Chapter 7 A Framework for A - Chapter 7 A Framework for...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 7: A Framework for Audit Evidence Chapter 7: A Framework for Audit Evidence Student: ___________________________________________________________________________ 1. Audit evidence is also referred to as an audit opinion. True False 2. The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance. True False 3. Based upon the risk of misstatement, the auditor uses judgment to determine which balances and transactions should be tested in the financial statements. True False 4. Assertions are relevant to the audit process because they are the representations of management embodied in the financial statements. True False 5. Assertions are not relevant to an audit because they relate to the auditor and financial statements are management's responsibility instead of the auditor's. True False 6. Presentation and disclosure assertions state that all transactions and balances are properly presented, and the company has disclosed every financial transaction and arrangement it entered into during the year in the footnotes. True False
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
7. Evidence is generally of higher quality if it involves a member of the audit team actually going out to physically observe it than if it was obtained from another source. True False 8. A client's original signed purchase order is higher quality evidence than a confirmation returned from the client's bank. True False 9. An auditor may test an account balance by testing the transactions that comprise the balance, by directly testing the final account balance, or a combination of both. True False 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. True False 11. Documentation that is produced electronically by the client's internal systems is not considered appropriate to the audit process. True False 12. Emails and faxes are documents that represent important evidence to the auditor, however, they are sometimes difficult to substantiate as authentic. True False 13. Test of transactions, directional testing and substantive analytical procedures are used to provide evidence about management's assertions embedded in the financial statements. True False 14. Vouching recorded transactions involves taking a sample from the journal and tracing the items back to the source documents to ensure the transactions occurred. True False
Image of page 2
15. Vouching is a process that helps establish that recorded transactions are valid. True False 16. One strategy used by auditors in testing assertions is to perform directional testing to find overstatements or understatements. True False 17. The direction of testing from recorded amounts toward supporting documentation provides evidence as to existence of assets and revenues.
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern