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. False, the reliability of audit evidence can be improved by testing a large sample of items.

2. True, objective evidence is more reliable than the subjective because it is unbiased doesn't complimented with any personal interest.

3. True, audit evidences that is obtained throughout the year is more competent than the evidences obtained during the balance sheet finalisation because the former evidences contained the detailed transactions.

4. False, there are some costs which is to be considered while obtaining audit evidences.

5. True, physical examination is more costly than the observation. Because for the physical verification a proper audit team is required so that the audit goes consistently, and there are some other costs that are associated with the physical verification.

6. False, Analytical procedures are usually not the most costly procedures in audit.

7. True, physical verification is most reliable than the observation.

8. False, a proper verification is to be made to make reliable the evidences obtained.

9. False, a canceled check can not be held as an internal document.

10. True, if the internal control system is good then the internal documents are reliable.

11. True, the confirmation of accounts receivable is necessary by the CPAs.

12. True, confirmations are obtained on a sample basis not for the individual transactions of sales.

13. Ture,because under the positive confirmation the receiver has to respond even if he confirms the information asked by the auditor.

14. True, analytical procedures are required during the planning and completion phases on all financial statement audits.