Evidence is generally considered appropriate when: Select one: a. it has been obtained by random selection b. there is enough of it to afford a reasonable basis for an opinion on financial statements c. it consists of written statements made by managers of the company under audit d. it is relevant to the audit objective being tested

Evidence is generally considered appropriate when: Select one: a. it has been obtained by random selection b. there is enough of it to afford a reasonable basis for an opinion on financial statements c. it consists of written statements made by managers of the company under audit d. it is relevant to the audit objective being tested

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter6: Audit Evidence

Section: Chapter Questions

Problem 1RQSC

See similar textbooks

Similar questions

Professional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.
The auditor's assessment of the reliability and sufficiency of the information contained in the underlying accounting records is a part of ______________ a. Audit Test b. Comparison c. Evaluation d. Judgement
Question: Assume that you are an auditor of a company. Explain any THREE categories of assertions that you will be testing when auditing the financial statements of the company. You are required to: (ii.) with proper justification and two sample transactions.
The auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be considered together in determining the nature, timing, and extent of auditing procedures and in evaluating the results of those procedures. Required: a. Define audit risk b. Describe the components of audit risk (e.g., inherent risk, control risk, and detection risk). c. Explain how these components are interrelated
Management's assertions in the financial statements are of relevance to the audit process because a. they are the procedures that will be performed by the audit team. b. they are utilized by auditors in developing proper tests and procedures c. they are direct evidence that management has prepared financial statements in accordance with GAAS. d. they relate more to the audit while the financial statenent belong to the author.
The existence of audit risk is recognized by the statement in the auditor's standard report that the auditor _______. A. Assesses the accounting principles used and also evaluates the overall financial statement presentation. B. Is responsible for expressing an opinion on the financial statements, which are the responsibility of management. C. Obtains reasonable assurance about whether the financial statements are free of material misstatement. D. Realizes that some matters, either individually or in the aggregate, are important while other matters are not important.
Why is the selection of the auditors at the right time critical to the success of a financial statement audit?
The primary purpose of accumulating sufficient and appropriate audit evidence is to Group of answer choices a. Support the auditor’s opinion on the financial statements. b. Detect fraud in the financial statements. c. Defend the auditor in case of legal dispute. d. Evaluate the performance of the management of an entity.
To do an audit of a company's financial statements, there must be several key elements and procedures including all of the following except: O A. Quantitative information in a verifiable form that can be checked by the auditor. O B. Some standards or criteria by which the auditor can evaluate the information, which are generally accepted accounting principles or International Financial Reporting Standards. C. Determining the degree of correspondence between information and established criteria using some kind and amount of evidence. O D. None of the above.
Define risk of material misstatement. At what level of the financial statements do auditors measure RMM? Describe how auditors assess the RMM. What role does RMM play in substantive testing?
Generally accepted auditing standards (the performance principle) require auditors to gather sufficient appropriate evidence on which to base an opinion.Required:a. Briefly define the characteristics “sufficient” and “appropriate” as they relate to audit evidence.b. What are relevance and reliability (as they relate to audit evidence)? How do these concepts relate to the auditors’ requirement to gather sufficient appropriate evidence?c. How does the source of evidence affect its reliability?d. How does the effectiveness of the entity’s internal control affect the sufficiency and appropriateness of evidence gathered by auditors?
Audit procedures are takes performed by the internal auditors and the auditee to gather the evidence required achieve audit objectives . Select one a. False b. True