Solutions Manual for Auditing and Assurance
Services
Which of the following is an accurate statement regarding audit evidence?
A) Responses to the auditor's questions by client employees is considered highly persuasive
evidence.
B) Audit evidence should provide an absolute level of assurance.
C) The auditor uses evidence to determine whether the statements are fairly presented.
D) All evidence must be highly persuasive. - ANSWERSC
All evidence must have the same level of persuasiveness
T/F - ANSWERSFalse
Auditors use evidence to help them draw conclusions.
T/F - ANSWERSTrue
Auditors must make decisions regarding what evidence to gather and how much to accumulate.
Which of the following is a decision that must be made by auditors related to evidence?
A)
Sample size
Timing of audit procedures
Yes
Yes
B)
Sample size
Timing of audit procedures
,No
No
C)
Sample size
Timing of audit procedures
Yes
No
D)
Sample size
Timing of audit procedures
No
Yes - ANSWERSA
When can audit procedures be performed?
A)
Prior to the fiscal year-end of the client
Subsequent to the fiscal year-end of the client
Yes
Yes
B)
Prior to the fiscal year-end of the client
Subsequent to the fiscal year-end of the client
No
,No
C)
Prior to the fiscal year-end of the client
Subsequent to the fiscal year-end of the client
Yes
No
D)
Prior to the fiscal year-end of the client
Subsequent to the fiscal year-end of the client
No
Yes - ANSWERSA
A(n) ________ is the detailed instruction that explains the audit evidence to be obtained during
the audit.
A) audit objective
B) audit procedure
C) audit assertion
D) audit program - ANSWERSB
Which of the following is not one of the four decisions about what evidence to gather and how
much of it to accumulate?
A) which audit procedures to use
B) which accounts must agree to the general ledger
C) when to perform the procedures
D) what sample size to select for a given procedure - ANSWERSB
, When making audit evidence decisions,
A) the auditor decides which items in the population to test before determining the sample size.
B) the sample size for any given procedure must remain constant from audit to audit.
C) audit engagement software can assist the auditor in making evidence decisions.
D) the auditor is required to use the sample sizes that are determined by the PCAOB. -
ANSWERSC
An audit program is the list of audit procedures for an audit area or an entire audit.
T/F - ANSWERSTrue
Audit evidence has two primary qualities for the auditor; relevance and reliability. Given the
choices below, which provides the auditor with the most reliable audit evidence?
A) general ledger account balances
B) confirmation of accounts receivable balance received from a customer
C) internal memo explaining the issuance of a credit memo
D) copy of month-end adjusting entries - ANSWERSB
Which of the following is not a characteristic of the reliability of evidence?
A) effectiveness of client internal controls
B) education of auditor
C) independence of information provider
D) timeliness - ANSWERSB
The auditor must gather sufficient and appropriate evidence during the course of the audit.
Sufficient evidence must
A) be well documented and cross-referenced in the audit documents.
Services
Which of the following is an accurate statement regarding audit evidence?
A) Responses to the auditor's questions by client employees is considered highly persuasive
evidence.
B) Audit evidence should provide an absolute level of assurance.
C) The auditor uses evidence to determine whether the statements are fairly presented.
D) All evidence must be highly persuasive. - ANSWERSC
All evidence must have the same level of persuasiveness
T/F - ANSWERSFalse
Auditors use evidence to help them draw conclusions.
T/F - ANSWERSTrue
Auditors must make decisions regarding what evidence to gather and how much to accumulate.
Which of the following is a decision that must be made by auditors related to evidence?
A)
Sample size
Timing of audit procedures
Yes
Yes
B)
Sample size
Timing of audit procedures
,No
No
C)
Sample size
Timing of audit procedures
Yes
No
D)
Sample size
Timing of audit procedures
No
Yes - ANSWERSA
When can audit procedures be performed?
A)
Prior to the fiscal year-end of the client
Subsequent to the fiscal year-end of the client
Yes
Yes
B)
Prior to the fiscal year-end of the client
Subsequent to the fiscal year-end of the client
No
,No
C)
Prior to the fiscal year-end of the client
Subsequent to the fiscal year-end of the client
Yes
No
D)
Prior to the fiscal year-end of the client
Subsequent to the fiscal year-end of the client
No
Yes - ANSWERSA
A(n) ________ is the detailed instruction that explains the audit evidence to be obtained during
the audit.
A) audit objective
B) audit procedure
C) audit assertion
D) audit program - ANSWERSB
Which of the following is not one of the four decisions about what evidence to gather and how
much of it to accumulate?
A) which audit procedures to use
B) which accounts must agree to the general ledger
C) when to perform the procedures
D) what sample size to select for a given procedure - ANSWERSB
, When making audit evidence decisions,
A) the auditor decides which items in the population to test before determining the sample size.
B) the sample size for any given procedure must remain constant from audit to audit.
C) audit engagement software can assist the auditor in making evidence decisions.
D) the auditor is required to use the sample sizes that are determined by the PCAOB. -
ANSWERSC
An audit program is the list of audit procedures for an audit area or an entire audit.
T/F - ANSWERSTrue
Audit evidence has two primary qualities for the auditor; relevance and reliability. Given the
choices below, which provides the auditor with the most reliable audit evidence?
A) general ledger account balances
B) confirmation of accounts receivable balance received from a customer
C) internal memo explaining the issuance of a credit memo
D) copy of month-end adjusting entries - ANSWERSB
Which of the following is not a characteristic of the reliability of evidence?
A) effectiveness of client internal controls
B) education of auditor
C) independence of information provider
D) timeliness - ANSWERSB
The auditor must gather sufficient and appropriate evidence during the course of the audit.
Sufficient evidence must
A) be well documented and cross-referenced in the audit documents.
