13 ?Which of the following types of audit evidence is the most reliable Directly observable evidence a Facsimiles of documents b Evidence from a poorly controlled system.c Evidence from the client's organization.d 14 According to professional audit standards, how might auditors gain an understanding of the nature of fraud that may occur in the ?client organization Circulating a survey to the client company employees for completion a Conducting a brainstorming session with the members of the audit team b Fraud training courses from actual corporate fraud ex-criminals.c Discussions with other audit firms d 15 1 1 1 7 ?Which one of the following would be considered the most reliable type of audit evidence Purchase orders from vendors a O Computerized general ledger b Confirmations from banks.cO Customer accounts receivable files d O 8 Which of the following is a method of reducing nonsampling risk Proper supervision and instruction of the audit team a Proper supervision and instruction of the client's employees.b O The use of attributes sampling rather than variables sampling co Controls to ensure that the sample drawn is random and representative.d 1 17 ?To be considered reliable evidence, confirmations must be controlled by which of the following parties A client employee responsible for accounts receivable a O An external auditor b O A client's controller or CFO C A client's internal audit department d 18 ?An example of an external document would include which of the following Vendor invoices a O All the above bO Customer orders.c Confirmation replies from customers d 1 1 19 Which of the following is a disadvantage of MUS sampling It is not designed to test for understatement a It directly controls for the risk of incorrect acceptance b Sample selection is relatively easy c Sample sizes are relatively small d 20 Reprocessing of transactions helps establish that all valid items have been recorded. Reprocessing tests which of the following Passertions Occurrence a Rights b Existence.c Completeness d 1 1 21 Monetary unit sampling (MUS) results in an efficient sample size and concentrates on the dollar value of the account balances 22 Tracing is a process that helps establish that recorded transactions are valid 20 Asset misappropriations are the primary fraud scheme in small businesses, and the perpetrators are usually the owners 1 1 1 21 Monetary unit sampling (MUS) results in an efficient sample size and concentrates on the dollar value of the account balances 22 Tracing is a process that helps establish that recorded transactions are valid 20 Asset misappropriations are the primary fraud scheme in small businesses, and the perpetrators are usually the owners 1 1 1 Asset misappropriations are the primary fraud scheme in small businesses, and the perpetrators are usually the owners 24 The client's verbal evidence is more reliable than evidence from independent outside sources 25 Fraud detection procedures should only be performed for clients that have had fraud problems in the past " " " " . 1 1