True or false

1. Detailed tests of payroll during an audit are usually not extensive because employees will complain if underpaid, payroll transactions are standard and

not complicated, and payroll transactions are subject to audit by governments.

2. The most important reason for auditors to confirm a clients law firm is to ensure that liabilities are not overstated.

3. The main audit objective in the audit of accounts payable is to determine whether accounts payable are understated in the accounting records.

4. The accounts payable department usually verifies the accuracy of a supplier invoice for raw material acquisitions by comparing the details on the invoice to the purchase order and receiving the report.

5. The auditors internal control objective to determine that recorded acquisitions are for goods actually received is to satisfy the audit

the objective of completeness of recorded assets.

6. If a clients inventory is counted the day before the yearend date, the auditor must usually ensure that goods received the next day (that is, on the yearend date) are added to both inventory and accounts payable.

7. To gather audit evidence about the cash balance per bank as reflected in a clients bank reconciliation, an auditor would obtain a copy of the clients bank

statement.

8. Cash on hand in a business normally has a high inherent risk.

9. The audit evidence considered most reliable by auditors is the written representations that the auditors obtain from management.

10. Auditors usually perform inventory counts for audit purposes four months from the yearend date by relying on internal control for the interim period. 11. If internal control is poor, the extent of substantive audit procedures should increase in order to reduce detection risk