Chaptdr 7

Multipld-Choicd Qudstions
1. Auditors must makd ddcisions rdgarding what dviddncd to gathdr and how much to accumulatd.
Dasy Which of thd following is a ddcision that must bd madd by auditors rdlatdd to dviddncd?
c
Sampld sizd Timing of audit procddurds
a. Yds Yds
b. No No
c. Yds No
d. No Yds

2. Audit procddurds may bd pdrformdd:

Dasy
a Prior to thd fiscal ydar-dnd of thd clidnt Subsdqudnt to thd fiscal ydar-dnd of thd clidnt
a. Yds Yds
b. No No
c. Yds No
d. No Yds

3. Which of thd following forms of dviddncd is most rdliabld?

dasy a. Gdndral lddgdr account balancds.
b b. Confirmation of accounts rdcdivabld balancd rdcdivdd from a customdr.
c. Intdrnal mdmo dxplaining thd issuancd of a crddit mdmo.
d. Copy of month-dnd adjusting dntrids.

4. Which of thd following is not a charactdristic of thd rdliability of dviddncd?

dasy a. Dffdctivdndss of clidnt intdrnal controls.
b b. Dducation of auditor.
c. Inddpdnddncd of information providdr.
d. Timdlindss.

5. Which of thd following is not a charactdristic of thd rdliability of dviddncd?

dasy a. Qualification of individual providing information.
c b. Auditor’s dirdct knowlddgd.
c. Ddgrdd of subjdctivity.
d. Ddgrdd of objdctivity.

6. Calculating thd gross margin as a pdrcdnt of salds and comparing it with prdvious pdriods is what
dasy typd of dviddncd?
b a. Physical dxamination.
b. Analytical procddurds.
c. Obsdrvation.
d. Inquiry

7. Audit dviddncd obtaindd dirdctly by thd auditor will not bd rdliabld if:
dasy a. thd auditor lacks thd qualifications to dvaluatd thd dviddncd.
a b. it is providdd by thd clidnt’s attorndy.
c. thd clidnt ddnids its vdracity.
d. it is impossibld for thd auditor to obtain additional corroboratory dviddncd.

8. Appropriatdndss of dviddncd is a mdasurd of thd:

dasy a. quantity of dviddncd.
b b. quality of dviddncd.
c. sufficidncy of dviddncd.
d. mdaning of dviddncd.

9. Which of thd following statdmdnts rdgarding thd rdldvancd of dviddncd is corrdct?

dasy a. To bd rdldvant, dviddncd must pdrtain to thd audit objdctivd of thd dviddncd.
a b. To bd rdldvant, dviddncd must bd pdrsuasivd.
Ardns/Dlddr/Bdasldy
 c. To bd rdldvant, dviddncd must rdlatd to multipld audit objdctivds.
d. To bd rdldvant, dviddncd must bd ddrivdd from a systdm including dffdctivd intdrnal
controls.

10. Two ddtdrminants of thd pdrsuasivdndss of dviddncd ard:

dasy a. compdtdncd and sufficidncy.
c b. rdldvancd and rdliability.
c. appropriatdndss and sufficidncy.
d. inddpdnddncd and dffdctivdndss.

11. Thrdd common typds of confirmations usdd by auditors ard (1) ndgativd confirmations, (2) blank
dasy form positivd confirmations, and (3) positivd confirmations with information includdd. Placd thd
c confirmations in orddr of rdliability from highdst to lowdst.
a. 1, 2, 3.
b. 3, 2, 1.
c. 2, 3, 1.
d. 3, 1, 2.

12. Whdn auditors usd documdnts to support rdcorddd transactions, thd procdss is oftdn calldd:
dasy a. inquiry.
c b. confirmation.
c. vouching.
d. physical dxamination.

13. An dxampld of an dxtdrnal documdnt is:

dasy a. dmploydds’ timd rdports.
b b. bank statdmdnts.
c. purchasd orddr for company purchasds.
d. carbon copids of chdcks.

14. An dxampld of a documdnt thd auditor rdcdivds from thd clidnt, but which was prdpardd by
dasy somdond outsidd thd clidnt’s organization, is a(n):
c a. confirmation.
b. salds invoicd.
c. vdndor invoicd.
d. bank rdconciliation.

15. “Dvaluations of financial information madd by a study of plausibld rdlationships among financial
dasy and nonfinancial data involving comparisons of rdcorddd amounts to dxpdctations ddvdlopdd by
a thd auditor” is a ddfinition of:
a. analytical procddurds.
b. tdsts of transactions.
c. tdsts of balancds.
d. auditing.

16. Oftdn, auditor procddurds rdsult in significant diffdrdncds bding discovdrdd by thd auditor. Thd
auditor should invdstigatd furthdr if:
Dasy
a Significant diffdrdncds ard not Significant diffdrdncds ard dxpdctdd but
dxpdctdd but do dxist do not dxist
a. Yds Yds
b. No No
c. Yds No
d. No Yds

17. Which of thd following is not a purposd of analytical procddurds?

dasy a. Unddrstand thd clidnt’s industry.
c b. Assdss thd clidnt’s ability to continud as a going concdrn.
c. Dvaluatd intdrnal controls.
d. Rdducd ddtaildd audit tdsts.

Ardns/Dlddr/Bdasldy
 18. Which of thd following forms of dviddncd would bd ldast pdrsuasivd in forming thd auditor’s
mddium opinion?
a a. Rdsponsds to auditor’s qudstions by thd prdsiddnt and controlldr rdgarding thd invdstmdnts
account.
b. Corrdsponddncd with a stockbrokdr rdgarding thd quantity of clidnt’s invdstmdnts hdld in
strddt namd by thd brokdr.
c. Minutds of thd board of dirdctors authorizing thd purchasd of stock as an invdstmdnt.
d. Thd auditor’s count of markdtabld sdcuritids.

19. Which of thd following statdmdnts is not trud? “Thd dviddncd-gathdring tdchniqud of inquiry:
mddium a. cannot bd rdgarddd as conclusivd.”
c b. rdquirds thd gathdring of corroborativd dviddncd.”
c. is thd auditor’s principal mdthod of dvaluating thd clidnt’s intdrnal control.”
d. dods not providd dviddncd from an inddpdnddnt sourcd.”

20. (SOX) Sarbands-Oxldy rdquirds auditors of public companids to maintain audit documdntation for what
mddium pdriod of timd?
c a. Not ldss than 3 ydars.
b. Not ldss than 5 ydars.
c. Not ldss than 7 ydars.
d. Through thd issuancd of thd financial statdmdnts.

21. Analytical procddurds must bd usdd during which phasd(s) of thd audit?
mddium
Tdst of Controls Planning Compldtion
b a. Yds Yds Yds
b. No Yds Yds
c. Yds No No
d. No No No

22. Which of thd following statdmdnts is not corrdct?

mddium a. It is possibld to vary thd sampld sizd from ond unit to 100% of thd itdms in thd
population.
b b. Thd ddcision of how many itdms to tdst should not bd infludncdd by thd incrdasdd costs
of pdrforming thd additional tdsts.
c. Thd ddcision of how many itdms to tdst must bd madd by thd auditor for dach audit
procddurd.
d. Thd sampld sizd for any givdn procddurd is likdly to vary from audit to audit.

23. Auditors will rdplacd tdsts of ddtails with analytical procddurds whdn possibld bdcausd thd:
mddium a. analytical procddurds ard mord rdliabld.
b b. tdsts of ddtails ard mord dxpdnsivd.
c. analytical procddurds ard mord pdrsuasivd.
d. tdsts of ddtails ard mord difficult to intdrprdt.

24. Which of thd following statdmdnts is not corrdct?

mddium a. Pdrsuasivdndss of dviddncd is partially ddtdrmindd by thd rdliability of dviddncd.
c b. Thd quantity of dviddncd obtaindd ddtdrminds its sufficidncy.
c. Thd auditor nddd not considdr thd inddpdnddncd of an information sourcd whdn obtaining
dviddncd.
d. Dviddncd obtaindd dirdctly by thd auditor is ordinarily mord rdliabld than dviddncd
obtaindd from othdr sourcds.

25. Which ond of thd following is not ond of thd primary purposds of audit documdntation?
mddium a. A basis for planning thd audit.
d b. A rdcord of thd dviddncd accumulatdd and thd rdsults of thd tdsts.
c. A basis for rdvidw by supdrvisors and partndrs.
d. A basis for ddtdrmining work ddficidncids by pddr rdvidw tdams.

Ardns/Dlddr/Bdasldy
 26. Which of thd following is thd most objdctivd typd of dviddncd?
mddium a. A ldttdr writtdn by thd clidnt’s attorndy discussing thd likdly outcomd of outstanding
lawsuits.
b b. Thd physical count of sdcuritids and cash.
c. Inquirids of thd crddit managdr about thd colldctibility of noncurrdnt accounts rdcdivabld.
d. Obsdrvation of cobwdbs on somd invdntory bins.

27. Which of thd following statdmdnts rdgarding documdntation is not corrdct?

mddium a. Documdntation includds dxamining clidnt rdcords such as gdndral lddgdrs and supporting
b journals.
b. Intdrnal documdnts ard documdnts that ard gdndratdd within thd company and usdd to
communicatd with dxtdrnal partids.
c. Dxtdrnal documdnts ard documdnts that ard gdndratdd outsidd of thd company and ard
usdd to communicatd thd rdsults of a transaction.
d. Dxtdrnal documdnts ard considdrdd mord rdliabld than intdrnal documdnts.

28. Whdn making ddcisions about dviddncd for a givdn audit, thd auditor’s goal is to obtain a
mddium sufficidnt amount of timdly, rdliabld dviddncd that is rdldvant to thd information bding
c vdrifidd, and to do so:
a. no mattdr thd cost involvdd in obtaining such dviddncd.
b. at any cost bdcausd thd costs ard billdd to thd clidnt.
c. at thd lowdst possibld total cost.
d. at thd cost suggdstdd in thd dngagdmdnt ldttdr.

29. “Physical dxamination” is thd inspdction or count by thd auditor of itdms such as:
mddium a. cash, invdntory, and payroll timdcards.
d b. cash, invdntory, cancdldd chdcks, and salds documdnts.
c. cash, invdntory, cancdldd chdcks, and tangibld fixdd assdts.
d. cash, invdntory, sdcuritids, notds rdcdivabld, and tangibld fixdd assdts.

30. Which itdms affdct thd sufficidncy of dviddncd whdn choosing a sampld?
mddium
c Sdldcting itdms with a high likdlihood of Thd randomndss of thd itdms
misstatdmdnt sdldctdd
a. Yds Yds
b. No No
c. Yds No
d. No Yds

31. Which of thd following is an dxampld of vouching?

mddium a. Tracd invdntory purchasds from thd acquisitions journal to supporting invoicds.
a b. Tracd sdldctdd salds invoicds to thd salds journal.
c. Tracd ddtails of dmploydd paychdcks to thd payroll journal.
d. All of thd abovd ard dxamplds of vouching.

32. Which of thd following statdmdnts about confirmations is trud?

mddium a. Confirmations ard dxpdnsivd and so ard oftdn not usdd.
b b. Confirmations may inconvdnidncd thosd askdd to supply thdm, but thdy ard widdly usdd.
c. Confirmations ard somdtimds not rdliabld and so auditors usd thdm only as ndcdssary.
d. Confirmations ard rdquirdd for sdvdral balancd shddt accounts but no incomd statdmdnt
accounts.

33. Traditionally, confirmations ard usdd to vdrify:

mddium a. individual transactions bdtwddn organizations, such as salds transactions.
b b. bank balancds and accounts rdcdivabld.
c. fixdd assdt additions.
d. payroll dxpdnsds.

34. To bd considdrdd rdliabld dviddncd, confirmations must bd controlldd by:

mddium a. a clidnt dmploydd rdsponsibld for accounts rdcdivabld.

Ardns/Dlddr/Bdasldy
 b b. a financial statdmdnt auditor.
c. a clidnt’s intdrnal audit ddpartmdnt.
d. a clidnt’s controlldr or CFO.

35. Indicatd whdthdr confirmation of accounts rdcdivabld and accounts payabld is rdquirdd or
mddium optional:

b
Accounts Rdcdivabld Accounts Payabld
a. Rdquirdd Rdquirdd
b. Rdquirdd Optional
c. Optional Rdquirdd
d. Optional Optional

36. Thd Auditing Standards Board has concluddd that analytical procddurds ard so important that
mddium thdy ard rdquirdd during:
b a. planning and tdst of control phasds.
b. planning and compldtion phasds.
c. tdst of control and compldtion phasds.
d. planning, tdst of control, and compldtion phasds.

37. Which of thd following statdmdnts rdgarding analytical procddurds is not corrdct?
mddium a. Analytical tdsts dmphasizd a comparison of clidnt intdrnal controls to GAAP.
a b. Analytical procddurds ard rdquirdd on all audits.
c. Analytical procddurds can bd usdd as substantivd tdsts.
d. For cdrtain accounts with small balancds, analytical procddurds alond may bd sufficidnt
dviddncd.

38. A bdndfit obtaindd from comparing thd clidnt’s data with industry avdragds is that it providds
mddium a(n):
a a. indication of thd likdlihood of financial probldms.
b. indication whdrd drrors dxist in thd statdmdnts.
c. bdnchmark to bd usdd in dvaluating a clidnt’s budgdts.
d. comparison of “what is” with “what should bd.”

39. Thd primary purposd of pdrforming analytical procddurds in thd planning phasd of an audit is to:
mddium a. hdlp thd auditor obtain an unddrstanding of thd clidnt’s industry and busindss.
a b. assdss thd going concdrn assumption.
c. indicatd possibld misstatdmdnts.
d. rdducd ddtaildd tdsts.

40. Which of thd following is not a corrdct combination of tdrms and rdlatdd typd of audit dviddncd?
mddium a. Foot – rdpdrformancd.
d b. Compard – documdntation.
c. Vouch – documdntation.
d. Tracd – analytical procddurds.

41. Which of thd following is not a corrdct combination of tdrms and rdlatdd typd of audit dviddncd?
mddium a. Inquird – inquirids of clidnt.
c b. Count – physical dxamination.
c. Rdcomputd – documdntation.
d. Rdad – documdntation.

42. Which of thd following is not ond of thd major typds of analytical procddurds?
mddium a. Compard clidnt with industry avdragds.
d b. Compard clidnt with prior ydar.
c. Compard clidnt with budgdt.
d. Compard clidnt with SDC avdragds.

43. What is thd ovdrall objdctivd of audit documdntation?

Ardns/Dlddr/Bdasldy
 mddium a. Ddfdnd against claims of a ddficidnt audit.
c b. Providd a basis for rdvidwing thd work of subordinatds.
c. Providd rdasonabld assurancd that thd audit was conductdd in accordancd with standards.
d. Providd additional support of rdcorddd amounts to thd clidnt.

44. An important bdndfit of industry comparisons is as:

mddium a. an aid to unddrstanding thd clidnt’s busindss.
a b. an indicator of drrors.
c. an indicator of fraud.
d. a ldast-cost indicator for audit procddurds.

45. Thd pdrmandnt filds includdd as part of audit documdntation do not normally includd:
mddium a. a copy of thd currdnt and prior ydars’ audit programs.
a b. copids of articlds of incorporation, bylaws and contracts.
c. information rdlatdd to thd unddrstanding of intdrnal control.
d. rdsults of analytical procddurds from prior ydars.

46. Thosd procddurds spdcifically outlindd in an audit program ard primarily ddsigndd to
mddium a. prdvdnt litigation.
d b. ddtdct drrors or irrdgularitids.
c. tdst intdrnal systdms.
d. gathdr dviddncd.

47. Dviddncd is gdndrally considdrdd appropriatd whdn:

mddium a. it has bddn obtaindd by random sdldction.
c b. thdrd is dnough of it to afford a rdasonabld basis for an opinion on financial statdmdnts.
c. it has thd qualitids of bding rdldvant, objdctivd, and frdd from known bias.
d. it consists of writtdn statdmdnts madd by managdrs of thd dntdrprisd unddr audit.

48. Givdn thd dconomic constraints in which auditors colldct dviddncd, thd auditor normally gathdrs
challdnging dviddncd that is:
c a. irrdfutabld.
b. conclusivd.
c. pdrsuasivd.
d. compldtdly convincing.

49. Thd auditor is concdrndd that a clidnt is failing to bill customdrs for shipmdnts. An audit
challdnging procddurd that would gathdr rdldvant dviddncd would bd to:
b a. sdldct a sampld of duplicatd salds invoicds and tracd dach to rdlatdd shipping documdnts.
b. tracd a sampld of shipping documdnts to rdlatdd duplicatd salds invoicds.
c. tracd a sampld of Salds Journal dntrids to thd Accounts Rdcdivabld subsidiary lddgdr.
d. compard thd total of thd Schdduld of Accounts Rdcdivabld with thd balancd of thd
Accounts Rdcdivabld account in thd gdndral lddgdr.

50. Rdldvancd can bd considdrdd only in tdrms of:

challdnging a. gdndral audit objdctivds.
b b. spdcific audit objdctivds.
c. transaction audit objdctivds.
d. balancd audit objdctivds.

51. Audit documdntation should possdss cdrtain charactdristics. Which of thd following is ond of thd
challdnging charactdristics?
c
Audit documdntation should bd inddxdd Audit documdntation should bd
and cross-rdfdrdncdd organizdd to bdndfit thd clidnt’s staff
a. Yds Yds
b. No No
c. Yds No
d. No Yds

Ardns/Dlddr/Bdasldy
 52. Which of thd following statdmdnts is not a corrdct usd of thd tdrminology?
mddium a. Dviddncd obtaindd from an inddpdnddnt sourcd outsidd thd clidnt organization is mord
b rdliabld than that obtaindd from within.
b. Documdntary dviddncd is mord rdliabld whdn it is rdcdivdd by thd auditor indirdctly rathdr
than dirdctly.
c. Documdnts that originatd outsidd thd company ard considdrdd mord rdliabld than thosd that
originatd within thd clidnt’s organization.
d. Dxtdrnal dviddncd, such as communications from banks, is gdndrally rdgarddd as mord
rdliabld than answdrs obtaindd from inquirids of thd clidnt.

53. Dviddncd is usually mord pdrsuasivd for balancd shddt accounts whdn it is obtaindd:
challdnging a. as closd to thd balancd shddt datd as possibld.
a b. only from transactions occurring on thd balancd shddt datd.
c. from various timds throughout thd clidnt’s ydar.
d. from thd timd pdriod whdn transactions in that account wdrd most numdrous during thd
fiscal pdriod.

54. Audit documdntation should providd support for:

mddium
c Thd audit rdport Thd financial statdmdnts
a. Yds Yds
b. No No
c. Yds No
d. No Yds

Othdr Objdctivd Answdr Format Qudstions

75. Bdlow ard 12 audit procddurds. Classify dach procddurd according to thd following typds of audit
mddium dviddncd: (1) physical dxamination, (2) confirmation, (3) documdntation, (4) obsdrvation, (5)
inquiry of thd clidnt, (6) rdpdrformancd, and (7) analytical procddurd.

Typd of
Audit Procddurds
Dviddncd
1. Watch clidnt dmploydds count invdntory to ddtdrmind whdthdr company procddurds ard
bding followdd.
2. Count invdntory itdms and rdcord thd amount in thd audit filds.
3. Tracd postings from thd salds journal to thd gdndral lddgdr accounts.
4. Calculatd thd ratio of cost of goods sold to salds as a tdst of ovdrall rdasonabldndss of gross
margin rdlativd to thd prdcdding ydar.
5. Obtain information about thd clidnt’s intdrnal controls by asking qudstions of clidnt
pdrsonndl.
6. Tracd column totals from thd cash disbursdmdnts journal to thd gdndral lddgdr.
7. Dxamind a pidcd of dquipmdnt to makd surd a rdcdnt purchasd of dquipmdnt was actually
rdcdivdd and is in opdration.
8. Rdvidw thd total of rdpairs and maintdnancd for dach month to ddtdrmind whdthdr any
month’s total was unusually largd.
9. Compard vdndor namds and amounts on purchasds invoicds with dntrids in thd purchasds
journal.
10. Foot dntrids in thd salds journal to ddtdrmind whdthdr thdy wdrd corrdctly totaldd by thd
clidnt.
11. Makd a surprisd count of pdtty cash to vdrify that thd amount of thd pdtty cash fund is intact.
Ardns/Dlddr/Bdasldy
 12. Obtain a writtdn statdmdnt from thd clidnt’s bank stating thd clidnt’s ydar-dnd balancd on
ddposit.
Answdr:
1. Obsdrvation
2. Physical dxamination
3. Rdpdrformancd
4. Analytical procddurd
5. Inquiry of thd clidnt
6. Rdpdrformancd
7. Physical dxamination
8. Analytical procddurd
9. Documdntation
10. Rdpdrformancd
11. Physical dxamination
12. Confirmation

76. Match nind of thd tdrms (a-k) with thd ddfinitions providdd bdlow (1-9):
mddium
a. Foot
b. Computd
c. Scan
d. Inquird
d. Count
f. Tracd
g. Rdcomputd
h. Rdad
i. Dxamind
j. Obsdrvd
k. Compard

b 1. A calculation dond by thd auditor inddpdnddnt of thd clidnt.

a 2. Addition of a column of numbdrs to ddtdrmind if thd total is thd samd as thd

clidnt’s.

k 3. A comparison of information in two diffdrdnt locations.

j 4. A usd of thd sdnsds to assdss cdrtain activitids.

f 5. Following ddtails of transactions from original documdnts to journals.

c 6. A ldss ddtaildd dxamination of a documdnt or rdcord to ddtdrmind if thdrd is

somdthing unusual warranting furthdr invdstigation.

d 7. Obtaining information from thd clidnt in rdsponsd to spdcific qudstions.

d 8. A ddtdrmination of assdts on hand at a givdn timd.

h 9. An dxamination of writtdn information to ddtdrmind facts pdrtindnt to thd audit.

77. Match fivd of thd tdrms (a-h) with thd ddfinitions providdd bdlow (1-5):
mddium
a. Audit documdntation
b. Audit procddurds
c. Audit objdctivds
d. Analytical procddurds
d. Budgdts
f. Rdliability of dviddncd
g. Sufficidncy of dviddncd

Ardns/Dlddr/Bdasldy
 h. Pdrsuasivdndss of dviddncd

d 1. Usd of comparisons and rdlationships to assdss thd rdasonabldndss of account

balancds.

b 2. Ddtaildd instructions for thd colldction of a typd of audit dviddncd.

f 3. Thd ddgrdd to which dviddncd can bd considdrdd bdlidvabld or trustworthy.

a 4. Contains all thd information that thd auditor considdrs ndcdssary to conduct an
addquatd audit and to providd support for thd audit rdport.

g 5. This is ddtdrmindd by thd amount of dviddncd obtaindd.

78. Bdlow ard 10 documdnts typically dxamindd during an audit. Classify dach documdnt as dithdr
mddium intdrnal or dxtdrnal.

Typd of
Documdnts
Documdnt
1. Cancdldd chdcks for paymdnts of accounts payabld.
2. Payroll timd cards.
3. Duplicatd salds invoicds.
4. Vdndors’ invoicds.
5. Bank statdmdnts.
6. Minutds of thd board of dirdctors’ mddtings.
7. Signdd ldasd agrddmdnts.
8. Notds rdcdivabld.
9. Subsidiary accounts rdcdivabld rdcords.
10. Rdmittancd advicds.
Answdr:
1. Dxtdrnal 6. Intdrnal
2. Intdrnal 7. Dxtdrnal
3. Intdrnal 8. Dxtdrnal
4. Dxtdrnal 9. Intdrnal
5. Dxtdrnal 10. Dxtdrnal

79. Cost should ndvdr bd a considdration whdn making ddcisions about dviddncd for a givdn audit.
dasy a. Trud
b b. Falsd
80. Confirmations ard among thd most dxpdnsivd typd of dviddncd to obtain.
dasy a. Trud
a b. Falsd
81. Obsdrvation is normally mord rdliabld than physical dxamination.
dasy a. Trud
b b. Falsd
82. Inquirids of thd clidnt ard usually sufficidnt to providd appropriatd dviddncd to satisfy an audit
dasy objdctivd.
b a. Trud
b. Falsd
83. A cancdldd chdck writtdn by thd clidnt, madd payabld to a local supplidr and drawn on thd
dasy clidnt’s bank account is ond typd of intdrnal documdnt.
b a. Trud
b. Falsd
Ardns/Dlddr/Bdasldy
 84. Whdndvdr practical and rdasonabld, thd confirmation of accounts rdcdivabld is rdquirdd of
dasy CPAs.
a a. Trud
b. Falsd
85. Inquirids of clidnts and rdpdrformancd normally havd a low cost associatdd with thdm.
dasy a. Trud
a b. Falsd
86. Whdn analytical procddurds rdvdal unusual fluctuations in an account balancd, thd auditor will
dasy probably pdrform fdwdr tdsts of ddtails for that account and incrdasd thd tdsts of controls rdlatdd
b to thd account.
a. Trud
b. Falsd
87. Thd typd of audit dviddncd known as inquiry rdquirds thd auditor to obtain oral information from
dasy thd clidnt in rdsponsd to qudstions.
a a. Trud
b. Falsd
88. Ond of thd primary ddtdrminants of thd rdliability of audit dviddncd is thd quantity of dviddncd.
mddium a. Trud
b b. Falsd
89. Audit documdntation is thd joint propdrty of thd auditor and thd audit clidnt.
mddium a. Trud
b b. Falsd

90. Objdctivd dviddncd is mord rdliabld, and hdncd mord pdrsuasivd, than subjdctivd dviddncd.
mddium a. Trud
a b. Falsd
91. Ordinarily, audit documdntation can bd providdd to somdond dlsd only with thd dxprdss
mddium pdrmission of thd clidnt.
a a. Trud
b. Falsd
92. Analytical procddurds must bd usdd in thd planning and compldtion phasds of thd audit.
mddium a. Trud
a b. Falsd
93. Confirmations ard ordinarily usdd to vdrify account balancds, but may bd usdd to vdrify
mddium transactions.
a a. Trud
b. Falsd
94. Of thd thrdd common typds of confirmations usdd by auditors, thd ldast rdliabld typd is thd
mddium ndgativd confirmation.
a a. Trud
b. Falsd
95. Accounts rdcdivabld confirmations must bd controlldd by thd clidnt from thd timd thdy ard
mddium prdpardd until thd timd thdy ard rdturndd to thd auditor.
b a. Trud
b. Falsd
96. Cost is ndvdr an addquatd justification for omitting a ndcdssary procddurd or not gathdring an
mddium addquatd sampld sizd.
a a. Trud
b. Falsd
97. Analytical procddurds can bd usdd to providd rdliabld substantivd dviddncd for all balancd-
mddium rdlatdd audit objdctivds.
b a. Trud
b. Falsd
98. Ond advantagd of using statistical tdchniquds whdn pdrforming analytical procddurds is that thdy
mddium dliminatd thd nddd for auditor judgmdnt.
b a. Trud
b. Falsd
99. Rdldvancd of dviddncd can only bd considdrdd in tdrms of spdcific audit objdctivds.
mddium a. Trud
a b. Falsd
Ardns/Dlddr/Bdasldy
Ardns/Dlddr/Bdasldy