Professional Documents
Culture Documents
Quiz Chapter 7
Quiz Chapter 7
4. Assertion about account balances at period end which means assets, liabilities, and
equity interests are included in the financial statements at appropriate amounts is
a. Existence c. Completeness
b. Rights and obligations d. Valuation and allocation
6. You have been assigned to audit the maintenance department of an organization. Which of the
following is likely to produce the least reliable audit evidence?
a. Notes on discussions with mechanics in the maintenance operation.
b. A schedule comparing actual maintenance expenses with budgeted expenses and those of the
prior period and disclosing important differences.
8. Before applying substantive tests to the details of asset accounts at an interim date, an auditor
should assess
a. Control risk at below the maximum level.
b. Inherent risk at the maximum level.
c. The difficulty in controlling the incremental audit risk.
d. Materiality for the accounts tested as insignificant.
9. It means the materials prepared by and for, or obtained and retained by the auditor
in connection with the performance of the audit.
a. Documentation c. Engagement letter
b. Audit evidence d. Audit report
12. Audit working papers are indexed by means of reference numbers. The primary purpose of
indexing is to
a. Permit cross-referencing and simplify supervisory review.
b. Support the audit report.
c. Eliminate the need for follow-up reviews.
d. Determine that working papers adequately support findings, conclusions, and reports.
13. The audit working paper that reflects the major components of an amount reported in
the financial statements is the
a. Interbank transfer schedule c. Supporting schedule
b. Carryforward schedule d. Lead schedule
14. An auditor ordinarily uses a working trial balance resembling the financial statements
without footnotes, but containing columns for
a. Cash flow increases and decreases c. Reclassifications and adjustments
b. Audit objectives and assertions d. Reconciliations and tickmarks
15. Working papers which contain information relating primarily to the audit of a single period.
a. Current audit files c. Financial reporting files
b. Permanent audit files d. Correspondence files