An abnormal fluctuation in gross profit that might suggest the need for extended audit procedures for sales and inventories would most likely be identified in the planning phase of the audit by the use of

A.

specialized audit programs.

B.

tests of details of balances.

C.

analytical procedures.

D.

procedures to obtain an understanding of internal controls.

A common comparison occurs when the auditor calculates the expected balance and compares it with the actual balance. Theauditor's expected account balance may be determined by

A.

using credit bureau reports.

B.

using industry standards.

C.

inquiring with the client.

D.

relating it to some other balance sheet or income statement account or accounts

During final review of working papers and financialstatements, possible oversights in the audit can be identified by

A.

conducting a closing interview with management of the client.

B.

thepartner's knowledge of theclient's business combined with effective analytical procedures.

C.

reviewing the minutes from the board meetings.

D.

conducting a meeting with the audit team.

The audit working papers serve as a record of the evidence accumulated and the results of the audit tests. This helps to demonstrate that the audit was

A.

completed using Canadian generally accepted accounting principles.

B.

conducted in accordance with Canadian generally accepted auditing standards.

C.

organized effectively with no mistakes in calculations.

D.

kept properlyconfidential; information was held secure.

The working papers are

A.

the primary means of documenting that an adequate audit was conducted in accordance with GAAS.

B.

prepared by theclient's internal auditors.

C.

used primarily as a basis for the partners to review and reward the work of themanagers, seniors, and staff.

D.

the property of the client.

Each working paper should include enough information to fulfill the objectives for which it was designed. Forexample, if a working paper is designed to list the detail and show the verification of support of a balance sheet account such as prepaidinsurance, it is essential that the detail on the working paper

A.

reconcile the change in costs from last year to this year.

B.

use analytical review to consider the reasonableness of the account.

C.

use observation to identify controls in place over the transactions.

D.

reconcile with the associated general ledger account.

With the use of electronic workingpapers, each team member should have a unique access identification code and a password to access the working papers. Once a working paper iscompleted, what type of access should the staff auditor who prepared the working paper filehave?

A.

read only

B.

edit capability

C.

update for current information

D.

change based upon review