51.The audit objective "that all footnotes have been included in the financial statements" is related most closely to which assertion?

Group of answer choices

Existence or occurrence

Rights and obligations

Completeness

Presentation and disclosure

52.Physical examination of assets is not a sufficient form of evidence when the auditor wants to determine the

Group of answer choices

existence of the asset.

condition or quality of the asset.

ownership of the asset.

quantity and description of the asset.

53.Which of the following is incorrect?

Group of answer choices

The completeness assertion deals with matters opposite from those of the existence/occurrence assertion.

The existence/occurrence assertion is concerned with inclusion of amounts that should not have been included.

The completeness assertion is concerned with the possibility of omitting items from the financial statements that should have been included.

It would be a violation of the completeness assertion if management would record a sale that did not take place.

54.As used in auditing, which of the following statements best describes "assertions"?

Group of answer choices

Assertions are the representations of management as to the fairness of presentation of the financial statements.

Assertions are the representations of management as to the reliability of the information system.

Assertions are the auditor's findings to be communicated in his audit report.

Assertions are found only in the notes to the financial statements.

55.Analytical procedures are

Group of answer choices

substantive tests designed to evaluate the reasonableness of financial information.

substantive tests designed to evaluate a system of internal control.

tests of controls designed to evaluate the reasonableness of financial information.

tests of controls designed to evaluate the validity of management's representation letter.

56.A difference of opinion concerning accounting and auditing matters relative to a particular phase of the audit arises between an assistant auditor who is and the senior auditor responsible for the engagement. After appropriate consultation, the assistant auditor asks to be disassociated from the resolution of the matter. The working papers would probably be

Group of answer choices

expanded to document the assistant auditor's position and the manner in which the difference of opinion was resolved.

expanded to document that the assistant auditor is completely disassociated from responsibility for the auditor's opinion.

expanded to document the additional work required because all disagreements of this type will require further substantive testing.

silent on the matter because it is an internal matter for the auditing firm.

57.The primary purpose of the auditor's working papers is to

Group of answer choices

serve as a means with which to prepare the financial statements.

comply with the auditing standards of the profession.

provide evidence of planning and execution of audit procedures performed.

document the deficiencies in internal control with recommendations to management for improvement.

58.Which of the following characteristics is most important in assuring the achievement of the primary purpose of working papers?

Group of answer choices

Working papers must be arranged in logical order following the audit program sequence.

Working papers must be properly indexed and cross-referenced to the draft of audit report.

Working papers must provide sufficient, competent, and useful information to support the audit report.

Working papers must be of standard format and standard content.

59.Which of the following statements is incorrect about audit evidence?

Group of answer choices

External evidence, such as communications from banks, is generally regarded as more reliable than the information obtained from the client.

Evidence obtained from an independent source outside the client organization is more reliable than that obtained from within.

Documents that originate outside the company are considered more reliable than those that originate within the client's organization.

Documentary evidence is more reliable when it is received by the auditor directly from an independent third party.

60.Although the validity of evidential matter is dependent on the circumstances under which it is obtained, there are three general presumptions that have some usefulness. The situations given below indicate the relative reliability that a CPA has placed on two types of evidence obtained in different situations. Which of these is an exception to one of the general presumptions?

Group of answer choices

The CPA places more reliance on the balance in the scrap sales account at Plant A, where the CPA has made limited tests of transactions because of effective controls, than at Plant B, where the CPA has made extensive tests of transactions because of ineffective controls.

The CPA places more reliance on the report of an expert on an inventory of precious gems than on the CPA's physical observation of the gems.

The CPA places more reliance on a schedule of insurance coverage obtained from the company's insurance agent than on one prepared by the internal audit staff.

The CPA places more reliance on the CPAs computation of interest payable on outstanding bonds than on the amount confirmed by the trustee.