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WorksheetsAudit Documentation
Total questions: 20
Worksheet time: 10mins
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
Which of the following is an example of objective evidence?
Inquiries of the credit manager about the collectibility of noncurrent accounts receivable
Observation of cobwebs on some inventory bins
The physical count of securities and cash
A letter written by client's attorney discussing the likely outcome of outstanding lawsuits
Which of the following statements regarding documentation is not correct?
Documentation includes examining client records such as general ledgers and supporting journals
External documents are documents that are generated outside of the company and are used to communicate the results of a transaction
Internal documents are documents that are generated within the company and used to communicate with external parties.
All of the above are correct statements.
What is the overall objective of audit documentation?
Provide a basis for reviewing the work of subordinates.
Defend against claims of a deficient audit.
Provide reasonable assurance that the audit was conducted in accordance with standards.
None of the above.
The permanent files included as part of audit documentation do not normally include:
a copy of the current and prior years' audit programs.
copies of articles of incorporation, bylaws and contracts.
results of analytical procedures from prior years.
information related to the understanding of internal control.
Those procedures specifically outlined in an audit program are primarily designed to
test internal systems
gather evidence
detect errors or irregularities
prevent litigation
Relevance can be considered only in terms of:
specific audit objectives
general audit objectives
balance audit objectives
transaction audit objectives.
Audit documentation should possess certain characteristics. Which of the following is not one of the important characteristics?
Audit documentation should be indexed and cross-referenced.
Audit files should be properly identified.
Audit documentation should clearly indicate the audit work performed
All of the above are essential characteristics
Which of the following statements is not correct concerning audit documentation?
Audit documentation is the primary frame of reference used by supervisory personnel to evaluate the sufficiency of evidence.
The only time anyone has a legal right to examine audit documentation is when the documentation is subpoenaed by a court as legal evidence
Audit documentation is merely required to defend against claims that the auditor performed a deficient audit.
All of the above are incorrect statements
A common comparison occurs when the auditor calculates the expected balance and compares it with the actual balance. The auditor's expected account balance may be determined by:
using industry standards
inquiry of the client
relating it to some other balance sheet or income statement account or accounts
using Dun and Bradstreet reports
Most auditors would consider samples to be insufficient if they contain only the
largest dollar items from the population
largest dollar items from a population, even though these items make up a large portion of the total population
items that are representative of the population
items with a high likelihood of misstatement
