Audit Documentation

Audit procedures may be performed:

• throughout the period being audited with emphasis on the transactions near the end.

• shortly after the close of the period being audited.

• early in the accounting period being audited.

• during all three of the above periods.

When auditors use documents to support recorded transactions, the process is often called:

• physical examination.

• confirmation

• vouching.

• inquiry.

An example of an external document is:

• purchase order for company purchases

• employees' time reports

• carbon copies of checks

• bank statements

A document which the auditor receives from the client, but which was prepared by someone outside the client's organization, is a(n):

• confirmation.

• inquiry

• external document

• internal document

Which of the following forms of evidence would be least persuasive in forming the auditor's opinion?

• Minutes of the board of directors authorizing the purchase of stock as an investment.

• Correspondence with a stockbroker regarding the quantity of client's investments held in street name by the broker.

• The auditor's count of marketable securities

• Responses to auditor's questions by the president and controller regarding the investments account.

Sarbanes-Oxley requires auditors of public companies to maintain audit documentation for what period of time?

• Not less than 5 years

• Not less than 3 years

• Not less than 7 years

• None of the above.

Sarbanes-Oxley has ________ the amount of audit documentation that must be retained for audits of public companies.

• significantly increased

• dramatically reduced

• had little effect on

• slightly increased

Which of the following statements is not correct?

• It is possible to vary the sample size from one unit to 100% of the items in the population.

• The decision of how many items to test will not be influenced by the increased costs of performing the additional tests.

• The sample size for any given procedure is likely to vary from audit to audit.

• The decision of how many items to test must be made by the auditor for each audit procedure.

"The detailed description of the results of the four evidence decisions for a specific audit" is recorded on an:

• audit dictionary

• audit program

• audit procedure

• audit guide

Which one of the following is not one of the primary purposes of audit documentation?

• A basis for determining work deficiencies by peer review teams.

• A basis for review by supervisors and partners

• A basis for planning the audit.

• A record of the evidence accumulated and the results of the tests