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Unformatted text preview: e work of subordinates.
c. Provide reasonable assurance that the audit was conducted in accordance with standards.
d. Provide additional support of recorded amounts to the client. 44.
a An important benefit of industry comparisons is as:
a. an aid to understanding the client’s business.
b. an indicator of errors.
c. an indicator of fraud.
d. a least-cost indicator for audit procedures. 45.
a The permanent files included as part of audit documentation do not normally include:
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. 46.
d Those procedures specifically outlined in an audit program are primarily designed to
a. prevent litigation.
b. detect errors or irregularities. 1-117 c.
d. test internal systems.
gather evidence. 47.
c Evidence is generally considered appropriate when:
a. it has been obtained by random selection.
b. there is enough of it to afford a reasonable basis for an opinion on financial statements.
c. it has the qualities of being relevant, objective, and free from known bias.
d. it consists of written statements made by managers of the enterprise under audit. 48.
c Given the economic constraints in which auditors collect evidence, the auditor normally gathers
evidence that is:
d. completely convincing. 49.
b 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:
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. 50.
b Relevance can be considered only in terms of:
a. general audit objectives.
b. specific audit objectives.
c. transaction audit objectives.
d. balance audit objectives. 51.
c Audit documentation should possess certain characteristics. Which of the following is one of the
d. Audit documentation should be indexed
No Audit documentation should be
organized to benefit the client’s staff
b Which of the following statements is not a correct use of the terminology?
a. Evidence obtained from an independent source outside the client organization is more
reliable than that obtained from within.
b. Documentary evidence is more reliable when it is received by the auditor indirectly rather
c. Documents that originate outside the company are considered more reliable than those that
originate within the client’s organization.
d. External evidence, such as communications from banks, is generally regarded as more
reliable than answers obtained from inquiries of the client. 53.
a Evidence is usually more persuasive for balance sheet accounts when it is obtained:
a. as close to the balance sheet date as possible.
b. only from transactions occurring on the balance sheet date.
c. from various times throughout the client’s year.
d. from the time period when transactions in that account were most numerous during the
fiscal period. 1-118 54.
c Audit documentation should provide support for:
d. The audit report
No The financial statements
Yes 1-119 55.
a Which of the following statements is not correct concerning audit documentation?
a. Audit documentation is acquired to defend against claims that the auditor performed a
b. The only time anyone has a legal right to examine audit documentation is when the
documentation is subpoenaed by a court as legal evidence.
c. Audit documentation is the primary frame of reference used by supervisory personnel to
evaluate the sufficiency of evidence.
d. The auditor may deny requests by the client to review audit evidence. 56.
d Which of the following statements is not true?
a. A large sample of highly competent evidence is not persuasive unless 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
d. The persuasiveness of evidence can be evaluated after considering its competence and its
d Which of the following statements is not correct?
a. Analytical procedures are used to isolate accounts or transactions that should be
investigated more extensively.
b. For certain immaterial accounts, analytical procedures may be the only evidence needed.
c. In some instances, other types of evidence may be reduced when analytical proc...
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This note was uploaded on 02/04/2014 for the course ACCOUNTING 211 taught by Professor Alikapur during the Fall '13 term at American University of Sharjah.
- Fall '13