AUDITING II PRACTICE EXAM QUESTIONS AND
ANSWERS
1) In the auditing process
A) the types and amounts of evidence remain constant from audit to audit.
B) the criteria for evaluating information will not vary depending on the information
being audited.
C) the audit report communicates the auditor's findings to users.
D) records are gathered by the auditor to determine whether the audited information is
stated in accordance with SEC standards.
Answer: C
2) Which of the following is considered audit evidence?
A)
Oral statements Written Auditor
made by Communications Observation
management
Y N N
B)
Oral statements Written Auditor
made by Communications Observation
management
N Y Y
C)
Oral statements Written Auditor
made by Communications Observation
management
Y Y Y
D)
Oral statements Written Auditor
made by Communications Observation
management
N N Y
Answer: C
, 3) Which of the following can be used as a criteria for evaluating information being audited?
A) International Financial Reporting Standards (IFRS)
B) Generally Accepted Accounting Principles (GAAP)
C) Internal Revenue Code (IRC)
D) all of the
above Answer: D
4) Evidence is paramount to audit and attestation engagements. List the four basic types of
audit evidence.
Answer: The four types of audit and attestation evidence include
1. Electronic and documentary data about transactions
2. Written and electronic communications with outsiders
3. Observations by the auditor
4. Oral testimony of the auditee
5) The criteria by which an auditor evaluates the information under audit may vary with
the information being audited.
Answer: TRUE
6) One criteria used by an external auditor to evaluate published financial statements is known
as generally accepted auditing standards.
Answer: FALSE
7) Auditors strive to maintain a high level of independence to keep the confidence of
users relying on their reports.
Answer: TRUE
8) To perform an audit, there must be information in a verifiable form and some criteria
by which the auditor can evaluate the information.
Answer: TRUE
9) An auditor must be competent and have an independent mental
attitude.
Answer: TRUE
10) Recording, classifying, and summarizing economic events in a logical manner for the
purpose of providing financial information for decision making is commonly called
A) finance.
B) auditing.
C) accounting.
D) economics.
Answer: C
11) An accountant
A) must possess expertise in the accumulation of audit evidence.
B) must decide the number and types of items to test.
C) must have an understanding of the principles and rules that provide the basis for preparing
ANSWERS
1) In the auditing process
A) the types and amounts of evidence remain constant from audit to audit.
B) the criteria for evaluating information will not vary depending on the information
being audited.
C) the audit report communicates the auditor's findings to users.
D) records are gathered by the auditor to determine whether the audited information is
stated in accordance with SEC standards.
Answer: C
2) Which of the following is considered audit evidence?
A)
Oral statements Written Auditor
made by Communications Observation
management
Y N N
B)
Oral statements Written Auditor
made by Communications Observation
management
N Y Y
C)
Oral statements Written Auditor
made by Communications Observation
management
Y Y Y
D)
Oral statements Written Auditor
made by Communications Observation
management
N N Y
Answer: C
, 3) Which of the following can be used as a criteria for evaluating information being audited?
A) International Financial Reporting Standards (IFRS)
B) Generally Accepted Accounting Principles (GAAP)
C) Internal Revenue Code (IRC)
D) all of the
above Answer: D
4) Evidence is paramount to audit and attestation engagements. List the four basic types of
audit evidence.
Answer: The four types of audit and attestation evidence include
1. Electronic and documentary data about transactions
2. Written and electronic communications with outsiders
3. Observations by the auditor
4. Oral testimony of the auditee
5) The criteria by which an auditor evaluates the information under audit may vary with
the information being audited.
Answer: TRUE
6) One criteria used by an external auditor to evaluate published financial statements is known
as generally accepted auditing standards.
Answer: FALSE
7) Auditors strive to maintain a high level of independence to keep the confidence of
users relying on their reports.
Answer: TRUE
8) To perform an audit, there must be information in a verifiable form and some criteria
by which the auditor can evaluate the information.
Answer: TRUE
9) An auditor must be competent and have an independent mental
attitude.
Answer: TRUE
10) Recording, classifying, and summarizing economic events in a logical manner for the
purpose of providing financial information for decision making is commonly called
A) finance.
B) auditing.
C) accounting.
D) economics.
Answer: C
11) An accountant
A) must possess expertise in the accumulation of audit evidence.
B) must decide the number and types of items to test.
C) must have an understanding of the principles and rules that provide the basis for preparing
