1) Generally accepted auditing standards recognize two categories of evidential matter: underlying accounting data and corroborating information....
Question:
1) Generally accepted auditing standards recognize two categories of evidential matter: underlying accounting data and corroborating information. In making an audit in accordance with generally accepted auditing standards,
A. Both categories are required.
B. Corroborating information is required, while underlying accounting data may be gathered under certain circumstances.
C. The auditor may choose the category to use, and omit the other.
D. Underlying accounting data must be gathered, while corroborating information need only be obtained when accounting records are not reliable.
2) The risk that the auditor will NOT detect a material misstatement that exists in an assertion is
A. Inherent risk.
B. Control risk.
C. Detection risk.
D. Audit risk
3) The susceptibility of an assertion to a material misstatement, assuming there are no controls, is
A. Analytical procedures risk.
B. Audit risk.
C. Inherent risk.
D. Control risk.
4) Before accepting an engagement, the auditor should evaluate whether other conditions exist that raise questions as to the prospective client’s audit ability. Which of the following factors would be least likely to cause concern about an entity’s audit ability?
A. Disregard of responsibility to maintain adequate internal controls
B. Related party transactions
C. Important evidence available only in electronic form
D. Lack of audit trail
5) In a normal audit, the relationship between the level of materiality used to plan the engagement and the level of materiality used to evaluate evidence is that
A. The former is higher than the latter.
B. They must be identical.
C. The former is lower than the latter.
D. The former may be higher or lower than the latter.
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley