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Audit Quiz 6

Terms in this set (10)

In designing audit programs containing the various audit procedures that the auditor will perform, the auditor should establish specific audit procedures and tests that are derived directly from the

Cost-benefit of gathering evidence.

Management assertions.

Timing of audit procedures.

Selected audit techniques.
Management assertions.
Which of the following is not one of the management assertions related to end of period balances?

Authorization

Existence

Completeness

Rights and Obligations
idk
Which of the following statements is true?

The quantity and quality of evidence that the auditor accumulates remains the same from audit to audit, but the management assertions vary, depending on the circumstances.

The management assertions remain the same from audit to audit, but the quantity and/or quality of evidence varies, depending on the circumstances.

The circumstances may vary from audit to audit, but the quantity and mix of evidence accumulated remains the same.

The management assertions may vary from audit to audit, but the circumstances remain the same.
The management assertions remain the same from audit to audit, but the quantity and/or quality of evidence varies, depending on the circumstances.
Auditors view evidence obtained from a knowledgeable independent source outside the auditee as generally less reliable than evidence obtained solely from within the auditee.

True

False
False
Which of the following statements is false (assume private company, not public company)?

Tests of details of balances emphasize the ending balances in the general ledger.

Tests of controls are performed regardless of whether the auditor intends to rely on a particular control to reduce further substantive testing.

Analytical procedures can be used to assess the overall reasonableness of transactions or account balances.

Substantive tests of transactions emphasize the verification of dollar amounts of transactions recorded in the journals and then posted in the general ledger.
Tests of controls are performed regardless of whether the auditor intends to rely on a particular control to reduce further substantive testing.
A benefit of comparing the auditee's data with industry averages is that it provides

an indication of the likelihood of financial failure.

an extremely accurate indication where errors exist in the statements.

a benchmark to be used in evaluating the auditee's budgets.

a comparison of "what is" with "what should be."
a comparison of "what is" with "what should be."
For the audit task described below, write the letter corresponding to the management assertion that the procedure supports.

AUDIT TASK: Trace a sample of transactions from vendors' invoices to the purchases journal to ensure that all inventory purchases were recorded.

Existence/Occurrence

Presentation & Disc.

Rights & Obligations

Completeness
Completeness
For the same audit task described above (from question #7), write the letter corresponding to the type of evidence that will be collected.

Analytical Procedures

Inspection of Documents and Records

Confirmation

Inquiry
Inspection of Documents and Records
During which phases of the audit are analytical procedures required to be implemented?

Planning only

Planning and Testing only.

Planning and Completion only.

All three phases

Never
Planning and Completion only.
In some cases for certain segments of the audit, analytical procedures may be the only substantive procedure the auditor uses to obtain evidence.

True

False
True
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