Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
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Question
Chapter 6, Problem 12CYBK
To determine
Introduction: Audit evidence is proof that an auditor tries to seek from an organization in order to claim that the assertions related to financial transactions are correct.
The statement which is untrue regarding substantive analytical procedure.
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Which of the following statements is true?
Select one:
a. If evidence is subjective, it cannot be reliable
b. Evidence must be relevant to all of the audit objectives
c.
Evidence obtained directly by the auditor may not be reliable if the auditor lacks the qualifications to evaluate the evidence.
d. The persuasiveness of evidence can be evaluated after considering its sufficiency
Which of the following statements is false regardingsubstantiveanalytical procedures?a. Substantive analytical procedures are not required tobe performed on all audit engagements.b. If the results of substantive analytical proceduressuggest that an account balance is materially correct,the auditor can reduce the evidence needed fromtests of details.c. The auditor would perform substantive analyticalprocedures after tests of details.d. All of the above statements are true.
Which of the following statements is incorrect regarding the reliability of audit evidence?
a. While internal audit evidence is considered to be acceptable, the auditor usually prefers audit evidence form external sources.
b. Oral representation by the client management is not a valid evidence.
c. The effectiveness of accounting and internal control adds to the reliability of internal evidence.
d. Audit evidence obtained directly by the auditor is more reliable than that one provided by the client.
Chapter 6 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
Ch. 6 - Prob. 1CYBKCh. 6 - Prob. 2CYBKCh. 6 - Prob. 3CYBKCh. 6 - Which of the following statements is true...Ch. 6 - Prob. 5CYBKCh. 6 - Prob. 6CYBKCh. 6 - Prob. 7CYBKCh. 6 - Prob. 8CYBKCh. 6 - Prob. 9CYBKCh. 6 - Prob. 10CYBK
Ch. 6 - Prob. 11CYBKCh. 6 - Prob. 12CYBKCh. 6 - Prob. 13CYBKCh. 6 - Prob. 14CYBKCh. 6 - Prob. 15CYBKCh. 6 - Prob. 16CYBKCh. 6 - Prob. 17CYBKCh. 6 - Prob. 18CYBKCh. 6 - Prob. 19CYBKCh. 6 - Prob. 20CYBKCh. 6 - Prob. 1RQSCCh. 6 - Prob. 2RQSCCh. 6 - Prob. 3RQSCCh. 6 - Prob. 4RQSCCh. 6 - Refer to Exhibit 6.2 and describe the differences...Ch. 6 - Prob. 6RQSCCh. 6 - Prob. 7RQSCCh. 6 - Prob. 8RQSCCh. 6 - Prob. 10RQSCCh. 6 - Prob. 11RQSCCh. 6 - Prob. 12RQSCCh. 6 - Prob. 13RQSCCh. 6 - Prob. 14RQSCCh. 6 - Prob. 15RQSCCh. 6 - Indicate how the auditor could use substantive...Ch. 6 - Prob. 17RQSCCh. 6 - Prob. 18RQSCCh. 6 - Prob. 19RQSCCh. 6 - Prob. 20RQSCCh. 6 - Prob. 21RQSCCh. 6 - Prob. 22RQSCCh. 6 - Prob. 23RQSCCh. 6 - Prob. 24RQSCCh. 6 - Prob. 25RQSCCh. 6 - Prob. 26RQSCCh. 6 - Prob. 27RQSCCh. 6 - Prob. 28RQSCCh. 6 - Prob. 29FFCh. 6 - Prob. 30FFCh. 6 - Prob. 31FFCh. 6 - Prob. 32FFCh. 6 - Prob. 33FFCh. 6 - MINISCRIBE (LO 1, 2) As reported in the Wall...
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Similar questions
- Why might an auditor issue a disclaimer of opinion after an audit? A. All of these may cause an auditor to issue a disclaimer of opinion B. There is a scope limitation that prevented a complete audit C. The auditor is not independent D. There other issues that prevented the completeness of auarrow_forwardFrom the options given below which of the following is not the reason of inherent limitation of audit? a. Limitation in accounting system O b. Use of human judgment O c. Poor planning O d. Human errorsarrow_forwardWhich of the following characteristics is not considered essential to good audit evidence? a. Excessive audit evidence b. Sufficiency of evidence c. Relevance of evidence d. Reliability of evidencearrow_forward
- Which of the following statements concerning audit evidence is true?(1) To be appropriate, audit evidence should be either persuasive or relevant, butneed not be reliable.(2) The measure of the quantity and quality of audit evidence lies in the auditor’sjudgment.(3) The difficulty and expense of obtaining audit evidence concerning an accountbalance is a valid basis for omitting the test.(4) A client’s accounting records can be sufficient audit evidence to support thefinancial statements.arrow_forwardWhich among the following is the most important limitation of an audit, which result in most of the audit evidence while the auditor draws conclusions? a. Management and others do not provide complete information intentionally/ unintentionally b. Auditor’s opinion is mostly persuasive rather than conclusive. c. Audit is not an official investigation into alleged wrongdoings d. The occurrence of non-compliance with laws and regulationsarrow_forwardWhich of the following case, an audit opinion with unqualified Report with Modified Wording will be issued? 1) Auditor doubt about the going concern assumption is valid 2) Auditor think the financial statements are materially misstated 3) Lack of consistent application of GAAP 4) The auditor is unable to obtain sufficient appropriate evidence a. 3 and 4 b. 2 and 4 c. 1 and 3 d. 1 andarrow_forward
- Which of the following is correct about audit opinion? a. It does not assure the future viability of the entity b. It does not assure about the audit procedures c. It does assure the future viability of the entity d. It does assure the efficiency of the managementarrow_forwardWhich statement is false? a. If control risk is assessed as low, the auditor cannot plan on relying on the controls to increase substantive procedures for account balances. b. The auditor will not perform tests of controls; instead, the auditor must plan for substantive procedures, without relying on the client's internal controls. c. Based on obtaining an understanding through risk assessment procedures, the auditor assesses control risk ranging from high (weak controls) to low (strong controls). d. Assessing control risk as high means the auditor does not have confidence that internal controls will prevent or detect material misstatements; assessing control risk as low has the opposite implication.arrow_forwardWhich of the following does NOT describe sufficient appropriate audit evidence? O appropriateness relates to the quality of evidence O the quality of evidence affects the quantity required O sufficiency relates to the quantity of evidence O the sufficiency of evidence is a matter of professional scepticismarrow_forward
- Which of the following situations will not result in modification of the auditor's report because of a scope limitation? * O Inadequacy in the accounting records. O Restriction imposed by the client. Inability to obtain sufficient appropriate evidential matter. Reliance placed on the report of another auditor.arrow_forwardWhich of the following is not true a. Inherent risk and control risk are assessed by the auditor and function independently of the financial statement audit b. Inherent risk is inversely related to the amount of audit evidence whereas detection risk is directly related to the amount of audit evidence required c. Inherent risk is directly related to evidence whereas detection risk is inversely related to the amount of audit evidence required d. Inherent risk is the susceptibility of the financial statements to material error, assuming no internal controlsarrow_forwardwhich of the following is correct about the appropriateness of evidence? A. Audit evidence from external sources is more relevant than evidence generated internallyB. Audit evidence is more persuasive when items of evidence from different sources or of different nature are not consistentC. Audit evidence generated internally is more reliable when the related accounting and internal control systems are effectiveD. Sufficiency refers to the amount of evidence neededarrow_forward
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