1. Which of the following experts would be more objective? a. expert is a past employee of the company b. expert who owes money to the client c. expert is related to the chief financial officer of the client d. expert is completely independent of the client

2. Invoices, bank statements, and minutes of meetings are all examples of a. documentary evidence. b. computational evidence. c. physical evidence. d. verbal evidence.

3. Which of the following would provide evidence using the evidence-gathering technique of recalculation? a. checking the mathematical accuracy of the depreciation expense b. estimating the rent revenue by multiplying the number of rooms by the average rent charged c. watching the inventory count performed by the client d. speaking to the accounting manager about why expenses increased

4. Which of the following describes how the auditor tests for cut-off? a. auditor searches for evidence that transactions have been recorded at appropriate amounts b. auditor searches for evidence that transactions have been recorded in the correct accounting period c. auditor searches for evidence to verify that a recorded transaction took place and relates to the entity d. auditor searches for transactions and makes sure these have been recorded

5. What is the required record-keeping period for the auditor's working papers? a. 1 year b. 6 months c. 5 years d. 10 years

6. Which of the following is NOT an example of externally generated evidence sent directly to the auditor? a. supplier invoices b. bank confirmations c. responses to legal letters d. payable confirmations

7. The auditor's decision as to what constitutes sufficient appropriate audit evidence is a matter of professional judgment. Which of the following is NOT part of this decision? a. their understanding of the client b. the significant risks identified c. the evidence gathered when executing the audit d. management's opinion

8. Which of the following describes how the auditor tests for the rights and obligations of assets? a. auditor searches for evidence to verify that assets are owned by the entity b. auditor searches for evidence to verify that assets have been recorded at appropriate amounts and allocated to correct general ledger accounts c. auditor searches for assets and ensures that they have been recorded d. auditor searches for evidence to verify that assets included in the account balances which appear in the financial statements are real

9. When an auditor searches for evidence to verify that a recorded transaction or event took place and relates to the entity, the auditor is testing for a. occurrence. b. completeness. c. accuracy. d. classification.

10. Which of the following does NOT describe sufficient appropriate audit evidence? a. the quality of evidence affects the quantity required b. the sufficiency of the evidence is a matter of professional skepticism c. sufficiency relates to the quantity of evidence d. appropriateness relates to the quality of evidence

11. Which of the following is NOT a reason that auditors ensure they understand an entity's internal controls? a. influences the audit strategy b. provides evidence of inherent risks c. required by auditing standards d. component of the overall audit risk assessment

12. An observed condition that provides evidence that the control being tested did not operate as intended is known as a(n) a. control exception. b. compensating control. c. control strength. d. invalid control.

13. A sequencing test is performed on the payroll information to ensure all employee numbers have been accounted for. What type of control is this? a. processing control b. output control c. input control d. logical access control

14. Transactions need to be classified appropriately. This internal control objective relates to all of the following assertions EXCEPT for a. completeness. b. allocation. c. valuation. d. accuracy.

15. Which of the following would NOT be used by the auditor when determining which internal control deficiencies should be communicated to management? a. professional judgement b. determination of the significance of the weakness c. consultation with other audit team members d. professional skepticism

16. The risk that an auditor expresses an inappropriate audit opinion when the financial statements are materially misstated is defined as a. audit risk. b. detection risk. c. inherent risk. d. business risk.

17. Which of the following accurately describes a checklist or preformatted questionnaire? a. systematically identifies the most common types of internal control procedures that should be present b. highlights key activities from initiation to reporting as well as describing what happens in the flow of transactions c. involves the auditor describing in words each step of the flow of transaction from start to finish d. involves the auditor summarizing in boxes each step of the flow of transaction from start to finish

18. Which of the following accurately describes the narrative form of documentation? a. highlights key activities from initiation to reporting as well as describing what happens in the flow of transactions b. involves the auditor describing in words each step of the flow of transaction from start to finish c. systematically identifies the most common types of internal control procedures that should be present d. involves the auditor summarizing in boxes each step of the flow of transaction from start to finish

19. After controls have been tested, the auditor's next step is to a. form an audit opinion. b. document the work. c. create an audit plan. d. perform substantive testing.

20. Which of the following is NOT specifically addressed by internal control objectives? a. timing of revenue recognition entries b. disclosure in the statements c. recording of cash receipts d. amount of inventory recorded