Of the following, which is the least persuasive type of audit evidence?
- A) Bank statements obtained from the client
- B) Documents obtained by auditor from third parties directly.
- C) Carbon copies of sales invoices inspected by the auditor
- D) Computations made by the auditor
Which of the following statements is, generally, correct about the reliability of audit evidence?
- A) To be reliable, evidence should conclusive rather than persuasive
- B) Effective internal control system provides reliable audit evidence
- C) Evidence obtained from outside sources routed through the client
- D) All are correct.
In an audit of financial statements, substantive tests are audit procedures that __
- A) may be eliminated for an account balance under certain conditions
- B) are designed to discover significant subsequent events
- C) will increase proportionately when the auditor decreases the assessed level of control risk
- D) may be test of transactions, test of balance and analytical procedures
The nature, timing and extent of substantive procedures is related to assessed level of control risk
- A) randomly
- B) disproportionately
- C) directly
- D) inversely
Which of the following factors is most important in determining the appropriations of audit evidence?
- A) The reliability of audit evidence and its relevance in meeting the audit objective
- B) The objectivity and integrity of the auditor
- C) The quantity of audit evidence
- D) The independence of the source of evidence
When is evidential matter, generally, considered sufficient?
- A) When it constitutes entire population
- B) When it is enough to provide a basis for giving reasonable assurance regarding truthfulness
- C) When it is objective and relevant
- D) When auditor collects and evaluates it independently
Which of the following is not a corroborative evidence?
- A) Minutes of meetings
- B) Confirmations from debtors
- C) Information gathered by auditor through observation
- D) Worksheet supporting consolidated financial statements
What would most appropriately describe the risk of incorrect rejection in terms of substantive testing?
- A) The auditor concludes balance is materially correct when in actual fact it is not
- B) The auditor concludes that the balance is materially misstated when in actual fact it not
- C) The auditor has rejected an item for sample which was material
- D) None of the above
Which of the following affects audit effectiveness?
- A) Risk of over reliance
- B) Risk of incorrect rejection
- C) Risk of incorrect acceptance
- D) Both (a) and (c)
What would most effectively describe the risk of incorrect acceptance in terms of substantive audit testing?
- A) The auditor has ascertained that the balance is materially correct when in actual fact it is not
- B) The auditor concludes the balance is materially misstated when in actual fact is not
- C) The auditor has rejected an item from sample which was not supported by documentary evidence
- D) He applies random sampling on data which is inaccurate and inconsistent