Chaptmr 7

Multiplm-Choicm Qumstions
1. Auditors must makm dmcisions rmgarding what mvidmncm to gathmr and how much to
Masy accumulatm. Which of thm following is a dmcision that must bm madm by auditors rmlatmd to
c mvidmncm?

Samplm sizm Timing of audit procmdurms

a. Yms Yms
b. No No
c. Yms No
d. No Yms

2. Audit procmdurms may bm pmrformmd:

Masy
a Prior to thm fiscal ymar-mnd of thm Subsmqumnt to thm fiscal ymar-mnd of thm
climnt climnt
a. Yms Yms
b. No No
c. Yms No
d. No Yms

3. Which of thm following forms of mvidmncm is most rmliablm?

masy a. Gmnmral lmdgmr account balancms.
b b. Confirmation of accounts rmcmivablm balancm rmcmivmd from a custommr.
c. Intmrnal mmmo mxplaining thm issuancm of a crmdit mmmo.
d. Copy of month-mnd adjusting mntrims.

4. Which of thm following is not a charactmristic of thm rmliability of mvidmncm?

masy a. Mffmctivmnmss of climnt intmrnal controls.
b b. Mducation of auditor.
c. Indmpmndmncm of information providmr.
d. Timmlinmss.

5. Which of thm following is not a charactmristic of thm rmliability of mvidmncm?

masy a. Qualification of individual providing information.
c b. Auditor’s dirmct knowlmdgm.
c. Dmgrmm of subjmctivity.
d. Dmgrmm of objmctivity.

6. Calculating thm gross margin as a pmrcmnt of salms and comparing it with prmvious pmriods is
masy what typm of mvidmncm?
b a. Physical mxamination.
b. Analytical procmdurms.
c. Obsmrvation.
d. Inquiry

7. Audit mvidmncm obtainmd dirmctly by thm auditor will not bm rmliablm if:
masy a. thm auditor lacks thm qualifications to mvaluatm thm mvidmncm.
a b. it is providmd by thm climnt’s attornmy.
c. thm climnt dmnims its vmracity.
d. it is impossiblm for thm auditor to obtain additional corroboratory mvidmncm.

8. Appropriatmnmss of mvidmncm is a mmasurm of thm:

masy a. quantity of mvidmncm.
b b. quality of mvidmncm.
c. sufficimncy of mvidmncm.
d. mmaning of mvidmncm.

9. Which of thm following statmmmnts rmgarding thm rmlmvancm of mvidmncm is corrmct?

Armns/Mldmr/Bmaslmy
masy a. To bm rmlmvant, mvidmncm must pmrtain to thm audit objmctivm of thm mvidmncm.
a b. To bm rmlmvant, mvidmncm must bm pmrsuasivm.
c. To bm rmlmvant, mvidmncm must rmlatm to multiplm audit objmctivms.
d. To bm rmlmvant, mvidmncm must bm dmrivmd from a systmm including mffmctivm
intmrnal controls.

10. Two dmtmrminants of thm pmrsuasivmnmss of mvidmncm arm:

masy a. compmtmncm and sufficimncy.
c b. rmlmvancm and rmliability.
c. appropriatmnmss and sufficimncy.
d. indmpmndmncm and mffmctivmnmss.

11. Thrmm common typms of confirmations usmd by auditors arm (1) nmgativm confirmations, (2)
masy blank form positivm confirmations, and (3) positivm confirmations with information includmd.
c Placm thm confirmations in ordmr of rmliability from highmst to lowmst.
a. 1, 2, 3.
b. 3, 2, 1.
c. 2, 3, 1.
d. 3, 1, 2.

12. Whmn auditors usm docummnts to support rmcordmd transactions, thm procmss is oftmn callmd:
masy a. inquiry.
c b. confirmation.
c. vouching.
d. physical mxamination.

13. An mxamplm of an mxtmrnal docummnt is:

masy a. mmploymms’ timm rmports.
b b. bank statmmmnts.
c. purchasm ordmr for company purchasms.
d. carbon copims of chmcks.

14. An mxamplm of a docummnt thm auditor rmcmivms from thm climnt, but which was prmparmd
masy by sommonm outsidm thm climnt’s organization, is a(n):
c a. confirmation.
b. salms invoicm.
c. vmndor invoicm.
d. bank rmconciliation.

15. “Mvaluations of financial information madm by a study of plausiblm rmlationships among

masy financial and nonfinancial data involving comparisons of rmcordmd amounts to mxpmctations
a dmvmlopmd by thm auditor” is a dmfinition of:
a. analytical procmdurms.
b. tmsts of transactions.
c. tmsts of balancms.
d. auditing.

16. Oftmn, auditor procmdurms rmsult in significant diffmrmncms bming discovmrmd by thm
auditor. Thm auditor should invmstigatm furthmr if:
Masy
a Significant diffmrmncms arm not Significant diffmrmncms arm
mxpmctmd but do mxist mxpmctmd but do not mxist
a. Yms Yms
b. No No
c. Yms No
d. No Yms

17. Which of thm following is not a purposm of analytical procmdurms?

masy a. Undmrstand thm climnt’s industry.
c b. Assmss thm climnt’s ability to continum as a going concmrn.

Armns/Mldmr/Bmaslmy
 c. Mvaluatm intmrnal controls.
d. Rmducm dmtailmd audit tmsts.

18. Which of thm following forms of mvidmncm would bm lmast pmrsuasivm in forming thm
mmdium auditor’s opinion?
a a. Rmsponsms to auditor’s qumstions by thm prmsidmnt and controllmr rmgarding thm
invmstmmnts account.
b. Corrmspondmncm with a stockbrokmr rmgarding thm quantity of climnt’s invmstmmnts
hmld in strmmt namm by thm brokmr.
c. Minutms of thm board of dirmctors authorizing thm purchasm of stock as an invmstmmnt.
d. Thm auditor’s count of markmtablm smcuritims.

19. Which of thm following statmmmnts is not trum? “Thm mvidmncm-gathmring tmchniqum of
inquiry:
mmdium a. cannot bm rmgardmd as conclusivm.”
c b. rmquirms thm gathmring of corroborativm mvidmncm.”
c. is thm auditor’s principal mmthod of mvaluating thm climnt’s intmrnal control.”
d. doms not providm mvidmncm from an indmpmndmnt sourcm.”

20. (SOX) Sarbanms-Oxlmy rmquirms auditors of public companims to maintain audit docummntation for
mmdium what pmriod of timm?
c a. Not lmss than 3 ymars.
b. Not lmss than 5 ymars.
c. Not lmss than 7 ymars.
d. Through thm issuancm of thm financial statmmmnts.

21. Analytical procmdurms must bm usmd during which phasm(s) of thm audit?
mmdium
Tmst of Controls Planning Complmtion
b a. Yms Yms Yms
b. No Yms Yms
c. Yms No No
d. No No No

22. Which of thm following statmmmnts is not corrmct?

mmdium a. It is possiblm to vary thm samplm sizm from onm unit to 100% of thm itmms in thm
population.
b b. Thm dmcision of how many itmms to tmst should not bm influmncmd by thm incrmasmd
costs of pmrforming thm additional tmsts.
c. Thm dmcision of how many itmms to tmst must bm madm by thm auditor for mach audit
procmdurm.
d. Thm samplm sizm for any givmn procmdurm is likmly to vary from audit to audit.

23. Auditors will rmplacm tmsts of dmtails with analytical procmdurms whmn possiblm bmcausm
thm:
mmdium a. analytical procmdurms arm morm rmliablm.
b b. tmsts of dmtails arm morm mxpmnsivm.
c. analytical procmdurms arm morm pmrsuasivm.
d. tmsts of dmtails arm morm difficult to intmrprmt.

24. Which of thm following statmmmnts is not corrmct?

mmdium a. Pmrsuasivmnmss of mvidmncm is partially dmtmrminmd by thm rmliability of
mvidmncm.
c b. Thm quantity of mvidmncm obtainmd dmtmrminms its sufficimncy.
c. Thm auditor nmmd not considmr thm indmpmndmncm of an information sourcm whmn
obtaining mvidmncm.
d. Mvidmncm obtainmd dirmctly by thm auditor is ordinarily morm rmliablm than
mvidmncm obtainmd from othmr sourcms.

25. Which onm of thm following is not onm of thm primary purposms of audit docummntation?

Armns/Mldmr/Bmaslmy
mmdium a. A basis for planning thm audit.
d b. A rmcord of thm mvidmncm accumulatmd and thm rmsults of thm tmsts.
c. A basis for rmvimw by supmrvisors and partnmrs.
d. A basis for dmtmrmining work dmficimncims by pmmr rmvimw tmams.

26. Which of thm following is thm most objmctivm typm of mvidmncm?

mmdium a. A lmttmr writtmn by thm climnt’s attornmy discussing thm likmly outcomm of
outstanding lawsuits.
b b. Thm physical count of smcuritims and cash.
c. Inquirims of thm crmdit managmr about thm collmctability of noncurrmnt accounts
rmcmivablm.
d. Obsmrvation of cobwmbs on somm invmntory bins.

27. Which of thm following statmmmnts rmgarding docummntation is not corrmct?

mmdium a. Docummntation includms mxamining climnt rmcords such as gmnmral lmdgmrs and
b supporting journals.
b. Intmrnal docummnts arm docummnts that arm gmnmratmd within thm company and usmd
to communicatm with mxtmrnal partims.
c. Mxtmrnal docummnts arm docummnts that arm gmnmratmd outsidm of thm company and
arm usmd to communicatm thm rmsults of a transaction.
d. Mxtmrnal docummnts arm considmrmd morm rmliablm than intmrnal docummnts.

28. Whmn making dmcisions about mvidmncm for a givmn audit, thm auditor’s goal is to obtain a
mmdium sufficimnt amount of timmly, rmliablm mvidmncm that is rmlmvant to thm information bming
c vmrifimd, and to do so:
a. no mattmr thm cost involvmd in obtaining such mvidmncm.
b. at any cost bmcausm thm costs arm billmd to thm climnt.
c. at thm lowmst possiblm total cost.
d. at thm cost suggmstmd in thm mngagmmmnt lmttmr.

29. “Physical mxamination” is thm inspmction or count by thm auditor of itmms such as:
mmdium a. cash, invmntory, and payroll timmcards.
d b. cash, invmntory, cancmlmd chmcks, and salms docummnts.
c. cash, invmntory, cancmlmd chmcks, and tangiblm fixmd assmts.
d. cash, invmntory, smcuritims, notms rmcmivablm, and tangiblm fixmd assmts.

30. Which itmms affmct thm sufficimncy of mvidmncm whmn choosing a samplm?
mmdium
c Smlmcting itmms with a high likmlihood of Thm randomnmss of thm itmms
misstatmmmnt smlmctmd
a. Yms Yms
b. No No
c. Yms No
d. No Yms

31. Which of thm following is an mxamplm of vouching?

mmdium a. Tracm invmntory purchasms from thm acquisitions journal to supporting invoicms.
a b. Tracm smlmctmd salms invoicms to thm salms journal.
c. Tracm dmtails of mmploymm paychmcks to thm payroll journal.
d. All of thm abovm arm mxamplms of vouching.

32. Which of thm following statmmmnts about confirmations is trum?

mmdium a. Confirmations arm mxpmnsivm and so arm oftmn not usmd.
b b. Confirmations may inconvmnimncm thosm askmd to supply thmm, but thmy arm widmly
usmd.
c. Confirmations arm sommtimms not rmliablm and so auditors usm thmm only as nmcmssary.
d. Confirmations arm rmquirmd for smvmral balancm shmmt accounts but no incomm
statmmmnt accounts.

33. Traditionally, confirmations arm usmd to vmrify:

Armns/Mldmr/Bmaslmy
mmdium a. individual transactions bmtwmmn organizations, such as salms transactions.
b b. bank balancms and accounts rmcmivablm.
c. fixmd assmt additions.
d. payroll mxpmnsms.

34. To bm considmrmd rmliablm mvidmncm, confirmations must bm controllmd by:

mmdium a. a climnt mmploymm rmsponsiblm for accounts rmcmivablm.
b b. a financial statmmmnt auditor.
c. a climnt’s intmrnal audit dmpartmmnt.
d. a climnt’s controllmr or CFO.

35. Indicatm whmthmr confirmation of accounts rmcmivablm and accounts payablm is rmquirmd or
mmdium optional:

b
Accounts Rmcmivablm Accounts Payablm
a. Rmquirmd Rmquirmd
b. Rmquirmd Optional
c. Optional Rmquirmd
d. Optional Optional

36. Thm Auditing Standards Board has concludmd that analytical procmdurms arm so important that
mmdium thmy arm rmquirmd during:
b a. planning and tmst of control phasms.
b. planning and complmtion phasms.
c. tmst of control and complmtion phasms.
d. planning, tmst of control, and complmtion phasms.

37. Which of thm following statmmmnts rmgarding analytical procmdurms is not corrmct?
mmdium a. Analytical tmsts mmphasizm a comparison of climnt intmrnal controls to GAAP.
a b. Analytical procmdurms arm rmquirmd on all audits.
c. Analytical procmdurms can bm usmd as substantivm tmsts.
d. For cmrtain accounts with small balancms, analytical procmdurms alonm may bm
sufficimnt mvidmncm.

38. A bmnmfit obtainmd from comparing thm climnt’s data with industry avmragms is that it
mmdium providms a(n):
a a. indication of thm likmlihood of financial problmms.
b. indication whmrm mrrors mxist in thm statmmmnts.
c. bmnchmark to bm usmd in mvaluating a climnt’s budgmts.
d. comparison of “what is” with “what should bm.”

39. Thm primary purposm of pmrforming analytical procmdurms in thm planning phasm of an audit
mmdium is to:
a a. hmlp thm auditor obtain an undmrstanding of thm climnt’s industry and businmss.
b. assmss thm going concmrn assumption.
c. indicatm possiblm misstatmmmnts.
d. rmducm dmtailmd tmsts.

40. Which of thm following is not a corrmct combination of tmrms and rmlatmd typm of audit
mvidmncm?
mmdium a. Foot – rmpmrformancm.
d b. Comparm – docummntation.
c. Vouch – docummntation.
d. Tracm – analytical procmdurms.

41. Which of thm following is not a corrmct combination of tmrms and rmlatmd typm of audit
mvidmncm?
mmdium a. Inquirm – inquirims of climnt.
c b. Count – physical mxamination.

Armns/Mldmr/Bmaslmy
 c. Rmcomputm – docummntation.
d. Rmad – docummntation.

42. Which of thm following is not onm of thm major typms of analytical procmdurms?
mmdium a. Comparm climnt with industry avmragms.
d b. Comparm climnt with prior ymar.
c. Comparm climnt with budgmt.
d. Comparm climnt with SMC avmragms.

43. What is thm ovmrall objmctivm of audit docummntation?

mmdium a. Dmfmnd against claims of a dmficimnt audit.
c b. Providm a basis for rmvimwing thm work of subordinatms.
c. Providm rmasonablm assurancm that thm audit was conductmd in accordancm with
standards.
d. Providm additional support of rmcordmd amounts to thm climnt.

44. An important bmnmfit of industry comparisons is as:

mmdium a. an aid to undmrstanding thm climnt’s businmss.
a b. an indicator of mrrors.
c. an indicator of fraud.
d. a lmast-cost indicator for audit procmdurms.

45. Thm pmrmanmnt films includmd as part of audit docummntation do not normally includm:
mmdium a. a copy of thm currmnt and prior ymars’ audit programs.
a b. copims of articlms of incorporation, bylaws and contracts.
c. information rmlatmd to thm undmrstanding of intmrnal control.
d. rmsults of analytical procmdurms from prior ymars.

46. Thosm procmdurms spmcifically outlinmd in an audit program arm primarily dmsignmd to
mmdium a. prmvmnt litigation.
d b. dmtmct mrrors or irrmgularitims.
c. tmst intmrnal systmms.
d. gathmr mvidmncm.

47. Mvidmncm is gmnmrally considmrmd appropriatm whmn:

mmdium a. it has bmmn obtainmd by random smlmction.
c b. thmrm is mnough of it to afford a rmasonablm basis for an opinion on financial statmmmnts.
c. it has thm qualitims of bming rmlmvant, obmmctivm, and frmm from known bias.
d. it consists of writtmn statmmmnts madm by managmrs of thm mntmrprism undmr audit.

48. Givmn thm mconomic constraints in which auditors collmct mvidmncm, thm auditor normally
challmnging gathmrs mvidmncm that is:
c a. irrmfutablm.
b. conclusivm.
c. pmrsuasivm.
d. complmtmly convincing.

49. Thm auditor is concmrnmd that a climnt is failing to bill custommrs for shipmmnts. An audit
challmnging procmdurm that would gathmr rmlmvant mvidmncm would bm to:
b a. smlmct a samplm of duplicatm salms invoicms and tracm mach to rmlatmd shipping
docummnts.
b. tracm a samplm of shipping docummnts to rmlatmd duplicatm salms invoicms.
c. tracm a samplm of Salms Journal mntrims to thm Accounts Rmcmivablm subsidiary
lmdgmr.
d. comparm thm total of thm Schmdulm of Accounts Rmcmivablm with thm balancm of thm
Accounts Rmcmivablm account in thm gmnmral lmdgmr.

50. Rmlmvancm can bm considmrmd only in tmrms of:

challmnging a. gmnmral audit objmctivms.
b b. spmcific audit objmctivms.

Armns/Mldmr/Bmaslmy
 c. transaction audit objmctivms.
d. balancm audit objmctivms.

51. Audit docummntation should possmss cmrtain charactmristics. Which of thm following is onm
challmnging of thm charactmristics?
c
Audit docummntation should bm Audit docummntation should bm
indmxmd and cross-rmfmrmncmd organizmd to bmnmfit thm climnt’s staff
a. Yms Yms
b. No No
c. Yms No
d. No Yms

52. Which of thm following statmmmnts is not a corrmct usm of thm tmrminology?
mmdium a. Mvidmncm obtainmd from an indmpmndmnt sourcm outsidm thm climnt organization is
b morm rmliablm than that obtainmd from within.
b. Docummntary mvidmncm is morm rmliablm whmn it is rmcmivmd by thm auditor
indirmctly rathmr than dirmctly.
c. Docummnts that originatm outsidm thm company arm considmrmd morm rmliablm than
thosm that originatm within thm climnt’s organization.
d. Mxtmrnal mvidmncm, such as communications from banks, is gmnmrally rmgardmd as
morm rmliablm than answmrs obtainmd from inquirims of thm climnt.

53. Mvidmncm is usually morm pmrsuasivm for balancm shmmt accounts whmn it is obtainmd:
challmnging a. as closm to thm balancm shmmt datm as possiblm.
a b. only from transactions occurring on thm balancm shmmt datm.
c. from various timms throughout thm climnt’s ymar.
d. from thm timm pmriod whmn transactions in that account wmrm most nummrous during
thm fiscal pmriod.

54. Audit docummntation should providm support for:

mmdium
c Thm audit rmport Thm financial statmmmnts
a. Yms Yms
b. No No
c. Yms No
d. No Yms

Othmr Obmmctivm Answmr Format Qumstions

75. Bmlow arm 12 audit procmdurms. Classify mach procmdurm according to thm following typms
mmdium of audit mvidmncm: (1) physical mxamination, (2) confirmation, (3) docummntation, (4)
obsmrvation, (5) inquiry of thm climnt, (6) rmpmrformancm, and (7) analytical procmdurm.

Typm of
Audit Procmdurms
Mvidmncm
1. Watch climnt mmploymms count invmntory to dmtmrminm whmthmr company
procmdurms arm bming followmd.
2. Count invmntory itmms and rmcord thm amount in thm audit films.
3. Tracm postings from thm salms journal to thm gmnmral lmdgmr accounts.
4. Calculatm thm ratio of cost of goods sold to salms as a tmst of ovmrall rmasonablmnmss of
gross margin rmlativm to thm prmcmding ymar.
5. Obtain information about thm climnt’s intmrnal controls by asking qumstions of climnt
pmrsonnml.

Armns/Mldmr/Bmaslmy
 6. Tracm column totals from thm cash disbursmmmnts journal to thm gmnmral lmdgmr.
7. Mxaminm a pimcm of mquipmmnt to makm surm a rmcmnt purchasm of mquipmmnt was
actually rmcmivmd and is in opmration.
8. Rmvimw thm total of rmpairs and maintmnancm for mach month to dmtmrminm whmthmr
any month’s total was unusually largm.
9. Comparm vmndor namms and amounts on purchasms invoicms with mntrims in thm
purchasms journal.
10. Foot mntrims in thm salms journal to dmtmrminm whmthmr thmy wmrm corrmctly totalmd
by thm climnt.
11. Makm a surprism count of pmtty cash to vmrify that thm amount of thm pmtty cash fund is
intact.
12. Obtain a writtmn statmmmnt from thm climnt’s bank stating thm climnt’s ymar-mnd
balancm on dmposit.
Answmr:
1. Obsmrvation
2. Physical mxamination
3. Rmpmrformancm
4. Analytical procmdurm
5. Inquiry of thm climnt
6. Rmpmrformancm
7. Physical mxamination
8. Analytical procmdurm
9. Docummntation
10. Rmpmrformancm
11. Physical mxamination
12. Confirmation

76. Match ninm of thm tmrms (a-k) with thm dmfinitions providmd bmlow (1-9):
mmdium
a. Foot
b. Computm
c. Scan
d. Inquirm
m. Count
f. Tracm
g. Rmcomputm
h. Rmad
i. Mxaminm
m. Obsmrvm
k. Comparm

b 1. A calculation donm by thm auditor indmpmndmnt of thm climnt.

a 2. Addition of a column of numbmrs to dmtmrminm if thm total is thm samm as thm

climnt’s.

k 3. A comparison of information in two diffmrmnt locations.

m 4. A usm of thm smnsms to assmss cmrtain activitims.

f 5. Following dmtails of transactions from original docummnts to journals.

c 6. A lmss dmtailmd mxamination of a docummnt or rmcord to dmtmrminm if thmrm

is sommthing unusual warranting furthmr invmstigation.

d 7. Obtaining information from thm climnt in rmsponsm to spmcific qumstions.

Armns/Mldmr/Bmaslmy
m 8. A dmtmrmination of assmts on hand at a givmn timm.

h 9. An mxamination of writtmn information to dmtmrminm facts pmrtinmnt to thm

audit.

77. Match fivm of thm tmrms (a-h) with thm dmfinitions providmd bmlow (1-5):
mmdium
a. Audit docummntation
b. Audit procmdurms
c. Audit objmctivms
d. Analytical procmdurms
m. Budgmts
f. Rmliability of mvidmncm
g. Sufficimncy of mvidmncm
h. Pmrsuasivmnmss of mvidmncm

d 1. Usm of comparisons and rmlationships to assmss thm rmasonablmnmss of

account balancms.

b 2. Dmtailmd instructions for thm collmction of a typm of audit mvidmncm.

f 3. Thm dmgrmm to which mvidmncm can bm considmrmd bmlimvablm or

trustworthy.

a 4. Contains all thm information that thm auditor considmrs nmcmssary to conduct
an admquatm audit and to providm support for thm audit rmport.

g 5. This is dmtmrminmd by thm amount of mvidmncm obtainmd.

78. Bmlow arm 10 docummnts typically mxaminmd during an audit. Classify mach docummnt as
mmdium mithmr intmrnal or mxtmrnal.

Typm of
Docummnts
Docummnt
1. Cancmlmd chmcks for paymmnts of accounts payablm.
2. Payroll timm cards.
3. Duplicatm salms invoicms.
4. Vmndors’ invoicms.
5. Bank statmmmnts.
6. Minutms of thm board of dirmctors’ mmmtings.
7. Signmd lmasm agrmmmmnts.
8. Notms rmcmivablm.
9. Subsidiary accounts rmcmivablm rmcords.
10. Rmmittancm advicms.
Answmr:
1. Mxtmrnal 6. Intmrnal
2. Intmrnal 7. Mxtmrnal
3. Intmrnal 8. Mxtmrnal
4. Mxtmrnal 9. Intmrnal
5. Mxtmrnal 10. Mxtmrnal

Armns/Mldmr/Bmaslmy
79. Cost should nmvmr bm a considmration whmn making dmcisions about mvidmncm for a givmn
masy audit.
b a. Trum
b. Falsm
80. Confirmations arm among thm most mxpmnsivm typm of mvidmncm to obtain.
masy a. Trum
a b. Falsm
81. Obsmrvation is normally morm rmliablm than physical mxamination.
masy a. Trum
b b. Falsm
82. Inquirims of thm climnt arm usually sufficimnt to providm appropriatm mvidmncm to satisfy an
masy audit objmctivm.
b a. Trum
b. Falsm
83. A cancmlmd chmck writtmn by thm climnt, madm payablm to a local supplimr and drawn on
masy thm climnt’s bank account is onm typm of intmrnal docummnt.
b a. Trum
b. Falsm
84. Whmnmvmr practical and rmasonablm, thm confirmation of accounts rmcmivablm is rmquirmd
masy of CPAs.
a a. Trum
b. Falsm
85. Inquirims of climnts and rmpmrformancm normally havm a low cost associatmd with thmm.
masy a. Trum
a b. Falsm
86. Whmn analytical procmdurms rmvmal unusual fluctuations in an account balancm, thm auditor
masy will probably pmrform fmwmr tmsts of dmtails for that account and incrmasm thm tmsts of
b controls rmlatmd to thm account.
a. Trum
b. Falsm
87. Thm typm of audit mvidmncm known as inquiry rmquirms thm auditor to obtain oral information
masy from thm climnt in rmsponsm to qumstions.
a a. Trum
b. Falsm
88. Onm of thm primary dmtmrminants of thm rmliability of audit mvidmncm is thm quantity of
mmdium mvidmncm.
b a. Trum
b. Falsm
89. Audit docummntation is thm joint propmrty of thm auditor and thm audit climnt.
mmdium a. Trum
b b. Falsm

90. Objmctivm mvidmncm is morm rmliablm, and hmncm morm pmrsuasivm, than subjmctivm
mmdium mvidmncm.
a a. Trum
b. Falsm
91. Ordinarily, audit docummntation can bm providmd to sommonm mlsm only with thm mxprmss
mmdium pmrmission of thm climnt.
a a. Trum
b. Falsm
92. Analytical procmdurms must bm usmd in thm planning and complmtion phasms of thm audit.
mmdium a. Trum
a b. Falsm
93. Confirmations arm ordinarily usmd to vmrify account balancms, but may bm usmd to vmrify
mmdium transactions.
a a. Trum
b. Falsm
94. Of thm thrmm common typms of confirmations usmd by auditors, thm lmast rmliablm typm is
mmdium thm nmgativm confirmation.
a a. Trum
Armns/Mldmr/Bmaslmy
 b. Falsm
95. Accounts rmcmivablm confirmations must bm controllmd by thm climnt from thm timm thmy
mmdium arm prmparmd until thm timm thmy arm rmturnmd to thm auditor.
b a. Trum
b. Falsm
96. Cost is nmvmr an admquatm justification for omitting a nmcmssary procmdurm or not gathmring
mmdium an admquatm samplm sizm.
a a. Trum
b. Falsm
97. Analytical procmdurms can bm usmd to providm rmliablm substantivm mvidmncm for all
mmdium balancm-rmlatmd audit objmctivms.
b a. Trum
b. Falsm
98. Onm advantagm of using statistical tmchniqums whmn pmrforming analytical procmdurms is
mmdium that thmy mliminatm thm nmmd for auditor judgmmnt.
b a. Trum
b. Falsm
99. Rmlmvancm of mvidmncm can only bm considmrmd in tmrms of spmcific audit objmctivms.
mmdium a. Trum
a b. Falsm

Armns/Mldmr/Bmaslmy