Question 1

Reprocessing of transactions involves 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 2

Performance of audit procedures at an interim date causes the risk of material misstatement occurring between the interim date and the end of the year to do which of the following?

Accepted Answer

A) Decrease. 
B) Increase. 
C) Remain the same. 
D) Become more difficult to ascertain. 
A) Decrease. 
B) Increase. 
C) Remain the same. 
D) Become more difficult to ascertain.

Question 3

The auditor uses professional judgment to determine which audit procedures to perform.

Accepted Answer

A) True 
 B)False

Question 4

An outside specialist may assist the auditor in obtaining sufficient,appropriate evidence concerning the analysis of complex tax compliance issues.

Accepted Answer

A) True 
 B)False

Question 5

An example of an external document would include which of the following?

Accepted Answer

A) Vendor invoices. 
B) Customer orders. 
C) Confirmation replies from customers. 
D) All the above. 
A) Vendor invoices. 
B) Customer orders. 
C) Confirmation replies from customers. 
D) All the above.

Question 6

The type of audit procedure known as inquiry does not ordinarily provide sufficient audit evidence of the absence of a material misstatement,nor is it alone sufficient to test the operating effectiveness of controls.

Accepted Answer

A) True 
 B)False

Question 7

Proper audit documentation Audit documentation serves as the primary support of an audit.Give at least six examples of the components of proper working paper documentation.

Accepted Answer

Audit documentation serves as the primar

Question 8

The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance.

Accepted Answer

A) True 
 B)False

Question 9

Directional testing involves testing transactions or balances for which type of error?

Accepted Answer

A) Overstatement. 
B) Understatement. 
C) Either overstatement or understatement. 
D) Neither overstatement nor understatement. 
A) Overstatement. 
B) Understatement. 
C) Either overstatement or understatement. 
D) Neither overstatement nor understatement.

Question 10

The auditor may use analytical procedures during which phase of the audit?

Accepted Answer

A) Planning the audit. 
B) Substantive testing. 
C) Completing the audit. 
D) All of the above. 
A) Planning the audit. 
B) Substantive testing. 
C) Completing the audit. 
D) All of the above.

Question 11

Reliability of audit evidence The Auditing Standards Board established guidelines to assist auditors in evaluating the reliability of audit evidence.Discuss the criteria for the more reliable types of evidence and include an example for each.

Accepted Answer

Evidence that is considered to be more r

Question 12

For an auditor to test the existence assertion of assets,testing will be performed beginning with the recorded asset and ending with the source documents.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of inspection of documentation?

Accepted Answer

A) Review shipping documents. 
B) Estimate the expected amount of interest income. 
C) Observe controls. 
D) Recalculate the total amount include on a sales invoice. 
A) Review shipping documents. 
B) Estimate the expected amount of interest income. 
C) Observe controls. 
D) Recalculate the total amount include on a sales invoice.

Question 14

One strategy used by auditors in testing assertions is to perform directional testing to find overstatements or understatements.

Accepted Answer

A) True 
 B)False

Question 15

The purpose of performing analytical procedures in the planning stage of an audit is to gather audit evidence and make conclusions about account balances.

Accepted Answer

A) True 
 B)False

Question 16

Two determinants of the persuasiveness of evidence include which of the following?

Accepted Answer

A) Competence and sufficiency. 
B) Relevance and reliability. 
C) Appropriateness and sufficiency. 
D) Independence and effectiveness. 
A) Competence and sufficiency. 
B) Relevance and reliability. 
C) Appropriateness and sufficiency. 
D) Independence and effectiveness.

Question 17

Many related-party transactions have no higher risk of material misstatement than similar transactions between unrelated parties.

Accepted Answer

A) True 
 B)False

Question 18

An audit program provides an effective means for which of the following?

Accepted Answer

A) Reviewing the completeness and persuasiveness of procedures performed. 
B) Recording the audit work performed and those responsible for performing the work. 
C) Organizing and distributing the work. 
D) All the above. 
A) Reviewing the completeness and persuasiveness of procedures performed. 
B) Recording the audit work performed and those responsible for performing the work. 
C) Organizing and distributing the work. 
D) All the above.

Question 19

Audit documentation should generally be retained for at least seven years.

Accepted Answer

A) True 
 B)False

Question 20

Appropriateness and sufficiency of evidence Discuss the importance of the phrase "sufficient appropriate evidence is to be obtained..." How do auditing standards define sufficiency and appropriateness?

Accepted Answer

Audit standards states that auditors mus

Reprocessing of transactions involves which of the following?

Performance of audit procedures at an interim date causes the risk of material misstatement occurring between the interim date and the end of the year to do which of the following?

The auditor uses professional judgment to determine which audit procedures to perform.

An outside specialist may assist the auditor in obtaining sufficient,appropriate evidence concerning the analysis of complex tax compliance issues.

An example of an external document would include which of the following?

The type of audit procedure known as inquiry does not ordinarily provide sufficient audit evidence of the absence of a material misstatement,nor is it alone sufficient to test the operating effectiveness of controls.

Proper audit documentation Audit documentation serves as the primary support of an audit.Give at least six examples of the components of proper working paper documentation.

The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance.

Directional testing involves testing transactions or balances for which type of error?

The auditor may use analytical procedures during which phase of the audit?

Reliability of audit evidence The Auditing Standards Board established guidelines to assist auditors in evaluating the reliability of audit evidence.Discuss the criteria for the more reliable types of evidence and include an example for each.

For an auditor to test the existence assertion of assets,testing will be performed beginning with the recorded asset and ending with the source documents.

Which of the following is an example of inspection of documentation?

One strategy used by auditors in testing assertions is to perform directional testing to find overstatements or understatements.

The purpose of performing analytical procedures in the planning stage of an audit is to gather audit evidence and make conclusions about account balances.

Two determinants of the persuasiveness of evidence include which of the following?

Many related-party transactions have no higher risk of material misstatement than similar transactions between unrelated parties.

An audit program provides an effective means for which of the following?

Audit documentation should generally be retained for at least seven years.

Appropriateness and sufficiency of evidence Discuss the importance of the phrase "sufficient appropriate evidence is to be obtained..." How do auditing standards define sufficiency and appropriateness?

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

Reprocessing of transactions involves which of the following?

Performance of audit procedures at an interim date causes the risk of material misstatement occurring between the interim date and the end of the year to do which of the following?

The auditor uses professional judgment to determine which audit procedures to perform.

An outside specialist may assist the auditor in obtaining sufficient,appropriate evidence concerning the analysis of complex tax compliance issues.

An example of an external document would include which of the following?

The type of audit procedure known as inquiry does not ordinarily provide sufficient audit evidence of the absence of a material misstatement,nor is it alone sufficient to test the operating effectiveness of controls.

Proper audit documentation Audit documentation serves as the primary support of an audit.Give at least six examples of the components of proper working paper documentation.

The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance.

Directional testing involves testing transactions or balances for which type of error?

The auditor may use analytical procedures during which phase of the audit?

Reliability of audit evidence The Auditing Standards Board established guidelines to assist auditors in evaluating the reliability of audit evidence.Discuss the criteria for the more reliable types of evidence and include an example for each.

For an auditor to test the existence assertion of assets,testing will be performed beginning with the recorded asset and ending with the source documents.

Which of the following is an example of inspection of documentation?

One strategy used by auditors in testing assertions is to perform directional testing to find overstatements or understatements.

The purpose of performing analytical procedures in the planning stage of an audit is to gather audit evidence and make conclusions about account balances.

Two determinants of the persuasiveness of evidence include which of the following?

Many related-party transactions have no higher risk of material misstatement than similar transactions between unrelated parties.

An audit program provides an effective means for which of the following?

Audit documentation should generally be retained for at least seven years.

Appropriateness and sufficiency of evidence Discuss the importance of the phrase "sufficient appropriate evidence is to be obtained..." How do auditing standards define sufficiency and appropriateness?

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