Which of the following experts would be more objective?

expert who owes money to the client

expert is related to the chief financial officer of the client

expert is completely independent of the client

expert is a past employee of the company

Invoices, bank statements, and minutes of meetings are all examples of

computational evidence.

documentary evidence.

verbal evidence.

physical evidence.

Which of the following would provide evidence using the evidence-gathering technique of recalculation?

checking the mathematical accuracy of the depreciation expense

speaking to the accounting manager about why expenses increased

estimating the rent revenue by multiplying the number of rooms by the average rent charged

watching the inventory count performed by the client

Which of the following describes how the auditor tests for cut-off?

auditor searches for evidence to verify that a recorded transaction took place and relates to the entity

auditor searches for transactions and makes sure these have been recorded

auditor searches for evidence that transactions have been recorded at appropriate amounts

auditor searches for evidence that transactions have been recorded in the correct accounting period

What is the required record-keeping period for the auditors working papers?

10 years

6 months

1 year

5 years

Which of the following is NOT an example of externally generated evidence sent directly to the auditor?

responses to legal letters

payable confirmations

supplier invoices

bank confirmations

7.The auditors decision as to what constitutes sufficient appropriate audit evidence is a matter of professional judgement. Which of the following is NOT part of this decision?

their understanding of the client

the significant risks identified

managements opinion

the evidence gathered when executing the audit

8. Which of the following describes how the auditor tests for the rights and obligations of assets?

auditor searches for evidence to verify that assets are owned by the entity

auditor searches for evidence to verify that assets have been recorded at appropriate amounts and allocated to correct general ledger accounts

auditor searches for assets and ensures that they have been recorded

auditor searches for evidence to verify that assets included in the account balances which appear in the financial statements are real

9. When an auditor searches for evidence to verify that a recorded transaction or event took place and relates to the entity, the auditor is testing for

accuracy.

classification.

completeness.

occurrence.

Which of the following does NOT describe sufficient appropriate audit evidence?

the sufficiency of evidence is a matter of professional scepticism

sufficiency relates to the quantity of evidence

the quality of evidence affects the quantity required

appropriateness relates to the quality of evidence

Which of the following is NOT a reason that auditors ensure they understand an entitys internal controls?

required by auditing standards

provides evidence of inherent risks

component of the overall audit risk assessment

influences the audit strategy

An observed condition that provides evidence that the control being tested did not operate as intended is known as a(n)

compensating control.

invalid control.

control strength.

control exception.

A sequence test is performed on the payroll information to ensure all employee numbers have been accounted for. What type of control is this?

input control

processing control

output control

logical access control

Transactions need to be classified appropriately. This internal control objective relates to all of the following assertions EXCEPT for

completeness.

allocation.

accuracy.

valuation.

Which of the following would NOT be used by the auditor when determining which internal control deficiencies should be communicated to management?

consultation with other audit team members

professional judgement

determination of the significance of the weakness

professional scepticism

The risk that an auditor expresses an inappropriate audit opinion when the financial statements are materially misstated is defined as

detection risk.

inherent risk.

audit risk.

business risk.

Which of the following accurately describes a checklist or preformatted questionnaire?

highlights key activities from initiation to reporting as well as describing what happens in the flow of transactions

involves the auditor describing in words each step of the flow of transaction from start to finish

systematically identifies the most common types of internal control procedures that should be present

involves the auditor summarizing in boxes each step of the flow of transaction from start to finish

Which of the following accurately describes the narrative form of documentation?

involves the auditor summarizing in boxes each step of the flow of transaction from start to finish

involves the auditor describing in words each step of the flow of transaction from start to finish

systematically identifies the most common types of internal control procedures that should be present

highlights key activities from initiation to reporting as well as describing what happens in the flow of transactions

After controls have been tested, the auditors next step is to

perform substantive testing.

document the work.

form an audit opinion.

create an audit plan.

Which of the following is NOT specifically addressed by internal control objectives?

amount of inventory recorded

timing of revenue recognition entries

disclosure in the statements

recording of cash receipts