Question 1:

Of the following three types of evidence collection methods (Observation, Inspectionand Inquiry of management) list them in order from the "most reliable audit evidence to least reliable audit evidence.

Question 01 options:

Inspection, inquiry of management, observation,

Inquiry of management inspection, , observation,

Observation, inspection, inquiry of management

Inspection, observatin, inquiry of management

Question 2:

Which audit opinion (audit report) would be the most appropriate in the following case?

Four weeks after the year-end date, a major customer of Delta Farm Inc. declared bankruptcy. Because the customer had confirmed the balance due to Delta at the balance sheet date, management refuses to write off the account and disclose the information. The receivable represents approximately 10% of accounts receivable, 20% of net earnings before taxes and could materially impact the value of inventory since the customer maintained a large value of inventory on consignment. You decide that this could have a material and pervasive affect on the financial statements.

Question 02 options:

Unmodified/Unqualified

Unmodified/Unqualified with an emphasis of matter paragraph

Adverse

Modified/Qualified - Scope restriction

Question 3:

Which of the five balance-related audit objectives is the auditor testing in the following procedure?

"Comparing the cost of a sample of inventory items to the price they can be sold for, less any selling costs, (i.e. commissions, shipping costs)".

Question 03 options:

Allocation

Accuracy

Valuation

Rights & Obligations