Chapter 5 SB HW

Question 1

Whether assets, liabilities and equity have been recorded in the proper accounts is related to the ________ assertion.

Answer 1

classification

Question 2

On most audit engagements, ______ makes up the bulk of the evidence gathered by the auditor.

Answer 2

inspection of records or documents

Question 3

The second step in the analytical procedures decision process is to define a ___________ difference.

Answer 3

tolerable

Question 4

The basic framework for the auditor’s understanding of audit evidence and its use in supporting the auditor’s opinion on the financial statements are ____________.

Answer 4

auditing standards

Question 5

A set of audit procedures prepared to test assertions for a component of the financial statements is usually referred to as an ______________.

Answer 5

audit program

Question 6

For lower-risk, well-controlled accounts, the assurance bucket may be filled entirely with tests of ________ and substantive analytical procedures.

Answer 6

controls

Question 7

The functions of audit documentation are to

Answer 7

1. Provide basis for review
2. Provide support that audit was conducted in accordance with GAAS
3. Aid in planning, performance, and supervision

Question 8

The primary concern of ______ is simply whether the relationship used to test the assertion makes sense

Answer 8

plausibility

Question 9

Unexpected differences may be addressed by reviewing the _________ for sufficient evidence.

Answer 9

work papers

Question 10

During planning, the auditor determines whether planned procedures need to be revised due to ________ analytical procedures.

Answer 10

preliminary

Question 11

Entity personnel may be asked to explain unexpected ________.

Answer 11

differences

Question 12

In general, ______ analysis is the least precise method to form an expectation, while ______ analysis is the most precise.

Answer 12

trend; reasonableness

Question 13

Management stating that all major restrictions on the entity resulting from debt covenants are disclosed in the footnotes and expressed clearly to users of the financial statements is an example of the ______ assertion.

Answer 13

completeness

Question 14

Examining internal or external records or documents that are in paper form, electronic form, or other media is known as _______.

Answer 14

inspection

Question 15

The auditor can issue an unqualified/unmodified report when audit evidence supports management’s _______.

Answer 15

assertions

Question 16

Audit documentation is referred to as ____________ or the audit file.

Answer 16

working papers

Question 17

All types of analysis are used for substantive analytical procedures, but ______ analysis is not commonly used for risk assessment or final analytical procedures.

Answer 17

reasonableness

Question 18

Because the entity’s personnel might have incentives to record fictitious transactions, the ________assertion is relevant to revenue transactions.

Answer 18

occurence/validity

Question 19

Whether amounts and other data relating to recorded transactions and events have been recorded appropriately is addressed by the ______ assertion.

Answer 19

accuracy

Question 20

Ensuring that ordinary repairs to assets are charged to the repairs and maintenance expense account and not capitalized tests the ______ assertion.

Answer 20

classification

Question 21

A management statement that the inventory shown on the balance sheet was available for sale at the balance sheet date is an example of the _______
assertion.

Answer 21

existence

Question 22

A statement by management that the ending balance of Notes Payable represents the total outstanding notes due at the balance sheet date is an example of the __________ assertion.

Answer 22

completeness