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Chapter 4 Audit Evidence and Audit Programs
Chapter 4 Audit Evidence and Audit Programs
ANSWER: D
ANSWER: B
ANSWER: C
37 Chapter 4 Audit Evidence and Audit Programs
ANSWER: C
ANSWER: A
ANSWER: C
Chapter 4 Audit Evidence and Audit Programs 38
ANSWER: D
ANSWER: D
ANSWER: C
ANSWER: A
ANSWER: D
ANSWER: C
ANSWER: D
ANSWER: B
ANSWER: B
ANSWER: A
ANSWER: D
ANSWER: D
ANSWER: C
ANSWER: A
21. The in-charge auditor decides that work papers are complete
a. When satisfied that the audit objectives have been met
and the working papers support the conclusions.
b. When working papers make reference to the steps
outlined in the audit program.
c. Only after the auditor who prepared the working papers
has signed and dated them.
d. When proper cross-references to other working papers
are noted.
ANSWER: A
ANSWER: C
ANSWER: C
ANSWER: C
ANSWER: D
ANSWER: C
43 Chapter 4 Audit Evidence and Audit Programs
ANSWER: C
ANSWER: D
29. Audit working papers are used to record the results of the
auditor's evidence-gathering procedures. When preparing
working papers, the auditor should remember that working
papers should be
a. Kept on the client's premises so that the client can
have access to them for reference purposes.
b. The primary support for the financial statements
being examined.
c. Considered as a part of the client's accounting records
that are retained by the auditor.
d. Designed to meet the circumstances and the auditor's
needs on each engagement.
ANSWER: D
Chapter 4 Audit Evidence and Audit Programs 44
ANSWER: B
ANSWER: C
ANSWER: C
ANSWER: A
45 Chapter 4 Audit Evidence and Audit Programs
ANSWER: B
ANSWER: B
ANSWER: D
ANSWER: D
Chapter 4 Audit Evidence and Audit Programs 46
ANSWER: D
ANSWER: A
ANSWER: B
ANSWER: B
ANSWER: D
ANSWER: A
ANSWER: A
ANSWER: B
ANSWER: B
ANSWER: D
ANSWER: A
ANSWER: D
ANSWER: B
ANSWER: A
ANSWER: D
ANSWER: D
ANSWER: D
ANSWER: B
COMPLETION:
56. Audit programs can be developed only after the auditor has
completed the audit _______________ process.
ANSWER: PLANNING
ANSWER: SUFFICIENCY
ANSWER: PHYSICAL
ANSWER: DOCUMENTED
ANSWER: COMPLETENESS
ANSWER: MATHEMATICAL
MATCHING:
a. Physical evidence
b. Confirmation evidence
c. Documentary evidence
d. Analytical evidence
e. Mathematical evidence
f. Hearsay evidence
Chapter 4 Audit Evidence and Audit Programs 52
SOLUTION:
1. e
2. c
3. a
4. d
5. d
6. b
7. f
8. e
9. b
10. a
11. d
a. Existence or occurrence
b. Completeness
c. Rights and obligations
d. Valuation or allocation
e. Presentation and disclosure
SOLUTION:
1. a,d
2. d
3. e
Chapter 4 Audit Evidence and Audit Programs 54
4. b
5. b,c
6. a,c,d
7. d
8. e
9. a
10. b
PROBLEM/ESSAY
1. Cash in bank
2. Sales revenue
3. Inventories
4. Accounts payable
5. Notes payable
6. Capital stock
7. Marketable securities
8. Operating expenses
9. Wages and salaries expense
10. Property, plant, and equipment
SOLUTION:
Required:
55 Chapter 4 Audit Evidence and Audit Programs
SOLUTION:
a. Sufficient audit evidence is evidence that is adequate
to support the auditor’s opinion on the financial statements. A
matter of audit judgment, sufficiency is usually based on
materiality and the adequacy of existing internal control.
b. Validity of audit evidence is a function of three
qualities:
1) The independence and competence of the source of
the evidence (e.g., external evidence possesses
greater validity than internal evidence);
2) The conditions under which the evidence was
obtained (e.g., evidence produced by strong
internal control possesses greater validity
than evidence gathered under weak internal
control); and
3) The manner in which the evidence was obtained
(e.g., evidence obtained directly by the auditor
possesses greater validity than evidence obtained
indirectly).
Relevance means that the evidence pertains to specific audit
objectives. Observing the taking of the inventory, for example,
provides evidence concerning existence of the inventory, but is
not relevant to determining ownership.
Required:
Chapter 4 Audit Evidence and Audit Programs 56
SOLUTION:
a.
71. The following financial data have been extracted from the
records of Blackwell Wholesale Tires:
2003 2002
Required:
SOLUTION:
2003 2002
TRAMWAY ENTERPRISES
Bank Reconciliation
12/31/2003
=====
Balance per ledger $6,300
Adjustment to correct (706)
Adjusted balance as above $5,594
======
SOLUTION: