1. The valuation or allocation assertion relevant to inventory is more important than the rights and obligation assertion.

True

False

2.Sawa Inc. a fitness company has been faced with some opportunities as well as some challenges within the past 3 years. As a result of a malfunction in its best-selling exercise machine, there have been several casualties reported. Additionally, Sawa Inc. has reported record growth due to the invention of a new fitness machine, which is scheduled to be released in a year. The invention of the new fitness machine is a potential indicator of a going concern problem.

True

False

3.The auditor is more concerned with contingencies that existed before the end of the audit field work than contingencies that existed at the balance sheet date.

True

False

4.Reviewing the ratio of depreciation expense to repairs and maintenance is an example of an effective analytical procedure.

True

False

5.Auditors use checklists because checklists provide satisfaction that the client has performed what it is required to perform.

True

False