditors should use original documents rather than copies,because copies are easy for management to falsify.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a factor that the auditor should consider as they affect the reliability and relevance of information produced by a management's specialist?

Accepted Answer

A) Competence,capabilities,and objectivity of that specialist. 
B) Work performed by that specialist. 
C) Appropriateness of that specialist's work as audit evidence for the relevant assertion. 
D) All of the above. 
A) Competence,capabilities,and objectivity of that specialist. 
B) Work performed by that specialist. 
C) Appropriateness of that specialist's work as audit evidence for the relevant assertion. 
D) All of the above.

Question 19

Appropriateness deals with the quantity of evidence the auditor collects,whereas sufficiency deals with the quality of evidence the auditor collects.

Accepted Answer

A) True 
 B)False

Question 20

Reprocessing of transactions helps establish that all valid items have been recorded.Reprocessing tests which of the following assertions?

Accepted Answer

A) Occurrence. 
B) Rights. 
C) Existence. 
D) Completeness. 
A) Occurrence. 
B) Rights. 
C) Existence. 
D) Completeness.

Which of the following characteristics are not normally included in quality audit documentation?

Which one of the following would be the most reliable type of evidence?

The auditor utilizes the same audit program and the same procedures each year for each client in order to ensure that nothing is missed in the current year audit.

Inquiries of client personnel are not a frequent means of evidence gathering by an auditor.

When using the audit procedure vouching,the auditor is primarily concerned with which of the following assertions?

Directional testing is important to an auditor because of which of the following factors?

Which of the following is the primary source for evidence to corroborate the existence of pending litigation?

The direction of testing from the source documents to recorded amounts provides evidence regarding the completeness of liabilities and expenses.

External documentation may lack reliability.Which of the following is the most probable reason for that?

Internal documentation is more reliable to the auditor if the internal control surrounding the documentation is considered strong than if it is considered weak.

The client's verbal evidence is more reliable than evidence from independent outside sources.

Vouching of transactions deals with which of the following?

When may audit procedures be performed? I - on the balance sheet date. II - prior to the balance sheet date. III - subsequent to the balance sheet date.

Directional testing Explain the meaning of "directional testing" and identify the reasons why directional testing leads to audit efficiency.Give examples of directional testing for the existence and completeness assertions.

Which of the following is not an estimate that requires significant auditor judgment and skepticism?

Relevance and reliability of evidence make up the appropriateness of audit evidence.

While inspecting documents,auditors should use original documents rather than copies,because copies are easy for management to falsify.

Which of the following is a factor that the auditor should consider as they affect the reliability and relevance of information produced by a management's specialist?

Appropriateness deals with the quantity of evidence the auditor collects,whereas sufficiency deals with the quality of evidence the auditor collects.

Reprocessing of transactions helps establish that all valid items have been recorded.Reprocessing tests which of the following assertions?

Quality Auditing: Why It Matters

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditor

Professional Legal Liability

Professional Auditing Standards and the Audit Opinion Formulation Process

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Long-Term Liabilities and Stockholders Equity Transactions

Completing a Quality Audit

Audit Reports

Filters

Exam 6: Audit Evidence

Which of the following characteristics are not normally included in quality audit documentation?

Which one of the following would be the most reliable type of evidence?

The auditor utilizes the same audit program and the same procedures each year for each client in order to ensure that nothing is missed in the current year audit.

Inquiries of client personnel are not a frequent means of evidence gathering by an auditor.

When using the audit procedure vouching,the auditor is primarily concerned with which of the following assertions?

Directional testing is important to an auditor because of which of the following factors?

Which of the following is the primary source for evidence to corroborate the existence of pending litigation?

The direction of testing from the source documents to recorded amounts provides evidence regarding the completeness of liabilities and expenses.

External documentation may lack reliability.Which of the following is the most probable reason for that?

Internal documentation is more reliable to the auditor if the internal control surrounding the documentation is considered strong than if it is considered weak.

The client's verbal evidence is more reliable than evidence from independent outside sources.

Vouching of transactions deals with which of the following?

When may audit procedures be performed? I - on the balance sheet date. II - prior to the balance sheet date. III - subsequent to the balance sheet date.

Directional testing Explain the meaning of "directional testing" and identify the reasons why directional testing leads to audit efficiency.Give examples of directional testing for the existence and completeness assertions.

Which of the following is not an estimate that requires significant auditor judgment and skepticism?

Relevance and reliability of evidence make up the appropriateness of audit evidence.

While inspecting documents,auditors should use original documents rather than copies,because copies are easy for management to falsify.

Which of the following is a factor that the auditor should consider as they affect the reliability and relevance of information produced by a management's specialist?

Appropriateness deals with the quantity of evidence the auditor collects,whereas sufficiency deals with the quality of evidence the auditor collects.

Reprocessing of transactions helps establish that all valid items have been recorded.Reprocessing tests which of the following assertions?

Quality Auditing: Why It Matters

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditor

Professional Legal Liability

Professional Auditing Standards and the Audit Opinion Formulation Process

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Long-Term Liabilities and Stockholders Equity Transactions

Completing a Quality Audit

Audit Reports

Filters