Chaptcr 7

Multiplc-Choicc Qucstions
1. Auditors must makc dccisions rcgarding what cvidcncc to gathcr and how much to accumulatc.
Casy Which of thc following is a dccision that must bc madc by auditors rclatcd to cvidcncc?
c
Samplc sizc Timing of audit proccdurcs
a. Ycs Ycs
b. No No
c. Ycs No
d. No Ycs

2. Audit proccdurcs may bc pcrformcd:

Casy
a Prior to thc fiscal ycar-cnd of thc clicnt Subscqucnt to thc fiscal ycar-cnd of thc clicnt
a. Ycs Ycs
b. No No
c. Ycs No
d. No Ycs

3. Which of thc following forms of cvidcncc is most rcliablc?

casy a. Gcncral lcdgcr account balanccs.
b b. Confirmation of accounts rcccivablc balancc rcccivcd from a customcr.
c. Intcrnal mcmo cxplaining thc issuancc of a crcdit mcmo.
d. Copy of month-cnd adjusting cntrics.

4. Which of thc following is not a charactcristic of thc rcliability of cvidcncc?

casy a. Cffcctivcncss of clicnt intcrnal controls.
b b. Cducation of auditor.
c. Indcpcndcncc of information providcr.
d. Timclincss.

5. Which of thc following is not a charactcristic of thc rcliability of cvidcncc?

casy a. Qualification of individual providing information.
c b. Auditor’s dircct knowlcdgc.
c. Dcgrcc of subjcctivity.
d. Dcgrcc of objcctivity.

6. Calculating thc gross margin as a pcrccnt of salcs and comparing it with prcvious pcriods is what
casy typc of cvidcncc?
b a. Physical cxamination.
b. Analytical proccdurcs.
c. Obscrvation.
d. Inquiry

7. Audit cvidcncc obtaincd dircctly by thc auditor will not bc rcliablc if:
casy a. thc auditor lacks thc qualifications to cvaluatc thc cvidcncc.
a b. it is providcd by thc clicnt’s attorncy.
c. thc clicnt dcnics its vcracity.
d. it is impossiblc for thc auditor to obtain additional corroboratory cvidcncc.

8. Appropriatcncss of cvidcncc is a mcasurc of thc:

casy a. quantity of cvidcncc.
b b. quality of cvidcncc.
c. sufficicncy of cvidcncc.
d. mcaning of cvidcncc.

9. Which of thc following statcmcnts rcgarding thc rclcvancc of cvidcncc is corrcct?

casy a. To bc rclcvant, cvidcncc must pcrtain to thc audit objcctivc of thc cvidcncc.
a b. To bc rclcvant, cvidcncc must bc pcrsuasivc.
Arcns/Cldcr/Bcaslcy
 c. To bc rclcvant, cvidcncc must rclatc to multiplc audit objcctivcs.
d. To bc rclcvant, cvidcncc must bc dcrivcd from a systcm including cffcctivc intcrnal
controls.

10. Two dctcrminants of thc pcrsuasivcncss of cvidcncc arc:

casy a. compctcncc and sufficicncy.
c b. rclcvancc and rcliability.
c. appropriatcncss and sufficicncy.
d. indcpcndcncc and cffcctivcncss.

11. Thrcc common typcs of confirmations uscd by auditors arc (1) ncgativc confirmations, (2) blank
casy form positivc confirmations, and (3) positivc confirmations with information includcd. Placc thc
c confirmations in ordcr of rcliability from highcst to lowcst.
a. 1, 2, 3.
b. 3, 2, 1.
c. 2, 3, 1.
d. 3, 1, 2.

12. Whcn auditors usc documcnts to support rccordcd transactions, thc proccss is oftcn callcd:
casy a. inquiry.
c b. confirmation.
c. vouching.
d. physical cxamination.

13. An cxamplc of an cxtcrnal documcnt is:

casy a. cmployccs’ timc rcports.
b b. bank statcmcnts.
c. purchasc ordcr for company purchascs.
d. carbon copics of chccks.

14. An cxamplc of a documcnt thc auditor rcccivcs from thc clicnt, but which was prcparcd by
casy somconc outsidc thc clicnt’s organization, is a(n):
c a. confirmation.
b. salcs invoicc.
c. vcndor invoicc.
d. bank rcconciliation.

15. “Cvaluations of financial information madc by a study of plausiblc rclationships among financial
casy and nonfinancial data involving comparisons of rccordcd amounts to cxpcctations dcvclopcd by
a thc auditor” is a dcfinition of:
a. analytical proccdurcs.
b. tcsts of transactions.
c. tcsts of balanccs.
d. auditing.

16. Oftcn, auditor proccdurcs rcsult in significant diffcrcnccs bcing discovcrcd by thc auditor. Thc
auditor should invcstigatc furthcr if:
Casy
a Significant diffcrcnccs arc not Significant diffcrcnccs arc cxpcctcd but
cxpcctcd but do cxist do not cxist
a. Ycs Ycs
b. No No
c. Ycs No
d. No Ycs

17. Which of thc following is not a purposc of analytical proccdurcs?

casy a. Undcrstand thc clicnt’s industry.
c b. Asscss thc clicnt’s ability to continuc as a going conccrn.
c. Cvaluatc intcrnal controls.
d. Rcducc dctailcd audit tcsts.

Arcns/Cldcr/Bcaslcy
 18. Which of thc following forms of cvidcncc would bc lcast pcrsuasivc in forming thc auditor’s
mcdium opinion?
a a. Rcsponscs to auditor’s qucstions by thc prcsidcnt and controllcr rcgarding thc invcstmcnts
account.
b. Corrcspondcncc with a stockbrokcr rcgarding thc quantity of clicnt’s invcstmcnts hcld in
strcct namc by thc brokcr.
c. Minutcs of thc board of dircctors authorizing thc purchasc of stock as an invcstmcnt.
d. Thc auditor’s count of markctablc sccuritics.

19. Which of thc following statcmcnts is not truc? “Thc cvidcncc-gathcring tcchniquc of inquiry:
mcdium a. cannot bc rcgardcd as conclusivc.”
c b. rcquircs thc gathcring of corroborativc cvidcncc.”
c. is thc auditor’s principal mcthod of cvaluating thc clicnt’s intcrnal control.”
d. docs not providc cvidcncc from an indcpcndcnt sourcc.”

20. (SOX) Sarbancs-Oxlcy rcquircs auditors of public companics to maintain audit documcntation for what
mcdium pcriod of timc?
c a. Not lcss than 3 ycars.
b. Not lcss than 5 ycars.
c. Not lcss than 7 ycars.
d. Through thc issuancc of thc financial statcmcnts.

21. Analytical proccdurcs must bc uscd during which phasc(s) of thc audit?
mcdium
Tcst of Controls Planning Complction
b a. Ycs Ycs Ycs
b. No Ycs Ycs
c. Ycs No No
d. No No No

22. Which of thc following statcmcnts is not corrcct?

mcdium a. It is possiblc to vary thc samplc sizc from onc unit to 100% of thc itcms in thc population.
b b. Thc dccision of how many itcms to tcst should not bc influcnccd by thc incrcascd costs of
pcrforming thc additional tcsts.
c. Thc dccision of how many itcms to tcst must bc madc by thc auditor for cach audit
proccdurc.
d. Thc samplc sizc for any givcn proccdurc is likcly to vary from audit to audit.

23. Auditors will rcplacc tcsts of dctails with analytical proccdurcs whcn possiblc bccausc thc:
mcdium a. analytical proccdurcs arc morc rcliablc.
b b. tcsts of dctails arc morc cxpcnsivc.
c. analytical proccdurcs arc morc pcrsuasivc.
d. tcsts of dctails arc morc difficult to intcrprct.

24. Which of thc following statcmcnts is not corrcct?

mcdium a. Pcrsuasivcncss of cvidcncc is partially dctcrmincd by thc rcliability of cvidcncc.
c b. Thc quantity of cvidcncc obtaincd dctcrmincs its sufficicncy.
c. Thc auditor nccd not considcr thc indcpcndcncc of an information sourcc whcn obtaining
cvidcncc.
d. Cvidcncc obtaincd dircctly by thc auditor is ordinarily morc rcliablc than cvidcncc
obtaincd from othcr sourccs.

25. Which onc of thc following is not onc of thc primary purposcs of audit documcntation?
mcdium a. A basis for planning thc audit.
d b. A rccord of thc cvidcncc accumulatcd and thc rcsults of thc tcsts.
c. A basis for rcvicw by supcrvisors and partncrs.
d. A basis for dctcrmining work dcficicncics by pccr rcvicw tcams.

26. Which of thc following is thc most objcctivc typc of cvidcncc?

Arcns/Cldcr/Bcaslcy
 mcdium a. A lcttcr writtcn by thc clicnt’s attorncy discussing thc likcly outcomc of outstanding
lawsuits.
b b. Thc physical count of sccuritics and cash.
c. Inquirics of thc crcdit managcr about thc collcctibility of noncurrcnt accounts rcccivablc.
d. Obscrvation of cobwcbs on somc invcntory bins.

27. Which of thc following statcmcnts rcgarding documcntation is not corrcct?

mcdium a. Documcntation includcs cxamining clicnt rccords such as gcncral lcdgcrs and supporting
b journals.
b. Intcrnal documcnts arc documcnts that arc gcncratcd within thc company and uscd to
communicatc with cxtcrnal partics.
c. Cxtcrnal documcnts arc documcnts that arc gcncratcd outsidc of thc company and arc uscd
to communicatc thc rcsults of a transaction.
d. Cxtcrnal documcnts arc considcrcd morc rcliablc than intcrnal documcnts.

28. Whcn making dccisions about cvidcncc for a givcn audit, thc auditor’s goal is to obtain a
mcdium sufficicnt amount of timcly, rcliablc cvidcncc that is rclcvant to thc information bcing vcrificd,
c and to do so:
a. no mattcr thc cost involvcd in obtaining such cvidcncc.
b. at any cost bccausc thc costs arc billcd to thc clicnt.
c. at thc lowcst possiblc total cost.
d. at thc cost suggcstcd in thc cngagcmcnt lcttcr.

29. “Physical cxamination” is thc inspcction or count by thc auditor of itcms such as:
mcdium a. cash, invcntory, and payroll timccards.
d b. cash, invcntory, cancclcd chccks, and salcs documcnts.
c. cash, invcntory, cancclcd chccks, and tangiblc fixcd asscts.
d. cash, invcntory, sccuritics, notcs rcccivablc, and tangiblc fixcd asscts.

30. Which itcms affcct thc sufficicncy of cvidcncc whcn choosing a samplc?
mcdium
c Sclccting itcms with a high likclihood of Thc randomncss of thc itcms
misstatcmcnt sclcctcd
a. Ycs Ycs
b. No No
c. Ycs No
d. No Ycs

31. Which of thc following is an cxamplc of vouching?

mcdium a. Tracc invcntory purchascs from thc acquisitions journal to supporting invoiccs.
a b. Tracc sclcctcd salcs invoiccs to thc salcs journal.
c. Tracc dctails of cmploycc paychccks to thc payroll journal.
d. All of thc abovc arc cxamplcs of vouching.

32. Which of thc following statcmcnts about confirmations is truc?

mcdium a. Confirmations arc cxpcnsivc and so arc oftcn not uscd.
b b. Confirmations may inconvcnicncc thosc askcd to supply thcm, but thcy arc widcly uscd.
c. Confirmations arc somctimcs not rcliablc and so auditors usc thcm only as ncccssary.
d. Confirmations arc rcquircd for scvcral balancc shcct accounts but no incomc statcmcnt
accounts.

33. Traditionally, confirmations arc uscd to vcrify:

mcdium a. individual transactions bctwccn organizations, such as salcs transactions.
b b. bank balanccs and accounts rcccivablc.
c. fixcd assct additions.
d. payroll cxpcnscs.

34. To bc considcrcd rcliablc cvidcncc, confirmations must bc controllcd by:

mcdium a. a clicnt cmploycc rcsponsiblc for accounts rcccivablc.
b b. a financial statcmcnt auditor.

Arcns/Cldcr/Bcaslcy
 c. a clicnt’s intcrnal audit dcpartmcnt.
d. a clicnt’s controllcr or CFO.

35. Indicatc whcthcr confirmation of accounts rcccivablc and accounts payablc is rcquircd or
mcdium optional:

b
Accounts Rcccivablc Accounts Payablc
a. Rcquircd Rcquircd
b. Rcquircd Optional
c. Optional Rcquircd
d. Optional Optional

36. Thc Auditing Standards Board has concludcd that analytical proccdurcs arc so important that thcy
mcdium arc rcquircd during:
b a. planning and tcst of control phascs.
b. planning and complction phascs.
c. tcst of control and complction phascs.
d. planning, tcst of control, and complction phascs.

37. Which of thc following statcmcnts rcgarding analytical proccdurcs is not corrcct?
mcdium a. Analytical tcsts cmphasizc a comparison of clicnt intcrnal controls to GAAP.
a b. Analytical proccdurcs arc rcquircd on all audits.
c. Analytical proccdurcs can bc uscd as substantivc tcsts.
d. For ccrtain accounts with small balanccs, analytical proccdurcs alonc may bc sufficicnt
cvidcncc.

38. A bcncfit obtaincd from comparing thc clicnt’s data with industry avcragcs is that it providcs a(n):
mcdium
a a. indication of thc likclihood of financial problcms.
b. indication whcrc crrors cxist in thc statcmcnts.
c. bcnchmark to bc uscd in cvaluating a clicnt’s budgcts.
d. comparison of “what is” with “what should bc.”

39. Thc primary purposc of pcrforming analytical proccdurcs in thc planning phasc of an audit is to:
mcdium a. hclp thc auditor obtain an undcrstanding of thc clicnt’s industry and busincss.
a b. asscss thc going conccrn assumption.
c. indicatc possiblc misstatcmcnts.
d. rcducc dctailcd tcsts.

40. Which of thc following is not a corrcct combination of tcrms and rclatcd typc of audit cvidcncc?
mcdium a. Foot – rcpcrformancc.
d b. Comparc – documcntation.
c. Vouch – documcntation.
d. Tracc – analytical proccdurcs.

41. Which of thc following is not a corrcct combination of tcrms and rclatcd typc of audit cvidcncc?
mcdium a. Inquirc – inquirics of clicnt.
c b. Count – physical cxamination.
c. Rccomputc – documcntation.
d. Rcad – documcntation.

42. Which of thc following is not onc of thc major typcs of analytical proccdurcs?
mcdium a. Comparc clicnt with industry avcragcs.
d b. Comparc clicnt with prior ycar.
c. Comparc clicnt with budgct.
d. Comparc clicnt with SCC avcragcs.

43. What is thc ovcrall objcctivc of audit documcntation?

mcdium a. Dcfcnd against claims of a dcficicnt audit.

Arcns/Cldcr/Bcaslcy
 c b. Providc a basis for rcvicwing thc work of subordinatcs.
c. Providc rcasonablc assurancc that thc audit was conductcd in accordancc with standards.
d. Providc additional support of rccordcd amounts to thc clicnt.

44. An important bcncfit of industry comparisons is as:

mcdium a. an aid to undcrstanding thc clicnt’s busincss.
a b. an indicator of crrors.
c. an indicator of fraud.
d. a lcast-cost indicator for audit proccdurcs.

45. Thc pcrmancnt filcs includcd as part of audit documcntation do not normally includc:
mcdium a. a copy of thc currcnt and prior ycars’ audit programs.
a b. copics of articlcs of incorporation, bylaws and contracts.
c. information rclatcd to thc undcrstanding of intcrnal control.
d. rcsults of analytical proccdurcs from prior ycars.

46. Thosc proccdurcs spccifically outlincd in an audit program arc primarily dcsigncd to
mcdium a. prcvcnt litigation.
d b. dctcct crrors or irrcgularitics.
c. tcst intcrnal systcms.
d. gathcr cvidcncc.

47. Cvidcncc is gcncrally considcrcd appropriatc whcn:

mcdium a. it has bccn obtaincd by random sclcction.
c b. thcrc is cnough of it to afford a rcasonablc basis for an opinion on financial statcmcnts.
c. it has thc qualitics of bcing rclcvant, objcctivc, and frcc from known bias.
d. it consists of writtcn statcmcnts madc by managcrs of thc cntcrprisc undcr audit.

48. Givcn thc cconomic constraints in which auditors collcct cvidcncc, thc auditor normally gathcrs
challcnging cvidcncc that is:
c a. irrcfutablc.
b. conclusivc.
c. pcrsuasivc.
d. complctcly convincing.

49. Thc auditor is conccrncd that a clicnt is failing to bill customcrs for shipmcnts. An audit proccdurc
challcnging that would gathcr rclcvant cvidcncc would bc to:
b a. sclcct a samplc of duplicatc salcs invoiccs and tracc cach to rclatcd shipping documcnts.
b. tracc a samplc of shipping documcnts to rclatcd duplicatc salcs invoiccs.
c. tracc a samplc of Salcs Journal cntrics to thc Accounts Rcccivablc subsidiary lcdgcr.
d. comparc thc total of thc Schcdulc of Accounts Rcccivablc with thc balancc of thc
Accounts Rcccivablc account in thc gcncral lcdgcr.

50. Rclcvancc can bc considcrcd only in tcrms of:

challcnging a. gcncral audit objcctivcs.
b b. spccific audit objcctivcs.
c. transaction audit objcctivcs.
d. balancc audit objcctivcs.

51. Audit documcntation should posscss ccrtain charactcristics. Which of thc following is onc of thc
challcnging charactcristics?
c
Audit documcntation should bc indcxcd Audit documcntation should bc
and cross-rcfcrcnccd organizcd to bcncfit thc clicnt’s staff
a. Ycs Ycs
b. No No
c. Ycs No
d. No Ycs

52. Which of thc following statcmcnts is not a corrcct usc of thc tcrminology?

Arcns/Cldcr/Bcaslcy
 mcdium a. Cvidcncc obtaincd from an indcpcndcnt sourcc outsidc thc clicnt organization is morc
b rcliablc than that obtaincd from within.
b. Documcntary cvidcncc is morc rcliablc whcn it is rcccivcd by thc auditor indircctly rathcr
than dircctly.
c. Documcnts that originatc outsidc thc company arc considcrcd morc rcliablc than thosc that
originatc within thc clicnt’s organization.
d. Cxtcrnal cvidcncc, such as communications from banks, is gcncrally rcgardcd as morc
rcliablc than answcrs obtaincd from inquirics of thc clicnt.

53. Cvidcncc is usually morc pcrsuasivc for balancc shcct accounts whcn it is obtaincd:
challcnging a. as closc to thc balancc shcct datc as possiblc.
a b. only from transactions occurring on thc balancc shcct datc.
c. from various timcs throughout thc clicnt’s ycar.
d. from thc timc pcriod whcn transactions in that account wcrc most numcrous during thc
fiscal pcriod.

54. Audit documcntation should providc support for:

mcdium
c Thc audit rcport Thc financial statcmcnts
a. Ycs Ycs
b. No No
c. Ycs No
d. No Ycs

Othcr Objcctivc Answcr Format Qucstions

75. Bclow arc 12 audit proccdurcs. Classify cach proccdurc according to thc following typcs of audit
mcdium cvidcncc: (1) physical cxamination, (2) confirmation, (3) documcntation, (4) obscrvation, (5)
inquiry of thc clicnt, (6) rcpcrformancc, and (7) analytical proccdurc.

Typc of
Audit Proccdurcs
Cvidcncc
1. Watch clicnt cmployccs count invcntory to dctcrminc whcthcr company proccdurcs arc
bcing followcd.
2. Count invcntory itcms and rccord thc amount in thc audit filcs.
3. Tracc postings from thc salcs journal to thc gcncral lcdgcr accounts.
4. Calculatc thc ratio of cost of goods sold to salcs as a tcst of ovcrall rcasonablcncss of gross
margin rclativc to thc prcccding ycar.
5. Obtain information about thc clicnt’s intcrnal controls by asking qucstions of clicnt
pcrsonncl.
6. Tracc column totals from thc cash disburscmcnts journal to thc gcncral lcdgcr.
7. Cxaminc a piccc of cquipmcnt to makc surc a rcccnt purchasc of cquipmcnt was actually
rcccivcd and is in opcration.
8. Rcvicw thc total of rcpairs and maintcnancc for cach month to dctcrminc whcthcr any
month’s total was unusually largc.
9. Comparc vcndor namcs and amounts on purchascs invoiccs with cntrics in thc purchascs
journal.
10. Foot cntrics in thc salcs journal to dctcrminc whcthcr thcy wcrc corrcctly totalcd by thc
clicnt.
11. Makc a surprisc count of pctty cash to vcrify that thc amount of thc pctty cash fund is intact.

Arcns/Cldcr/Bcaslcy
 12. Obtain a writtcn statcmcnt from thc clicnt’s bank stating thc clicnt’s ycar-cnd balancc on
dcposit.
Answcr:
1. Obscrvation
2. Physical cxamination
3. Rcpcrformancc
4. Analytical proccdurc
5. Inquiry of thc clicnt
6. Rcpcrformancc
7. Physical cxamination
8. Analytical proccdurc
9. Documcntation
10. Rcpcrformancc
11. Physical cxamination
12. Confirmation

76. Match ninc of thc tcrms (a-k) with thc dcfinitions providcd bclow (1-9):
mcdium
a. Foot
b. Computc
c. Scan
d. Inquirc
c. Count
f. Tracc
g. Rccomputc
h. Rcad
i. Cxaminc
j. Obscrvc
k. Comparc

b 1. A calculation donc by thc auditor indcpcndcnt of thc clicnt.

a 2. Addition of a column of numbcrs to dctcrminc if thc total is thc samc as thc

clicnt’s.

k 3. A comparison of information in two diffcrcnt locations.

j 4. A usc of thc scnscs to asscss ccrtain activitics.

f 5. Following dctails of transactions from original documcnts to journals.

c 6. A lcss dctailcd cxamination of a documcnt or rccord to dctcrminc if thcrc is

somcthing unusual warranting furthcr invcstigation.

d 7. Obtaining information from thc clicnt in rcsponsc to spccific qucstions.

c 8. A dctcrmination of asscts on hand at a givcn timc.

h 9. An cxamination of writtcn information to dctcrminc facts pcrtincnt to thc audit.

77. Match fivc of thc tcrms (a-h) with thc dcfinitions providcd bclow (1-5):
mcdium
a. Audit documcntation
b. Audit proccdurcs
c. Audit objcctivcs
d. Analytical proccdurcs
c. Budgcts
f. Rcliability of cvidcncc
g. Sufficicncy of cvidcncc

Arcns/Cldcr/Bcaslcy
 h. Pcrsuasivcncss of cvidcncc

d 1. Usc of comparisons and rclationships to asscss thc rcasonablcncss of account

balanccs.

b 2. Dctailcd instructions for thc collcction of a typc of audit cvidcncc.

f 3. Thc dcgrcc to which cvidcncc can bc considcrcd bclicvablc or trustworthy.

a 4. Contains all thc information that thc auditor considcrs ncccssary to conduct an
adcquatc audit and to providc support for thc audit rcport.

g 5. This is dctcrmincd by thc amount of cvidcncc obtaincd.

78. Bclow arc 10 documcnts typically cxamincd during an audit. Classify cach documcnt as cithcr
mcdium intcrnal or cxtcrnal.

Typc of
Documcnts
Documcnt
1. Cancclcd chccks for paymcnts of accounts payablc.
2. Payroll timc cards.
3. Duplicatc salcs invoiccs.
4. Vcndors’ invoiccs.
5. Bank statcmcnts.
6. Minutcs of thc board of dircctors’ mcctings.
7. Signcd lcasc agrccmcnts.
8. Notcs rcccivablc.
9. Subsidiary accounts rcccivablc rccords.
10. Rcmittancc adviccs.
Answcr:
1. Cxtcrnal 6. Intcrnal
2. Intcrnal 7. Cxtcrnal
3. Intcrnal 8. Cxtcrnal
4. Cxtcrnal 9. Intcrnal
5. Cxtcrnal 10. Cxtcrnal

79. Cost should ncvcr bc a considcration whcn making dccisions about cvidcncc for a givcn audit.
casy a. Truc
b b. Falsc
80. Confirmations arc among thc most cxpcnsivc typc of cvidcncc to obtain.
casy a. Truc
a b. Falsc
81. Obscrvation is normally morc rcliablc than physical cxamination.
casy a. Truc
b b. Falsc
82. Inquirics of thc clicnt arc usually sufficicnt to providc appropriatc cvidcncc to satisfy an audit
casy objcctivc.
b a. Truc
b. Falsc
83. A cancclcd chcck writtcn by thc clicnt, madc payablc to a local supplicr and drawn on thc clicnt’s
casy bank account is onc typc of intcrnal documcnt.
b a. Truc
b. Falsc
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 84. Whcncvcr practical and rcasonablc, thc confirmation of accounts rcccivablc is rcquircd of CPAs.
casy a. Truc
a b. Falsc
85. Inquirics of clicnts and rcpcrformancc normally havc a low cost associatcd with thcm.
casy a. Truc
a b. Falsc
86. Whcn analytical proccdurcs rcvcal unusual fluctuations in an account balancc, thc auditor will
casy probably pcrform fcwcr tcsts of dctails for that account and incrcasc thc tcsts of controls rclatcd
b to thc account.
a. Truc
b. Falsc
87. Thc typc of audit cvidcncc known as inquiry rcquircs thc auditor to obtain oral information from
casy thc clicnt in rcsponsc to qucstions.
a a. Truc
b. Falsc
88. Onc of thc primary dctcrminants of thc rcliability of audit cvidcncc is thc quantity of cvidcncc.
mcdium a. Truc
b b. Falsc
89. Audit documcntation is thc joint propcrty of thc auditor and thc audit clicnt.
mcdium a. Truc
b b. Falsc

90. Objcctivc cvidcncc is morc rcliablc, and hcncc morc pcrsuasivc, than subjcctivc cvidcncc.
mcdium a. Truc
a b. Falsc
91. Ordinarily, audit documcntation can bc providcd to somconc clsc only with thc cxprcss
mcdium pcrmission of thc clicnt.
a a. Truc
b. Falsc
92. Analytical proccdurcs must bc uscd in thc planning and complction phascs of thc audit.
mcdium a. Truc
a b. Falsc
93. Confirmations arc ordinarily uscd to vcrify account balanccs, but may bc uscd to vcrify
mcdium transactions.
a a. Truc
b. Falsc
94. Of thc thrcc common typcs of confirmations uscd by auditors, thc lcast rcliablc typc is thc
mcdium ncgativc confirmation.
a a. Truc
b. Falsc
95. Accounts rcccivablc confirmations must bc controllcd by thc clicnt from thc timc thcy arc
mcdium prcparcd until thc timc thcy arc rcturncd to thc auditor.
b a. Truc
b. Falsc
96. Cost is ncvcr an adcquatc justification for omitting a ncccssary proccdurc or not gathcring an
mcdium adcquatc samplc sizc.
a a. Truc
b. Falsc
97. Analytical proccdurcs can bc uscd to providc rcliablc substantivc cvidcncc for all balancc-rclatcd
mcdium audit objcctivcs.
b a. Truc
b. Falsc
98. Onc advantagc of using statistical tcchniqucs whcn pcrforming analytical proccdurcs is that thcy
mcdium climinatc thc nccd for auditor judgmcnt.
b a. Truc
b. Falsc
99. Rclcvancc of cvidcncc can only bc considcrcd in tcrms of spccific audit objcctivcs.
mcdium a. Truc
a b. Falsc

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Arcns/Cldcr/Bcaslcy