6. The auditor is considering the use of the clients internal auditors to assist in the audit. As a result, the auditor is evaluating the competence and objectivity of the internal auditors. Factors the auditor will consider when evaluating an internal auditors competence will include the following except:

A. The organizational level to which the internal auditor reports.

B. The internal auditors education.

C. The internal auditors professional certifications.

D. The internal auditors experience.

7. What is the most likely opportunity for theft or fraud by employees?

A. Stock options that expire soon after the release of financial statements.

B. The belief that the theft is a common practice.

C. Needlessly complex transactions.

D. Access to assets that are easily traced.

8. Which of the following items would be the least persuasive type of audit evidence?

A. A confirmation of bank balances as of year-end received by the auditor directly from the bank.

B. A schedule comparing an estimate of interest expense, prepared by the auditor, to the amount reported on the clients trial balance.

C. A copy of a bank statement provided to the auditor by the client.

D. A letter of representation signed by the clients president and chief executive officer.

9. Which of the following statements is generally correct about the appropriateness of audit evidence?

A. Appropriateness of audit evidence refers to the amount of corroborative evidence obtained.

B. The more effective the internal control, the more assurance it provides about the reliability of the accounting data and financial statements.

C. Information obtained indirectly from independent outside sources is more persuasive than the auditor's direct personal knowledge obtained through observation and inspection.

D. Appropriateness of audit evidence refers only to audit evidence obtained from outside the entity.