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Multiple Choice
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1

Which of the following types of evidence is generally considered the least reliable?
A)Observation
B)Analytical procedures.
C)Documentation.
D)Confirmation
2

Which of the following factors will most likely affect an auditor's judgment about the quantity, type, and content of audit documentation?
A)The availability of generalized audit software
B)The timing of substantive tests completed prior to the balance sheet date.
C)The usefulness of the audit documentation as a reference source for the client.
D)The degree of reliance on internal control.
3

Which of the following statements is correct with regard to the competence of evidential matter?
A)The auditor's direct personal knowledge, obtained through observation and inspection, is more persuasive than information obtained indirectly from independent outside sources.
B)To be competent, evidential matter must be either valid or relevant but need not be both.
C)Accounting data alone may be considered sufficient competent evidential matter to issue an unqualified opinion on financial statements.
D)Competence of evidential matter refers to the amount of corroborative evidence to be obtained.
4

Discussions with the owner-manager of an audit client reveal to the auditor that the company is more concerned with minimizing their income tax payments than maximizing income. Based on this information, which management assertion will the auditor be most concerned about verifying with regard to sales revenue?
A)Existence and occurrence.
B)Completeness.
C)Rights and obligations.
D)Valuation.
5

Which of the following items is generally not included as part of audit documentation?
A)Heading.
B)Indexing.
C)Indication that the client has reviewed the audit documentation.
D)Tickmarks.
6

In evaluating the adequacy of the allowance for doubtful accounts, an auditor reviews the client's aging of accounts receivable to support management's assertion of:
A)Valuation
B)Completeness
C)Existence
D)Rights and obligations
7

Confirmations would normally be least likely used as a type of audit evidence in connection with which of the following?
A)Notes Payable.
B)Machinery & Equipment.
C)Accounts Receivable.
D)Cash.
8

The audit working paper that reflects the major components in support of a financial statement amount is known as a:
A)Lead schedule.
B)Carryforward schedule.
C)Working trial balance.
D)Support schedule.
9

Which of the following presumptions is correct regarding the reliability of audit evidence?
A)To be reliable, evidence should be convincing rather than simply persuasive.
B)Information obtained directly from outside sources is considered to be the most reliable type of evidence.
C)An effective internal control system provides more assurance with regard to the reliability of audit evidence.
D)Reliability generally refers to the amount and relevance of corroborative audit evidence obtained.
10

One of the main objectives of performing analytical review procedures to obtain evidence in the planning phase of the audit is to identify:
A)Transactions that have not been properly authorized.
B)Illegal acts undetected as a result of poor internal controls.
C)Inefficient operations.
D)Unusual changes that may signal possible account misstatements.





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