Audit Chapter 5

Which of the following is not required documentation in an audit in accordance with generally accepted auditing standards?

A flowchart depicting the segregation of duties and authorization of transactions

Which of the following presumptions is correct about the reliability of audit evidence?

An effective internal control structure provides more assurance about the reliability of audit evidence.

According to the third standard of fieldwork, which of the following terms identifies a requirement for audit evidence?

Appropriate

Which of the following types of audit evidence is the most persuasive?

Bank statements obtained from the client

The permanent (continuing) file of an auditor's working papers most likely would include copies of the

Debt agreements

Analytical procedures used in planning an audit should focus on

Enhancing the auditor's understanding of the client's business

In creating lead schedules for an audit engagement, a CPA often uses automated workpaper software. What client information is needed to begin this process?

General ledger information such as account numbers, prior-year account balances, and current-year unadjusted information

Which of the following procedures would provide the most reliable audit evidence?

Inspection of bank statements obtained directly from the client's financial institution

Which of the following would not be considered an analytical procedure?

Projecting an error rate by comparing the results of a statistical sample with the actual population characteristics

An auditor ordinarily uses a working trial balance resembling the financial statements without footnotes, but containing columns for

Reclassifications and adjustments

Which of the following nonfinancial information would an auditor most likely consider in performing analytical procedures during the planning phase of an audit?

Square footage of selling space

The best primary audit evidence regarding year-end bank balances is documented in the

Standard bank confirmations

Which of the following factors would least likely affect the quantity and content of an auditor's working papers?

The content of the representation letter

Which of the following comparisons would an auditor most likely make in evaluating an entity's costs and expenses?

The current year's payroll expense with the prior year's payroll expense

An auditor discovered that a client's accounts receivable turnover is substantially lower for the current year than for the prior year. This may indicate that

There was an improper cutoff of sales at the end of the year.

An auditor's analytical procedures most likely would be facilitated if the entity

Uses a standard cost system that produces variance reports