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Auditing Chapter 4
Terms in this set (46)
A confirmation is used to:
Verify a representation from a third party
Which of the following elements ultimately determined the amount of audit work that is necessary in the circumstance to afford a reasonable basis for an opinion?
Which of the following is an essential factor in evaluating the sufficiency of evidence? The evidence must
Be persuasive enough to enable the auditor to form an opinion
Which set of assertions is tested when, during completion of the audit, the audit partner conducts a final review if the format of the entity's balance sheet?
Assertions about presentation and disclosure
In testing plant and equipment balances, an auditor may physically inspect new additions listed on the summary of plant and equipment transactions for the year. This procedure is designed to obtain evidence concerning management's assertions about classes of transactions and events, and specifically, which assertion ?
Tracing is used primarily to test which of the following assertions about classes of transactions?
Vouching is used primary to test which of the following assertions about classes of transaction?
In designing written audit programs, an auditor should plan specific audit procedures to test
Footing is an example of
In determining whether transactions have been recorded, the direction of the audit testing should start from the
Original source documents
To test for unsupported entries in the ledger, the direction of audit testing should start from the
Which of the following presumptions does not relate to the appropriateness of audit evidence?
An auditor's opinion, to be economically useful, is formed within a reasonable time and based on evidence obtained at a reasonable cost
Of the following, which is the least persuasive type of audit evidence?
Copied of client sales invoices inspected by the auditor
The third general auditing standard requires that due professional cafe be exercised in the performance of the examination and the perpetration of the report. Due professional care deals in the matter of audit documents required that audit documents'
Content by sufficient to provide support for the auditor's report, including the auditor's representation as to compliance with auditing standards
Which of the following show the detailed general ledger accounts that make up a financial statement category on the auditor's working trail balance?
The permanent (continuing) file on an auditor's working papers most likely would include compiles of the
An example of audit evidence with a medium level of reliability is:
Auditing documentation prepared on audits of publicly held client's is the property of the
All of the following are typically in the current file except
Charts of accounts
You are guilting a store that sells merchandise. Some of the store merchandise is held on consignment. Which account balance assertion for inventory should you be most concerned about verifying?
Rights and obligations
You are auditing a manufacturing company which has a large production facility. Some of the production equipment is held through lease agreements. Which of the following is the account balance assertion you would be most concerned about?
Rights and obligations
Which if he following procedures would an auditor most likely perform to verify management's assertion of completeness?
Compare a sample of shipping documents to related sales invoices
Which of the following best describes the primary purpose of audit procedures ?
To gather corroborative evidence about management's assertions
Procedures specifically outlined in an audit program are designed primarily to
Gather evidence about management's assertions
Which statement concerning audit evidence is not valid?
The auditor performs tests to collect convincing evidence that the financial statements are not misstated
Each of the following might, by itself, form a valid basis for an auditor to reduce substantive testing except for the
Difficulty and expense involved in testing a particular item
Of the following, the most reliable type of evidence typically is
Which of the following presumptions is correct about the reliability of audit evidence?
An effective internal control system provides more reliable audit evidence
Which of the following types of documentary evidence should the auditor consider to be the most reliable?
Confirmation of an account payable balance mailed by and returned directly to the auditor
Which of the following is the least persuasive documentation in support of an auditor's opinion?
Schedules of details of physically inventory counts conducted by the client
Which of the following statements is generally correct about the appropriateness of audit evidence?
The more effective the internal control, the more assurance it provides about the reliability of the accounting data and financial statements
Which of the following types of audit evidence is the most persuasive?
Bank statements obtained from the client
Which of the following statements about accounting records and audit documentation is correct?
Accounting records belong to the client
Audit documents record the results of the auditor's evidence-gathering procedures. When preparing audit documents, the auditor should remember that
Audit documents should be designed to facilitate the review and supervision of work done by auditors assigned to the engagement
Audit documents that record the procedures used by the auditor to gather evidence should be
Designed in an orderly fashion to facilitate the review of audit work by the senior, manager, and partner on the engagement
In creating lead schedules of an audit engagement, what client information is needed to begin?
General ledger information, such as account numbers, prior-year account balances, and current year unadjusted information
May be in paper, electronic, or some other form
Based on conversation with the owner-manager of an audit client, the auditor ascertained that the company's primary motivation is to avoid praying income taxes. Based on this motivation, wh cub account balance assertion for ending inventory will the auditor be most concerned about verifying?
Your audit client is under intense pressure to meet an earnings target. Which transaction assertion for transactions within the purchasing process are you most concerned with?
You are concerned with unrecorded transactions in the purchasing cycle. Which audit procedure are you most likely to use when auditing purchases?
Tracing vendor invoices to accounting records
The following statements were made in a discussion of audit evidence between two CPAs. Which statement is not valid concerning audit evidence?
"I would not underside that procedure because at the best the results would only be persuasive and I'm looking for convincing evidence"
Which of the following statements concerning audit evidence is correct?
A client's accounting data cannot be considered sufficient audit evidence to support the financial statements
The permanent audit file usually includes:
The current audit file usually includes:
Working trial balance
All audit documentation should have a heading, which includes:
All of the above.
The audit working papers belong to the:
The audit firm.
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