Auditing Theory Exam 2

General Rule: Read the question carefully and answer it wisely. (5 points)

1. In assessing the technical competence of an internal auditor, an external auditor most likely would obtain information
about the…
A. Quality of working paper documentation, reports, and recommendations.
B. Organizational level to which the internal auditor reports
c. Influence of management on the internal auditor's duties.
D. Entity's commitment to integrity and ethical values.

2. Which of the following statements is correct concerning the auditor's use of the work of an expert?
A. The auditor is required to perform substantive test procedures to verify the expert's assumptions and findings.
B. The auditor should obtain an understanding of the methods and assumptions used by the expert.
C. The entity should not have an understanding of the nature of the work to be performed by the expert.
D. The expert should not have an understanding of-the auditor's corroborative use of the expert's findings.

3. Related party transactions may be indicated when another entity has had a distributor relationship with the company for
10 years.
A. False
B. True
C. Depends
D. I don’t know

4. Comparison of recorded amounts of major disbursements with appropriate invoices a typical analytical procedure.
A. False
B. True
C. Depends
D. I don’t know

5. Analytical procedures are seldo1 n used for planning an audit enyagement because they are substantive test procedures.
A. False
B. True
C. Depends
D. I don’t know