TRUE-FALSE QUESTIONS

1. Because management estimates are often subjective, the auditor does not need to test these estimates, but can rely solely on management’s work.

2. When testing management estimates, the auditor should understand the process that management uses to develop its estimates.

3. When relying on the work of a specialist, the auditor should evaluate the professional qualifications of the specialist.

4. When the auditor uses the work of a specialist, the auditor’s responsibility for the audit opinion is reduced.

5. The auditor may be able to use generalized audit software to identify transactions that have been entered into with related parties.

6. A primary concern for the auditor for related-party transactions is whether undisclosed related-party relationships and transactions exist.

7. The auditor should document significant issues that were identified and how they were resolved.

8. As part of the audit documentation, auditors should maintain copies of all client documents reviewed during the audit.

9. A standardized audit program, without any modifications, should be used for each client.

10. An audit program can be used to record the audit work performed and identify those responsible for performing the work.