18 Questions
What does an auditor need to examine in order to assess the actualities of a situation?
Financial statements
What does objective examination by an auditor involve?
Critical assessment of accounting statements
Why is it important for an auditor to give an expert opinion on the truth and fairness of accounts?
To ensure financial accuracy
What risks does an auditor face if they conduct a reckless and negligent examination?
Legal action and loss of professional standing
Why does an auditor need evidence in order to arrive at a judgment?
To provide backup for their opinions
What is the potential consequence for an auditor who fails to evaluate financial statements objectively?
Legal action and loss of prestige
What type of audit evidence is considered more reliable?
Audit evidence obtained directly by the auditor
What form of audit evidence is considered more reliable?
Evidence obtained in documentary form
What type of document is considered more reliable for audit evidence?
Original documents
What is the relationship between the sufficiency and appropriateness of audit evidence?
Sufficiency and appropriateness are interrelated
What is the purpose of obtaining sufficient appropriate audit evidence?
To draw reasonable conclusions on financial statements
What is the measure of the quantity of audit evidence?
Sufficiency
What is the purpose of examining items whose recorded values exceed a certain amount?
To verify a large proportion of the total amount of a class of transactions or account balance
What is the main objective of audit sampling?
To draw conclusions about an entire population based on testing a sample drawn from it
What should the auditor do if audit evidence obtained from one source is inconsistent with that obtained from another?
Determine what modifications or additions to audit procedures are necessary to resolve the matter
Which of the following is NOT a reason for examining items during an audit?
To establish the value of the entity's assets and liabilities
What is the purpose of obtaining information about the nature of the entity or the nature of transactions?
To understand the entity's operations and the types of transactions it engages in
Which of the following is NOT an example of items that an auditor may examine?
Items that have been audited in a previous period
Learn about audit evidence and the examination of items in auditing procedures. Understand how auditors verify suspicious, unusual, or high-value items to ensure accuracy and reliability in financial statements.
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