Question 1

Which of the following statements is true?

Accepted Answer

A)   A large sample of highly competent evidence is persuasive if it is relevant to the objective being tested.
B)   A large sample of evidence that is neither competent nor timely is not persuasive.
C)   A small sample of only one or two pieces of relevant, competent, and timely evidence lacks persuasiveness.
D)   The persuasiveness of evidence can be evaluated after considering its sufficiency.E) A) and B)
F) B) and D)

Question 2

The auditor's results of evidence gathering procedures are contained in audit documentation for the audit. When preparing the requisite audit, documentation should be cognizant of:

Accepted Answer

A)   Documents are kept by the client for easy reference for their accounting staff.
B)   Audit documents should be considered as a substitute for the clients accounting records.
C)   Audit documents are designed to facilitate the review and supervision of the work performed by the audit team by a reviewing partner.
D)   Audit documents are the sole source of evidence that an auditor uses in forming an opinion about the client's financial statements.E) A) and B)
F) A) and C)

Question 3

When the auditor uses tracing as an audit procedure for tests of transactions she is primarily concerned with which audit objective?

Accepted Answer

A)   Occurrence
B)   Completeness
C)   Cutoff
D)   ClassificationE) B) and C)
F) A) and B)

Question 4

An analytical procedure used to test the reasonableness of an account balance occurs when the auditor calculates the expected balance and compares it with the actual balance. The auditor's expected account balance may be determined by:

Accepted Answer

A)   using industry standards.
B)   using Dun and Bradstreet reports.
C)   relating it to another account that involves financial statement articulation.
D)   inquiry of the client.E) B) and C)
F) A) and D)

Question 5

Which one of the following is not one of the primary purposes of audit documentation prepared by the audit team?

Accepted Answer

A)   A basis for planning the audit.
B)   A record of the evidence accumulated and the results of the tests.
C)   A basis for review by supervisors and partners.
D)   A basis for determining work deficiencies by peer review teams.E) A) and C)
F) C) and D)

Question 6

Determine which of the following is most correct regarding the reliability of audit evidence.

Accepted Answer

A)   Information that is indirectly obtained from external sources is the most reliable audit evidence.
B)   Reliability of audit evidence is dependent upon the evidence being convincing.
C)   Reliability of evidence refers to the amount of evidence obtained.
D)   An effective internal control system provides more reliable audit evidence.E) A) and B)
F) None of the above

Question 7

A canceled check written by the client, made payable to a local supplier and drawn on the client's bank account is one type of internal document.

Accepted Answer

A) True 
 B)False

Question 8

Audit documentation should provide support for:

Accepted Answer

A)   
B)   
C)   
D)   E) A) and D)
F) A) and C)

Question 9

The auditor is concerned that a client is failing to bill customers for shipments. An audit procedure that would gather relevant evidence would be to:

Accepted Answer

A)   select a sample of duplicate sales invoices and trace each to related shipping documents.
B)   trace a sample of shipping documents to related duplicate sales invoices.
C)   trace a sample of Sales Journal entries to the Accounts Receivable subsidiary ledger.
D)   compare the total of the Schedule of Accounts Receivable with the balance of the Accounts Receivable account in the general ledger.E) A) and B)
F) A) and C)

Question 10

Which of the following is not a characteristic of the reliability of evidence?

Accepted Answer

A)   effectiveness of client internal controls
B)   education of auditor
C)   independence of information provider
D)   timelinessE) A) and D)
F) B) and C)

Question 11

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?

Accepted Answer

A)   
B)   
C)   
D)   E) A) and C)
F) A) and B)

Question 12

The basis for preparing financial statements for companies is the general ledger. As soon as possible the auditor obtains the general ledger accounts of the client and prepares a working trial balance. Discuss the audit documentation in the current file that relates to the working trial balance. Include a description of lead and support schedules in your answer.

Accepted Answer

Lead Schedules-each line item on the wor...

Question 13

Confirmations are ordinarily used to verify account balances, but may be used to verify transactions.

Accepted Answer

A) True 
 B)False

Question 14

Audit documentation should possess certain characteristics. Which of the following is true regarding those characteristics?

Accepted Answer

A)   
B)   
C)   
D)   E) B) and D)
F) C) and D)

Question 15

Define the following terms commonly used in audit procedures:
1. Examine
2. Scan
3. Compute
4. Foot
5. Compare
6. Count
7. Vouch

Accepted Answer

1. Examine - A reasonably detailed study...

Question 16

The permanent files included as part of audit documentation do not normally include:

Accepted Answer

A)   a copy of the current and prior years' audit programs.
B)   copies of articles of incorporation, bylaws and contracts.
C)   information related to the understanding of internal control.
D)   results of analytical procedures from prior years.E) A) and B)
F) B) and D)

Question 17

Match five of the terms (a-h) with the definitions provided below (1-5):
a. Audit documentation
b. Audit procedures
c. Audit objectives
d. Analytical procedures
e. Budgets
f. Reliability of evidence
g. Sufficiency of evidence
h. Persuasiveness of evidence
________ 1. Use of comparisons and relationships to assess the reasonableness of account balances.
________ 2. Detailed instructions for the collection of a type of audit evidence.
________ 3. The degree to which evidence can be considered believable or trustworthy.
________ 4. Contains all the information that the auditor considers necessary to conduct an adequate audit and to provide support for the audit report.
________ 5. This is determined by the amount of evidence obtained.

Accepted Answer

1. d
2. b
...

Question 18

Audit evidence to support an opinion about the fairness of a client's financial statements consists entirely of written information.

Accepted Answer

A) True 
 B)False

Question 19

Given the audit procedures below, which one provides the most reliable evidence?

Accepted Answer

A)   Confirmations
B)   Recalculation
C)   Reperformance
D)   ObservationsE) All of the above
F) B) and D)

Question 20

"The use of comparisons and relationships to assess whether account balances or other data appear reasonable compared to the auditor's expectations" is a definition of:

Accepted Answer

A)   analytical procedures.
B)   tests of transactions.
C)   tests of balances.
D)   auditing.E) A) and C)
F) All of the above

Exam 7: Audit Evidence

Audit documentation should provide support for:

Correct Answer
verified

Audit evidence to support an opinion about the fairness of a client's financial statements consists entirely of written information.

Correct Answer
verified

Confirmations are ordinarily used to verify account balances, but may be used to verify transactions.

Correct Answer
verified

Correct Answer
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Lead Schedules-each line item on the wor...
View Answer

Correct Answer
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1. d
2. b
...
View Answer

When the auditor uses tracing as an audit procedure for tests of transactions she is primarily concerned with which audit objective?

Correct Answer
verified

Determine which of the following is most correct regarding the reliability of audit evidence.

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

The permanent files included as part of audit documentation do not normally include:

Correct Answer
verified

Which of the following is not a characteristic of the reliability of evidence?

Correct Answer
verified

An analytical procedure used to test the reasonableness of an account balance occurs when the auditor calculates the expected balance and compares it with the actual balance. The auditor's expected account balance may be determined by:

Correct Answer
verified

The auditor's results of evidence gathering procedures are contained in audit documentation for the audit. When preparing the requisite audit, documentation should be cognizant of:

Correct Answer
verified

Which one of the following is not one of the primary purposes of audit documentation prepared by the audit team?

Correct Answer
verified

A canceled check written by the client, made payable to a local supplier and drawn on the client's bank account is one type of internal document.

Correct Answer
verified

Define the following terms commonly used in audit procedures: 1. Examine 2. Scan 3. Compute 4. Foot 5. Compare 6. Count 7. Vouch

Correct Answer
verified
1. Examine - A reasonably detailed study...
View Answer

Audit documentation should possess certain characteristics. Which of the following is true regarding those characteristics?

Correct Answer
verified

"The use of comparisons and relationships to assess whether account balances or other data appear reasonable compared to the auditor's expectations" is a definition of:

Correct Answer
verified

The auditor is concerned that a client is failing to bill customers for shipments. An audit procedure that would gather relevant evidence would be to:

Correct Answer
verified

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?

Correct Answer
verified

Given the audit procedures below, which one provides the most reliable evidence?

Correct Answer
verified

Exam 7: Audit Evidence

Audit documentation should provide support for:

Correct AnswerverifiedShow Answer

Audit evidence to support an opinion about the fairness of a client's financial statements consists entirely of written information.

Correct AnswerverifiedShow Answer

Confirmations are ordinarily used to verify account balances, but may be used to verify transactions.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedLead Schedules-each line item on the wor...View AnswerShow Answer

Correct Answerverified1. d2. b...View AnswerShow Answer

When the auditor uses tracing as an audit procedure for tests of transactions she is primarily concerned with which audit objective?

Correct AnswerverifiedShow Answer

Determine which of the following is most correct regarding the reliability of audit evidence.

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

The permanent files included as part of audit documentation do not normally include:

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of the reliability of evidence?

Correct AnswerverifiedShow Answer

An analytical procedure used to test the reasonableness of an account balance occurs when the auditor calculates the expected balance and compares it with the actual balance. The auditor's expected account balance may be determined by:

Correct AnswerverifiedShow Answer

The auditor's results of evidence gathering procedures are contained in audit documentation for the audit. When preparing the requisite audit, documentation should be cognizant of:

Correct AnswerverifiedShow Answer

Which one of the following is not one of the primary purposes of audit documentation prepared by the audit team?

Correct AnswerverifiedShow Answer

A canceled check written by the client, made payable to a local supplier and drawn on the client's bank account is one type of internal document.

Correct AnswerverifiedShow Answer

Define the following terms commonly used in audit procedures: 1. Examine 2. Scan 3. Compute 4. Foot 5. Compare 6. Count 7. Vouch

Correct Answerverified1. Examine - A reasonably detailed study...View AnswerShow Answer

Audit documentation should possess certain characteristics. Which of the following is true regarding those characteristics?

Correct AnswerverifiedShow Answer

"The use of comparisons and relationships to assess whether account balances or other data appear reasonable compared to the auditor's expectations" is a definition of:

Correct AnswerverifiedShow Answer

The auditor is concerned that a client is failing to bill customers for shipments. An audit procedure that would gather relevant evidence would be to:

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Given the audit procedures below, which one provides the most reliable evidence?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Lead Schedules-each line item on the wor...
View Answer

Correct Answer
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1. d
2. b
...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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1. Examine - A reasonably detailed study...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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