TRUE OR FALSEWritten representations are considered audit evidences. For recurring audits, management letters may include a follow-up of prior years recommendation and status of their resolutions. Related parties are generally unreliable in nature which leads to the auditor performing procedures to examine transactions with them. One of the ways to gain knowledge of any lirigations and claims is through an examination of professional and or legal expenses and related source documents. If lower detection risk is determined the auditor may reduce the extent of substantive procedures. Audit documentation should be done after the last day of audit field work and before the auditor's report date. Audit sampling is highly useful when identifying plausible relationships between account balances and classes of transactions. Review of tax returns and other information is an audit procedure responsive to the completeness of related party relationships and transactions. The type of substantive test procedures to be performed to obtain audit evidence is ultimately determined by auditor judgement. Confidence level is the complement of reliability level.

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Answered: Written representations are considered…

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

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

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

Chapter7: Planning The Audit: Identifying, And Responding To The Risk Of Material Misstatement

Section: Chapter Questions

Problem 18MCQ

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TRUE OR FALSE

Written representations are considered audit evidences.

For recurring audits, management letters may include a follow-up of prior years recommendation and status of their resolutions.

Related parties are generally unreliable in nature which leads to the auditor performing procedures to examine transactions with them.

One of the ways to gain knowledge of any lirigations and claims is through an examination of professional and or legal expenses and related source documents.

If lower detection risk is determined the auditor may reduce the extent of substantive procedures.

Audit documentation should be done after the last day of audit field work and before the auditor's report date.

Audit sampling is highly useful when identifying plausible relationships between account balances and classes of transactions.

Review of tax returns and other information is an audit procedure responsive to the completeness of related party relationships and transactions.

The type of substantive test procedures to be performed to obtain audit evidence is ultimately determined by auditor judgement.

Confidence level is the complement of reliability level.

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