14) A vendor's invoice received and held by the client would be considered what type of evidence?ĭ) Written representation C) External-internal 15) Which of the following statements is generally correct about the appropriateness of audit evidence?Ī) Auditors' direct personal knowledge, obtained through observation and inspection, is of higher quality than information obtained indirectly from independent outside sources.ī) To be reliable, audit evidence must be either valid or relevant, but need not be both.Ĭ) Client accounting data alone may be considered sufficient appropriate audit evidence to issue an unmodified opinion on client financial statements.ĭ) Appropriateness of audit evidence refers to the amount of corroborative evidence to be obtained. C) An auditor on the engagement owns a financial interest in the stock of the client. 13) Which of the following would most likely be a violation of the independence requirement found in the responsibilities principle under generally accepted auditing standards?Ī) An auditor on the engagement has a distant relative who is employed by a vendor that does a significant amount of business with clients.ī) The client's Chief Executive Officer graduated from the same university as the partner in charge of the accounting firm.Ĭ) An auditor on the engagement owns a financial interest in the stock of the client.ĭ) The client provides financial support to a number of charitable causes that also receive support from the accounting firm. A) Planning 12) Which of the following procedures would provide the most reliable audit evidence?Ī) Inquiries of the client's accounting staff held in privateī) Inspection of pre-numbered client shipping documentsĬ) Inspection of bank statements obtained directly from the client's financial institutionĭ) Analytical procedures performed by auditors on the client's trial balance C) Inspection of bank statements obtained directly from the client's financial institutions. In all cases where an auditor's name is associated with financial statements, the auditor should clearly indicate the character of the auditor's work, if any, and the degree of responsibility the auditor is taking, in the auditor's report.11) The preparation of an audit plan prior to the beginning of field work is appropriately considered documentation ofĭ) quality assurance. When the auditor cannot express an overall opinion, the auditor should state the reasons in the auditor's report. The auditor's report must either express an opinion regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed. ![]() If the auditor determines that informative disclosures in the financial statements are not reasonably adequate, the auditor must so state in the auditor's report.The auditor must identify in the auditor's report those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period.The auditor must state in the auditor's report whether the financial statements are presented in accordance with generally accepted accounting principles.
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