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Question(s) / Instruction(s):

ACC3118

1) When the auditor is gathering evidence, if the source of the evidence is independent of the client,

The auditor will conclude that the evidence is:

A) Not reliable unless the provider is qualified to provide the evidence.

B) Reliable.

C) Reliable if the provider has no reason to be biased.

D) Not reliable.

 

2) When an analytical procedure reveals no unusual fluctuations, the implication is that:

A) The possibility of a material error or irregularity is minimized.

B) There are no material irregularities.

C) There are no material errors or irregularities.

D) There are no material errors.

 

3) Those procedures specifically outlined in an audit program are primarily designed to:

A) Prevent litigation.

B) Gather evidence.

C) Detect errors or irregularities.

D) Test internal systems.

 

4) An audit program:

A) Always includes a list of the audit procedures.

B) Normally there is one for each component of the audit.

C) Usually includes sample sizes, items to select and the timing of the tests.

D) All of the above.

 

5) An example of vouching would be to:

A) Trace from duplicate bank deposit slips to the cash receipts journal.

B) Trace from cancelled cheques to the cash disbursement journal.

C) Trace from receiving reports to the acquisitions journal.

D) Trace from the acquisitions journal to supporting vendorsʹ invoices.

 

6) ASA 500 requires auditors to accumulate sufficient appropriate evidence to support the opinion

Issued.Because of the nature of audit evidence, it is:

A) Unlikely the auditor will arrive at a conclusion.

B) Likely that the auditor would change his/her mind about the opinion if he/she took the time

To gather additional evidence

C) Unlikely the auditor will be completely convinced that the opinion is correct.

D) Likely the auditor will be completely convinced that the opinion is correct.

 

7) Evidence is generally considered competent when:

A) It consists of written statements made by managers of the enterprise under audit.

B) It has been obtained by random selection.

C) It has the qualities of being relevant, objective and free from known bias.

D) There is enough of it to afford a reasonable basis for an opinion on financial statements.

 

 

8) Rank the reliability of the following items of audit evidence:

1. A sales invoice issued by the company.

2. Confirmation of an account payable balance mailed by and returned directly to the auditor.

3. Minutes of a board meeting.

4. The original signed lease agreement.

A) 4,2,1,3

B) 2,3,4,1

C) 4,3,2,1

D) 3,4,2,1

 

9) The following statements were made in a discussion of audit evidence between two auditors.

Which statement is not valid concerning evidential matter?

 

A) I am seldom convinced beyond all doubt with respect to all aspects of the statements being

Examined

B) I evaluate the usefulness of the evidence I can obtain against the cost to obtain it.

C) I evaluate the degree of risk involved in deciding the kind of evidence I will gather.

D) I would not undertake that procedure because, at best, the results would only be persuasive

And I’m looking for convincing evidence.

 

10) A document which the auditor receives from the client, but which was prepared by someone

Outside the client’s organization is:

A) An inquiry.

B) An internal document.

C) An external document.

D) A confirmation.

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