Audit Evidence and Examination of Items

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What does an auditor need to examine in order to assess the actualities of a situation?

Employee resumes
Financial statements (correct)
Meeting minutes
Marketing brochures

What does objective examination by an auditor involve?

Reviewing employee performance records
Evaluating marketing strategies
Examining production processes
Critical assessment of accounting statements (correct)

Why is it important for an auditor to give an expert opinion on the truth and fairness of accounts?

To increase professional standing
To comply with legal requirements
To assist in tax calculations
To ensure financial accuracy (correct)

What risks does an auditor face if they conduct a reckless and negligent examination?

Legal action and loss of professional standing (D) Signup and view all the answers

Why does an auditor need evidence in order to arrive at a judgment?

To provide backup for their opinions (A) Signup and view all the answers

What is the potential consequence for an auditor who fails to evaluate financial statements objectively?

Legal action and loss of prestige (C) Signup and view all the answers

What type of audit evidence is considered more reliable?

Audit evidence obtained directly by the auditor (C) Signup and view all the answers

What form of audit evidence is considered more reliable?

Evidence obtained in documentary form (A) Signup and view all the answers

What type of document is considered more reliable for audit evidence?

Original documents (B) Signup and view all the answers

What is the relationship between the sufficiency and appropriateness of audit evidence?

Sufficiency and appropriateness are interrelated (C) Signup and view all the answers

What is the purpose of obtaining sufficient appropriate audit evidence?

To draw reasonable conclusions on financial statements (B) Signup and view all the answers

What is the measure of the quantity of audit evidence?

Sufficiency (D) Signup and view all the answers

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 (A) Signup and view all the answers

What is the main objective of audit sampling?

To draw conclusions about an entire population based on testing a sample drawn from it (D) Signup and view all the answers

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 (B) Signup and view all the answers

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 (D) Signup and view all the answers

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 (B) Signup and view all the answers

Which of the following is NOT an example of items that an auditor may examine?

Items that have been audited in a previous period (A) Signup and view all the answers