AUDITING & ASSURANCE SERVICES 4TH
CANADIAN EDITION EXAM REVIEW 2026
UPDATED QUESTIONS AND VERIFIED
ANSWERS COMPLETE GUIDE
◉ b. In addition to confirmations of accounts receivable, auditors
perform an analysis of the aging of accounts receivable to evaluate
the collectability of accounts receivable.
Answer: Which of the following is most closely related to the
relevance of audit evidence?
a. Auditors decide to physically inspect investment securities held by
a custodian instead of obtaining confirmations from the custodian.
b. In addition to confirmations of accounts receivable, auditors
perform an analysis of the aging of accounts receivable to evaluate
the collectability of accounts receivable.
c. In response to less effective internal control, auditors increase the
number of customer accounts receivable confirmations mailed
compared to that in the prior year.
,d. Because of a large number of transactions occurring near year-
end, auditors decide to confirm a larger number of receivables
following year-end instead of during the interim period
◉ a. Auditors are required to prepare a written audit plan during the
planning stages of initial audits but are not required to do so in
continuing audits.
Written audit plans are required in both initial and continuing
audits.
Answer: Which of the following statements is not true with respect
to the performance principle?
a. Auditors are required to prepare a written audit plan during the
planning stages of initial audits but are not required to do so in
continuing audits.
b. Audit teams consider materiality in planning the audit,
performing the audit, and evaluating the effect of misstatements on
the entity's financial statements.
c. In assessing the risk of material misstatements, the audit team
considers the effectiveness of the entity's internal controls in
preventing and detecting misstatements.
, d. Auditors are required to consider both the relevance and the
reliability of evidence in evaluating whether the evidence they have
gathered is appropriate.
◉ b. PCAOB inspections review a sample of audits conducted by
firms as well as the firm's systems of quality control.
Answer: Which of the following is true with respect to PCAOB
inspections of accounting firms?
a. All firms performing audits of public companies are required to
have annual inspections conducted by the PCAOB.
b. PCAOB inspections review a sample of audits conducted by firms
as well as the firm's systems of quality control.
c. All results of PCAOB inspections are made available to the public
following the inspection.
d. Firms performing audits of 100 or fewer public entities may elect
to have a peer review conducted through the AICPA in lieu of a
PCAOB inspection.
◉ a. Audit procedures
CANADIAN EDITION EXAM REVIEW 2026
UPDATED QUESTIONS AND VERIFIED
ANSWERS COMPLETE GUIDE
◉ b. In addition to confirmations of accounts receivable, auditors
perform an analysis of the aging of accounts receivable to evaluate
the collectability of accounts receivable.
Answer: Which of the following is most closely related to the
relevance of audit evidence?
a. Auditors decide to physically inspect investment securities held by
a custodian instead of obtaining confirmations from the custodian.
b. In addition to confirmations of accounts receivable, auditors
perform an analysis of the aging of accounts receivable to evaluate
the collectability of accounts receivable.
c. In response to less effective internal control, auditors increase the
number of customer accounts receivable confirmations mailed
compared to that in the prior year.
,d. Because of a large number of transactions occurring near year-
end, auditors decide to confirm a larger number of receivables
following year-end instead of during the interim period
◉ a. Auditors are required to prepare a written audit plan during the
planning stages of initial audits but are not required to do so in
continuing audits.
Written audit plans are required in both initial and continuing
audits.
Answer: Which of the following statements is not true with respect
to the performance principle?
a. Auditors are required to prepare a written audit plan during the
planning stages of initial audits but are not required to do so in
continuing audits.
b. Audit teams consider materiality in planning the audit,
performing the audit, and evaluating the effect of misstatements on
the entity's financial statements.
c. In assessing the risk of material misstatements, the audit team
considers the effectiveness of the entity's internal controls in
preventing and detecting misstatements.
, d. Auditors are required to consider both the relevance and the
reliability of evidence in evaluating whether the evidence they have
gathered is appropriate.
◉ b. PCAOB inspections review a sample of audits conducted by
firms as well as the firm's systems of quality control.
Answer: Which of the following is true with respect to PCAOB
inspections of accounting firms?
a. All firms performing audits of public companies are required to
have annual inspections conducted by the PCAOB.
b. PCAOB inspections review a sample of audits conducted by firms
as well as the firm's systems of quality control.
c. All results of PCAOB inspections are made available to the public
following the inspection.
d. Firms performing audits of 100 or fewer public entities may elect
to have a peer review conducted through the AICPA in lieu of a
PCAOB inspection.
◉ a. Audit procedures
