Fundamental Auditing

Which of the following statements regarding using the work of another auditor is correct? The group engagement partner will spend more time reviewing the component auditor's work if the component auditor has a good reputation. The group engagement partner will spend less time reviewing the component auditor's work when the component is at risk of material misstatement. The component auditor sets out the work to be conducted by the group engagement partner. The group engagement partner will spend more time reviewing the component auditor's work when the component is at risk of material misstatement. Lily Lawson was reviewing ways of obtaining electronic evidence at the firm's client. Which of the following would be considered electronic evidence collected by Lily? invoices used for inspection selected from a filing cabinet files sent via email to the auditor computational evidence physical evidence gathered through inspection Which of the following best describes performance materiality in an audit? It refers to the fact that a misstatement or omission may be qualitatively material, even if the amount is less than the overall materiality. It is the amount of misstatement that pertains to income statement accounts, and is added to the balance sheet misstatements when evaluating the audit results. It is the amount set by the auditor for particular classes of transactions, account balances or disclosures that provides for a cushion and is less than the overall planning materiality for the entire financial statements. It is the preliminary estimate of the overall materiality made by the auditor, and is revised at the conclusion of the audit after all audit evidence is considered. Henry Hansen prepared a set of financial statements based on information provided to him. He checked mathematical accuracy of the data, and the client complimented him on the reasonable cost of the work he performed. Theodore performed audit compilation review none of the options are correct Which of the following would be an example of an applicable financial reporting framework? canadian auditing standards audit planning internal financial reporting standards generally accepted auditing standards Professional judgment is a widely used concept in accounting and auditing. How is it defined in the audit standards? There is no definition of professional judgment in the auditing standards. Professional judgment includes consideration of key principles and concepts of disciplines underlying the professional standards, such as economics, psychology, law, finance, statistics and philosophy. Professional judgment means reaching a complex decision by incorporating auditing standards, accounting standards, and rules of professional ethics in a coherent manner. Professional judgment involves specialized concepts and language integrating several disciplines in order to provide appropriate justification for audit decisions. Thomas Lawson was training junior audit staff and mentioned the importance of using confirmations. Which of the following are not confirmations used in an audit? payable confirmations employee confirmations bank confirmations receivable confirmations