The auditor must determine and apply an appropriate materiality level throughout the audit. The auditor must obtain sufficient appropriate evidence about whether material misstatements exist. The auditor must express an opinion in accordance with the auditor's findings. The auditor must plan the work and properly supervise any assistants. B Which of the following is not a concept from the performance principle under generally accepted auditing standards? Implicitly represented in the auditors' standard report.Įxplicitly represented in the introductory paragraph of the auditors' standard report.Įxplicitly represented in the scope paragraph of the auditors' standard report.Įxplicitly represented in the opinion paragraph of the auditors' standard report. D The auditors' responsibility to express an opinion on the financial statements is Reliability of audit evidence refers to the amount of corroborative evidence obtained.Īn effective system of internal control provides more assurance about the reliability of audit evidence. To be reliable, audit evidence should be convincing rather than persuasive. Information obtained indirectly from outside sources is the most reliable form of audit evidence. C Which of the following presumptions is correct about the reliability of audit evidence? Originates outside of the client's system but has been received and processed by the client.Ĭonsists of documents that are produced, used, and stored within the client's information system.Ĭonsists of representations made by the client's officers, directors, owners, and employees. Is obtained directly from third parties independent of the client. The auditors' opinion on the fairness of the financial statements B Internal evidence Standards of the PCAOB: Introductory only GAAP: All paragraphs A Which of the following is not included in the auditors' standard report representing an unmodified opinion?Ī brief indication of the responsibility of auditors and management for the financial statementsĪn indication that all appropriate disclosures have been made and included in the financial statementsĪn indication that the audit was conducted in accordance with standards established by the PCAOB Standards of the PCAOB: Introductory and scope GAAP: Opinion only Standards of the PCAOB: Introductory only GAAP: Scope and opinion Standards of the PCAOB: Scope only GAAP: Opinion only A The standard auditors' report refers to standards of the PCAOB and GAAP in which paragraph? To be reliable, audit evidence must be either valid or relevant, but need not be both.Ĭlient accounting data alone may be considered sufficient appropriate audit evidence to issue an unmodified opinion on client financial statements.Īppropriateness of audit evidence refers to the amount of corroborative evidence to be obtained. Written representation C Which of the following statements is generally correct about the appropriateness of audit evidence?Īuditors' direct personal knowledge, obtained through observation and inspection, is of higher quality than information obtained indirectly from independent outside sources. C A vendor's invoice received and held by the client would be considered what type of evidence? The client provides financial support to a number of charitable causes that also receive support from the accounting firm. The client's Chief Executive Officer graduated from the same university as the partner in charge of the accounting firm.Īn auditor on the engagement owns a financial interest in the stock of the client. Inspection of bank statements obtained directly from the client's financial institutionĪnalytical procedures performed by auditors on the client's trial balance C Which of the following would most likely be a violation of the independence requirement found in the responsibilities principle under generally accepted auditing standards?Īn auditor on the engagement has a distant relative who is employed by a vendor that does a significant amount of business with clients. Inspection of prenumbered client shipping documents Inquiries of the client's accounting staff held in private A Which of the following procedures would provide the most reliable audit evidence? The preparation of an audit plan prior to the beginning of fieldwork is appropriately considered documentation of
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