Audit in depth is synonymous for_____________?
(A) Complete audit
(B) Completed audit
(C) Final audit
(D) Detailed audit
When is evidential matter, generally, considered sufficient?
(A) When it constitutes entire population
(B) When it is enough to provide a basis for giving reasonable assurance regarding truthfulness
(C) When it is objective and relevant
(D) When auditor collects and evaluates it independently
Which of the following statements is, generally, correct about the reliability of auditevidence?
(A) To be reliable, evidence should conclusive rather than persuasive
(B) Effective internal control system provides reliable audit evidence
(C) Evidence obtained from outside sources routed through the client
(D) All are correct.
The nature, timing and extent of substantive procedures is _________ related to assessed level of control risk?
(A) randomly
(B) disproportionately
(C) directly
(D) inversely
In an audit of financial statements, substantive tests are audit procedures that___________?
(A) may be eliminated for an account balance under certain conditions
(B) are designed to discover significant subsequent events
(C) will increase proportionately when the auditor decreases the assessed level of control risk
(D) may be test of transactions, test of balance and analytical procedures
Of the following, which is the least persuasive type of audit evidence?
(A) Bank statements obtained from the client
(B) Documents obtained by auditor from third parties directly.
(C) Carbon copies of sales invoices inspected by the auditor
(D) Computations made by the auditor
What is the primary objective of analytical procedures used in the overall review stage of an audit?
(A) To help to corroborate the conclusions drawn from individual components of financial statements
(B) To reduce specific detection risk
(C) To direct attention to potential risk areas
(D) To satisfy doubts when questions arise about a client’s ability to continue
When applying analytical procedures, an auditor could develop independent estimate of an account balance to compare it to___________?
(A) client’s unedited account balance
(B) client’s unedited account balance adjusted for trends in the industry
(C) Prior year audited balance
(D) Prior year audited balance adjusted for trends in the industry
Which of the following is not an analytical procedure?
(A) Tracing of purchases recurred in the purchase book to purchase invoices.
(B) Comparing aggregate wages paid to number of employees
(C) Comparing the actual costs with standard costs
(D) All of them are analytical procedure
What are analytical procedures?
(A) Substantive tests designed to assess control risk
(B) Substantive tests designed to evaluate the validity of management’s representation letter
(C) Substantive tests designed to study relationships between financial and nonfinancial
(D) All of the above