AUDIT EXAM PREPARATION TEST BANK
WITH CORRECT ANSWERS
●● The assertion related to recording transactions in the correct
accounting period is:
completeness.
accuracy.
cutoff.
occurrence.
Answer: cutoff
●● A detailed listing of the specific audit procedures to be used to gather
evidence for an account is called the:
permanent file.
audit program.
audit strategy.
accounting records.
Answer: audit program.
●● The quantity of evidence that an auditor will gather:
,depends on the size of the audit team.
varies with the assessed risk of material misstatement.
is the same for most audits because it has to be appropriate.
is the same for clients in the same industry.
Answer: varies with the assessed risk of material misstatement.
●● Which is generally the most reliable form of evidence?
Externally generated evidence held by the client.
Externally generated evidence sent directly to the auditor.
Internally generated evidence from the client's IT system.
Internally generated evidence based on discussions with upper
management.
Answer: Externally generated evidence sent directly to the auditor.
●● An external confirmation sent to a bank:
requests information about the bank balances and loan amounts.
requests information about interest rates paid on deposits and charged on
loans.
is relevant to the audit of interest revenue and expense.
All of these answer choices are correct.
, Answer: All of these answer choices are correct.
●● When an auditor inspects a tangible asset to support a balance in the
client's records, the auditor is gathering evidence to support the:
completeness assertion.
valuation and allocation assertion.
rights and obligations assertion.
existence assertion.
Answer: existence assertion.
●● When an auditor inspects loan documentation and traces the details
to recording in the client's records, the auditor is gathering evidence to
support the:
completeness assertion.
rights and obligations assertion.
existence assertion.
valuation and allocation assertion.
Answer: completeness assertion
●● Which audit procedure is being used when an auditor checks the
calculations in a client-prepared spreadsheet?
WITH CORRECT ANSWERS
●● The assertion related to recording transactions in the correct
accounting period is:
completeness.
accuracy.
cutoff.
occurrence.
Answer: cutoff
●● A detailed listing of the specific audit procedures to be used to gather
evidence for an account is called the:
permanent file.
audit program.
audit strategy.
accounting records.
Answer: audit program.
●● The quantity of evidence that an auditor will gather:
,depends on the size of the audit team.
varies with the assessed risk of material misstatement.
is the same for most audits because it has to be appropriate.
is the same for clients in the same industry.
Answer: varies with the assessed risk of material misstatement.
●● Which is generally the most reliable form of evidence?
Externally generated evidence held by the client.
Externally generated evidence sent directly to the auditor.
Internally generated evidence from the client's IT system.
Internally generated evidence based on discussions with upper
management.
Answer: Externally generated evidence sent directly to the auditor.
●● An external confirmation sent to a bank:
requests information about the bank balances and loan amounts.
requests information about interest rates paid on deposits and charged on
loans.
is relevant to the audit of interest revenue and expense.
All of these answer choices are correct.
, Answer: All of these answer choices are correct.
●● When an auditor inspects a tangible asset to support a balance in the
client's records, the auditor is gathering evidence to support the:
completeness assertion.
valuation and allocation assertion.
rights and obligations assertion.
existence assertion.
Answer: existence assertion.
●● When an auditor inspects loan documentation and traces the details
to recording in the client's records, the auditor is gathering evidence to
support the:
completeness assertion.
rights and obligations assertion.
existence assertion.
valuation and allocation assertion.
Answer: completeness assertion
●● Which audit procedure is being used when an auditor checks the
calculations in a client-prepared spreadsheet?
