Question 1

The primary importance of the audit program is its guidance of the overall conduct of the audit.

Accepted Answer

A) True 
 B)False

Question 2

Observation suffers from which of the following limitations?

Accepted Answer

A) Observation of processing is rarely unobtrusive. 
B) Observation of processing on one day does not necessarily indicate how transactions were processed on a different day. 
C) All the above. 
D) None of the above. 
A) Observation of processing is rarely unobtrusive. 
B) Observation of processing on one day does not necessarily indicate how transactions were processed on a different day. 
C) All the above. 
D) None of the above.

Question 3

Vouching recorded transactions involves taking a sample entry from a journal and obtaining the original source documents to ensure the transaction occurred.

Accepted Answer

A) True 
 B)False

Question 4

A date at which audit evidence is collected earlier than the balance sheet date is referred to as what?

Accepted Answer

A) Subsequent date. 
B) Cutoff period. 
C) Significant date. 
D) Interim date. 
A) Subsequent date. 
B) Cutoff period. 
C) Significant date. 
D) Interim date.

Question 5

Which of the following assertions is the primary assertion that is satisfied by physically observing the client's count of inventory?

Accepted Answer

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

Question 6

While inspecting documents,the reliability depends on the nature and source of the documentation.

Accepted Answer

A) True 
 B)False

Question 7

The reliability of audit evidence is a measure of the quality of the underlying evidence and is influenced by risk,potential management bias associated with the evidence,and the quality of the internal control system underlying the preparation of the evidence.

Accepted Answer

A) True 
 B)False

Question 8

An auditor selects a sample of items recorded and traces them back to the supporting documentation.This is an example of which of the following?

Accepted Answer

A) Directional testing for existence. 
B) Directional testing for completeness. 
C) Direct testing for valuation. 
D) Direct testing for rights. 
A) Directional testing for existence. 
B) Directional testing for completeness. 
C) Direct testing for valuation. 
D) Direct testing for rights.

Question 9

The greatest risk of recording transactions in the incorrect period occurs during the roll-forward period.

Accepted Answer

A) True 
 B)False

Question 10

Recalculations of the client's computations would not include which of the following procedures?

Accepted Answer

A) Cutoff. 
B) Footing. 
C) Extension. 
D) Cross-footing. 
A) Cutoff. 
B) Footing. 
C) Extension. 
D) Cross-footing.

Question 11

The processes used by management in developing estimates include which of the following?

Accepted Answer

A) Controls over the process. 
B) The reliability of underlying data in developing the estimate. 
C) Use of outside experts by management (for example,how they were used and their expertise). 
D) All of the above. 
A) Controls over the process. 
B) The reliability of underlying data in developing the estimate. 
C) Use of outside experts by management (for example,how they were used and their expertise). 
D) All of the above.

Question 12

Which of the following is not a characteristic of quality audit documentation?

Accepted Answer

A) Clear communication as to how testing was performed,the results of testing,and conclusions. 
B) Organization and assembly of documentation in an orderly fashion. 
C) Headings that include the name and signature of the client representative that the auditor interacted with while performing testing. 
D) Authenticated identification of the person responsible for completing the procedure and conclusions. 
A) Clear communication as to how testing was performed,the results of testing,and conclusions. 
B) Organization and assembly of documentation in an orderly fashion. 
C) Headings that include the name and signature of the client representative that the auditor interacted with while performing testing. 
D) Authenticated identification of the person responsible for completing the procedure and conclusions.

Question 13

Appropriateness of evidence is a measure of which of the following?

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 14

Audit program Discuss the purpose of the audit program and its importance to the auditor.

Accepted Answer

An audit program specifies the actual pr

Question 15

Audit assertions and procedures for testing cash balances Identify and demonstrate the audit assertions and different approaches to obtaining audit evidence for an audit of cash balances in a financial statement audit.

Accepted Answer

In performing the audit of cash,the audi

Question 16

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

Accepted Answer

A) Confirmations returned by bank directly to the auditor. 
B) Letters of communication from the Securities Exchange Commission. 
C) Physical examination of perpetual inventory. 
D) Evidence from an easily overridden information system. 
A) Confirmations returned by bank directly to the auditor. 
B) Letters of communication from the Securities Exchange Commission. 
C) Physical examination of perpetual inventory. 
D) Evidence from an easily overridden information system.

Question 17

An audit program is created to specify which of the following?

Accepted Answer

A) The type of audit opinion to be rendered based upon procedures performed. 
B) The audit procedures that will be performed every year for the client. 
C) How an auditor should think while performing audit procedures. 
D) Audit objectives and procedures to be followed during the audit process. 
A) The type of audit opinion to be rendered based upon procedures performed. 
B) The audit procedures that will be performed every year for the client. 
C) How an auditor should think while performing audit procedures. 
D) Audit objectives and procedures to be followed during the audit process.

Question 18

Inspection of an asset generally provides reliable evidence about the rights and obligations assertion related to that asset.

Accepted Answer

A) True 
 B)False

Question 19

The auditor's concern for potential fraud in the financial statements will most likely result in increased testing for the overstatement of revenues.

Accepted Answer

A) True 
 B)False

Question 20

The auditor normally considers both underlying accounting records and corroborating information in the audit process.Underlying accounting records do not include which of the following items?

Accepted Answer

A) Evidence of controls. 
B) Minutes of meetings. 
C) Checks,invoices,and contracts. 
D) General and subsidiary ledgers. 
A) Evidence of controls. 
B) Minutes of meetings. 
C) Checks,invoices,and contracts. 
D) General and subsidiary ledgers.

The primary importance of the audit program is its guidance of the overall conduct of the audit.

Observation suffers from which of the following limitations?

Vouching recorded transactions involves taking a sample entry from a journal and obtaining the original source documents to ensure the transaction occurred.

A date at which audit evidence is collected earlier than the balance sheet date is referred to as what?

Which of the following assertions is the primary assertion that is satisfied by physically observing the client's count of inventory?

While inspecting documents,the reliability depends on the nature and source of the documentation.

The reliability of audit evidence is a measure of the quality of the underlying evidence and is influenced by risk,potential management bias associated with the evidence,and the quality of the internal control system underlying the preparation of the evidence.

An auditor selects a sample of items recorded and traces them back to the supporting documentation.This is an example of which of the following?

The greatest risk of recording transactions in the incorrect period occurs during the roll-forward period.

Recalculations of the client's computations would not include which of the following procedures?

The processes used by management in developing estimates include which of the following?

Which of the following is not a characteristic of quality audit documentation?

Appropriateness of evidence is a measure of which of the following?

Audit program Discuss the purpose of the audit program and its importance to the auditor.

Audit assertions and procedures for testing cash balances Identify and demonstrate the audit assertions and different approaches to obtaining audit evidence for an audit of cash balances in a financial statement audit.

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

An audit program is created to specify which of the following?

Inspection of an asset generally provides reliable evidence about the rights and obligations assertion related to that asset.

The auditor's concern for potential fraud in the financial statements will most likely result in increased testing for the overstatement of revenues.

The auditor normally considers both underlying accounting records and corroborating information in the audit process.Underlying accounting records do not include which of the following items?

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

The primary importance of the audit program is its guidance of the overall conduct of the audit.

Observation suffers from which of the following limitations?

Vouching recorded transactions involves taking a sample entry from a journal and obtaining the original source documents to ensure the transaction occurred.

A date at which audit evidence is collected earlier than the balance sheet date is referred to as what?

Which of the following assertions is the primary assertion that is satisfied by physically observing the client's count of inventory?

While inspecting documents,the reliability depends on the nature and source of the documentation.

The reliability of audit evidence is a measure of the quality of the underlying evidence and is influenced by risk,potential management bias associated with the evidence,and the quality of the internal control system underlying the preparation of the evidence.

An auditor selects a sample of items recorded and traces them back to the supporting documentation.This is an example of which of the following?

The greatest risk of recording transactions in the incorrect period occurs during the roll-forward period.

Recalculations of the client's computations would not include which of the following procedures?

The processes used by management in developing estimates include which of the following?

Which of the following is not a characteristic of quality audit documentation?

Appropriateness of evidence is a measure of which of the following?

Audit program Discuss the purpose of the audit program and its importance to the auditor.

Audit assertions and procedures for testing cash balances Identify and demonstrate the audit assertions and different approaches to obtaining audit evidence for an audit of cash balances in a financial statement audit.

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

An audit program is created to specify which of the following?

Inspection of an asset generally provides reliable evidence about the rights and obligations assertion related to that asset.

The auditor's concern for potential fraud in the financial statements will most likely result in increased testing for the overstatement of revenues.

The auditor normally considers both underlying accounting records and corroborating information in the audit process.Underlying accounting records do not include which of the following items?

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