Exam 6: Audit Evidence

Audit procedures Businesses often have litigation against them that the auditor has to identify and adequately disclose.List the financial assertions that apply to Contingencies.For each assertion indicate two or three audit procedures that would address that assertion. Organize you answer as follows: Financial statement assertion $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Audit procedure(s)

Audit evidence used to support an audit opinion is obtained solely from audit procedures.

Analytical procedures are a type of substantive evidence.

Underlying accounting records consist of evidence of controls as well as supporting records such as checks,invoices,the general and subsidiary ledger and journal entries.

Ulanda and Mudana,CPAs,are performing an audit on McArnee,Inc.Ulanda selects a sample from certain source documents and traces them forward to the accounts payable ledger.The purpose of this test is to determine the possibility of understated liabilities.

Which one of the following is the primary reason for documenting audit work?

The auditor's job is to gather sufficient appropriate audit evidence on which to base an opinion.

The reliability of a client's internal documentation is most affected by which of the following?

In a reasonableness test,the auditor develops an expected value of an account by using data wholly or partly independent of the client's accounting information system.

Liabilities and expenses are most often tested for overstatements.

Each of the audit procedures that an auditor could select possesses which of the following characteristics?

Audit findings represent a summary of incorrect transactions detected during the audit.

Footing,cross-footing,and tests of extensions are examples of which approach to gathering evidence?

Audit evidence consists of both information that corroborates management's assertions and information that contradicts such assertions.

A limitation of observation is that observing a process on one day does not necessarily indicate how the transactions were processed on a different day or over a relevant period of time.

Some audit procedures may be performed prior to the end of the year under audit.

Sufficient evidence gathered by the auditor involves which of the following?

Evidence can be directly or indirectly relevant to an assertion.

Audit planning workpapers are prepared to support the foundation of the audit and are prepared for the client to assist in their understanding of the specific audit procedures that will be performed.

When using confirmations with outside parties,the auditor must assure which of the following about the outside party?