Test Bank Bundle: Auditing and Assurance
Services . Arens + Auditing & Assurance
Services: A Systematic Approach | Verified
MCQs & Exam Answers | 2025/2026 A+
Grades
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. - answers C
All evidence must have the same level of persuasiveness
T/F - answers False
Auditors use evidence to help them draw conclusions.
T/F - answers True
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 - answers A
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 - answers A
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 - answers B
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 - answers B
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. -
answers C
An audit program is the list of audit procedures for an audit area or an entire audit.
T/F - answers True
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 - answers B
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 - answers B
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.
B) be based on sources that are external to company.
C) provide evidence that prove or disprove an audit objective/assertion.
D) be persuasive enough to enable the auditor to issue an audit report. - answers D
Audit evidence obtained directly by the auditor will not be reliable if
A) the auditor lacks the competence to evaluate the evidence.
B) it is provided by the client's attorney.
C) the client denies its veracity.
D) it is impossible for the auditor to obtain additional corroboratory evidence. - answers
A
Appropriateness of evidence is a measure of the
A) quantity of evidence.
B) quality of evidence.
C) sufficiency of evidence.
D) meaning of evidence. - answers B
Which of the following statements regarding the relevance of evidence is correct?
A) To be relevant, evidence must pertain to the audit objective of the evidence.
B) To be relevant, evidence must be persuasive.
, C) To be relevant, evidence must relate to multiple audit objectives.
D) To be relevant, evidence must be derived from a system including effective internal
controls. - answers A
Two determinants of the persuasiveness of evidence are
A) competence and sufficiency.
B) relevance and reliability.
C) appropriateness and sufficiency.
D) independence and effectiveness.
Answer: C - answers C
The two characteristics of the appropriateness of evidence are
A) relevance and timeliness.
B) relevance and accuracy.
C) relevance and reliability.
D) reliability and accuracy. - answers C
Which of the following forms of evidence would be least persuasive in forming the
auditor's opinion about marketable securities and other investments held by the
company?
A) responses to auditor's questions by the president and controller regarding the
investments account
B) correspondence with a stockbroker regarding the quantity of client's investments held
in street name by the broker
C) minutes of the board of directors authorizing the purchase of stock as an investment
D) the auditor's count of marketable securities - answers A
Which of the following statements is not correct?
A) It is possible to vary the sample size from one unit to 100% of the items in the
population.
B) Cost is an adequate justification for not gathering an adequate sample size.
C) The decision of how many items to test must be made by the auditor for each audit
procedure.
D) The sample size for any given procedure is likely to vary from audit to audit. -
answers B
For audit evidence to be compelling to the auditor it must be sufficient and appropriate.
Which statement below is not correct regarding the appropriateness of audit evidence?
A) The more effective the internal control system, the more assurance it provides the
auditor about the reliability of financial reporting by the client.
B) An auditor's opinion, to be economically useful and profitable to the auditing firm
needs to be formed within a reasonable time and based on evidence obtained that
assures profits for the auditing firm.
C) Evidence obtained from independent sources outside the entity is generally more
reliable than evidence secured solely within the entity.
Services . Arens + Auditing & Assurance
Services: A Systematic Approach | Verified
MCQs & Exam Answers | 2025/2026 A+
Grades
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. - answers C
All evidence must have the same level of persuasiveness
T/F - answers False
Auditors use evidence to help them draw conclusions.
T/F - answers True
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 - answers A
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 - answers A
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 - answers B
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 - answers B
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. -
answers C
An audit program is the list of audit procedures for an audit area or an entire audit.
T/F - answers True
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 - answers B
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 - answers B
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.
B) be based on sources that are external to company.
C) provide evidence that prove or disprove an audit objective/assertion.
D) be persuasive enough to enable the auditor to issue an audit report. - answers D
Audit evidence obtained directly by the auditor will not be reliable if
A) the auditor lacks the competence to evaluate the evidence.
B) it is provided by the client's attorney.
C) the client denies its veracity.
D) it is impossible for the auditor to obtain additional corroboratory evidence. - answers
A
Appropriateness of evidence is a measure of the
A) quantity of evidence.
B) quality of evidence.
C) sufficiency of evidence.
D) meaning of evidence. - answers B
Which of the following statements regarding the relevance of evidence is correct?
A) To be relevant, evidence must pertain to the audit objective of the evidence.
B) To be relevant, evidence must be persuasive.
, C) To be relevant, evidence must relate to multiple audit objectives.
D) To be relevant, evidence must be derived from a system including effective internal
controls. - answers A
Two determinants of the persuasiveness of evidence are
A) competence and sufficiency.
B) relevance and reliability.
C) appropriateness and sufficiency.
D) independence and effectiveness.
Answer: C - answers C
The two characteristics of the appropriateness of evidence are
A) relevance and timeliness.
B) relevance and accuracy.
C) relevance and reliability.
D) reliability and accuracy. - answers C
Which of the following forms of evidence would be least persuasive in forming the
auditor's opinion about marketable securities and other investments held by the
company?
A) responses to auditor's questions by the president and controller regarding the
investments account
B) correspondence with a stockbroker regarding the quantity of client's investments held
in street name by the broker
C) minutes of the board of directors authorizing the purchase of stock as an investment
D) the auditor's count of marketable securities - answers A
Which of the following statements is not correct?
A) It is possible to vary the sample size from one unit to 100% of the items in the
population.
B) Cost is an adequate justification for not gathering an adequate sample size.
C) The decision of how many items to test must be made by the auditor for each audit
procedure.
D) The sample size for any given procedure is likely to vary from audit to audit. -
answers B
For audit evidence to be compelling to the auditor it must be sufficient and appropriate.
Which statement below is not correct regarding the appropriateness of audit evidence?
A) The more effective the internal control system, the more assurance it provides the
auditor about the reliability of financial reporting by the client.
B) An auditor's opinion, to be economically useful and profitable to the auditing firm
needs to be formed within a reasonable time and based on evidence obtained that
assures profits for the auditing firm.
C) Evidence obtained from independent sources outside the entity is generally more
reliable than evidence secured solely within the entity.
