Question

The competence (reliability) of audit evidence cannot be improved by testing a large sample of items.

True

False

Objective evidence is more reliable, and hence more persuasive, than subjective evidence.

True

False

Audit evidence related to balance sheet accounts is more persuasive when it is accumulated during the entire period under audit, than when it is obtained only during the period near the balance sheet date.

True

False

Cost should never be a consideration when making decisions about evidence for a given audit.

True

False

Physical examination is usually more costly than observation.

True

False

Analytical procedures are usually the most costly type of evidence.

True

False

Physical examination is normally more reliable than observation.

True

False

Inquiries of the client are rarely sufficient by themselves to provide competent evidence to satisfy an audit objective.

True

False

A canceled check written by the client, made payable to a local vendor, and drawn on the client’s bank account is one type of internal document.

True

False

When the client’s internal controls are good, internal documents ate more reliable than internal documents.

Truer

False

Whenever practical and reasonable, the confirmation of accounts receivable is required of CPAs.

True

False

Confirmations are ordinarily not used to verify individual transactions such as sales.

True

False

Of the three common types of confirmation used by auditors, the most reliable type is the positive confirmation with the information to be included on the form

True

False

Analytical procedures are required during the planning and completion phases on all financial statements audits.

True

False

Answer 1

1)The competence(reliability) of audit evidence cannot be improved by testing a large sample of item- True. Obtaining more audit evidence may not compensate for it's poor quality.

2)Objective evidence is more reliable hence more persuasive than subjective evidence - True

3)Audit evidence related to balance sheet accounts is more persuasive when it is accumulated during the entire period under audit than when it is obtained only during the period near the balance sheet date - False. It is more persuasive when it is obtained during the period near the balance sheet date.

4)Cost should never be a consideration when making decisions about evidence for a given audit - True. Cost is never an adequate justification for omitting an evidence but at the lowest cost possible.

5)Physical examination is usually more costly than observation - True.

6)Analytical procedures are usually the most costly type of evidence - False. Analytical procedures are considerably less expensive.

7)Physical examination is normally more reliable than the observation - True. Physical examination is the direct means of verifying that an asset exist.

8)Inquiries of the client are rarely sufficient by themselves to provide competent evidence to satisfy an audit objective - False. Inquiries of the client are usually sufficient to provide appropriate evidence.

9)A canceled check written by the client made payable to a local supplier and drawn on clients bank account is one type of internal document - False. It is not a type of internal document.

10)Whenever practical and reasonable the confirmation of account receivable is required of CPAs - True

11)Confirmations are ordinarily not used to verify individual transactions such as sales - True. Confirmation are ordinarily used to verify account balances.

12)Of the three common types of confirmation used by auditors the most reliable type is the positive confirmation with the information to be included on the form. - True. The positive blank form confirmation is less reliable and negative confirmation is least reliable.

13)Analytical procedures are required during the planning and completion phases on all financial statements audit. - True. Analytical procuders are must required for financial and non-financial statements audit.