Audit Evidence

Question 1

What is all the information the auditor uses to arrive at the conclusions on which the audit is based?

Answer 1

Audit evidence

Question 2

Audit evidence is gathered throughout the audit when performing?

Answer 2

Risk assessment procedures, tests of controls, substantive procedures, and other audit procedures

Question 3

What are different types of audit evidence?

Answer 3

Accounting records, corroborating evidence, and evidence in electronic form

Question 4

How does the auditor tests the accounting records?

Answer 4

Through analytical procedures and substantive procedures

Question 5

What does corroborating evidence include?

Answer 5

Minutes, confirmations, industry analysts’ reports, data about competitors, and information obtained through observation, inquiry and inspection

Question 6

Is cost alone or difficulty in obtaining evidence a valid basis for omitting a procedure for which there is no appropriate alternative?

Answer 6

No

Question 7

Appropriate audit evidence must be?

Answer 7

Reliable and relevant

Question 8

What is the hierarchy of audit evidence?

Answer 8

Auditor’s direct personal knowledge, external evidence, internal evidence, and oral evidence

Question 9

What does substantive procedures consist of?

Answer 9

Test of details and substantive analytical procedures

Question 10

What are audit procedures used to gather evidence to support the account balances as reflected in the financial statements?

Answer 10

Tests of detail

Question 11

What procedures include a review of the current and prior year’s financial statements and the current year’s budget?

Answer 11

Analytical procedures

Question 12

How should the auditor design and perform substantive analytical procedures?

Answer 12

Determine the analytical procedures that are suitable for testing the assertion, evaluate the reliability of the data from which the auditor’s expectation is to be developed, develop an expectation, perform the analytical procedures and compare the results, and investigate any significant difference

Question 13

How does an auditor investigate any significant difference?

Answer 13

Inquiring of management and performing other audit procedures as necessary

Question 14

When an analytical procedure is used as the principal substantive test of a significant financial statement assertion, the auditor is required to document the?

Answer 14

Auditor’s expectation, factors, results, additional audit procedures performed, and results of such additional procedures

Question 15

What type of confirmation is stating that the party agrees or disagrees with the information in the request?

Answer 15

Positive

Question 16

What type of confirmation is when the confirming party respond directly to the auditor only if the confirming party disagrees with the information in the request?

Answer 16

Negative

Question 17

The auditor should maintain control over external confirmation requests, including?

Answer 17

Information to be confirmed, selecting the appropriate confirming party, designing the confirmation, and sending the requests

Question 18

What does footing, crossfooting, and recalculation?

Answer 18

Verify the mathematical accuracy

Question 19

What does inquiry consist of?

Answer 19

Requesting information from knowledgeable parties

Question 20

What is directional testing in which the auditor examines support for what has been recorded in the records and statements?

Answer 20

Vouching

Question 21

What generally provides evidence about the existence assertion, rather than about ownership, rights, obligations, or valuation?

Answer 21

Examination/Inspection

Question 22

What is a specific type of inquiry that involves obtaining representations from independent external third parties about account balances and transactions or events?

Answer 22

Confirmation

Question 23

What is the relevant assertions mneumonic for account balances?

Answer 23

CVER

Question 24

What is the relevant assertions mneumonic for transactions and events?

Answer 24

Completeness, valuation, allocation, and accuracy, existence and occurrence, and rights and obligations

Question 25

What is the relevant assertion mneumonic for transactions and events?

Answer 25

COVEU

Question 26

What is the relevant assertions for transactions and events?

Answer 26

Completeness, cutoff, valuation, allocation, and accuracy, existence and occurrence, and understandability and classification

Question 27

What is the relevant assertion mneumonic for presentation and disclosure?

Answer 27

CVRU

Question 28

What is the relevant assertions for presentation and disclosure?

Answer 28

Completeness, valuation, allocation, and accuracy, rights and obligations, and occurrence, and understandability and classification

Question 29

What is mneumonic for standard auditing procedures?

Answer 29

FIVE CARROT CARS

Question 30

What are the standard auditing procedures?

Answer 30

Footing, inquiry, vouching, examination, confirmation, analytical procedures, reperformance, reconciliation, observation, tracing, cutoff review, auditing related accounts simultaneously, representation letter, and subsequent events review

Question 31

What are the auditing procedures for the assertion completeness?

Answer 31

Tracing, analytical review, and observation

Question 32

What are the auditing procedures for the assertion cutoff?

Answer 32

Cutoff procedures

Question 33

What are the auditing procedures for the assertion valuation, allocation, and accuracy?

Answer 33

Inspection, footing, independent recalculation, and reconciliation

Question 34

What are the auditing procedures for the assertion existence and occurrence?

Answer 34

Confirmation, observation, inspection, and examination, and vouching

Question 35

What are the auditing procedures for the assertion rights and obligations?

Answer 35

Inspection

Question 36

What are the auditing procedures for the assertion understandability and classification?

Answer 36

Inspection, review, and inquiry of management