ASSIGNMENT
7-25 (OBJECTIVES 7-8, 7-9) The following questions concern audit documentation. Choose the best response.
a. Which of the following is not a primary purpose of audit documentation?
(1) To coordinate the audit
(2) To assist in preparation of the audit report
(3) To support the financial statements
(4) To provide evidence of the audit work performed
b. During an audit engagement, pertinent data are compiled and included in the audit files. The audit files primarily are considered to be
(1) evidence supporting financial statements.
(2) a client-owned record of conclusions reached by the auditors who performed the
engagement.
(3) support for the auditor’s representations as to compliance with auditing standards.
(4) a record to be used as a basis for the following year’s engagement.
c. Although the quantity, type, and content of audit documentation will vary with the circumstances, audit documentation generally will include the
(1) copies of those client records examined by the auditor during the course of the engagement.
(2) evaluation of the efficiency and competence of the audit staff assistants by the partner responsible for the audit.
(3) auditor’s comments concerning the efficiency and competence of client management personnel.
(4) auditing procedures followed and the testing performed in obtaining audit evidence.
MULTIPLE CHOICE QUESTIONS FROM BECKER CPA EXAM REVIEW
7-26 (OBJECTIVES 7-3, 7-5, 7-8) The following questions concern audit evidence and audit
documentation. Choose the best response.
a. According to PCAOB audit standards, audit documentation must be retained for
b. Which of the following types of audit evidence is generally the most reliable?
(1) one year.
(2) three years.
(3) five years.
(4) seven years.
(1) A bank confirmation
(2) A bank statement
(3) Analytical procedures
(4) Inquiries of the audit committee
c. An auditor most likely would apply analytical procedures in the overall review stage
of an audit to
(1) identify unusual or unexpected balances that were not previously identified.
(2) obtain an understanding of high-risk areas.
(3) evaluate the design and implementation of internal control.
(4) identify related party transactions that may not have been previously identified
