Which of the following statements is, generally, correct about the reliability of audit evidence?

Related Mcqs:

1. In an audit of financial statements, substantive tests are audit procedures that __________?

   A. May be eliminated for an account balance under certain conditions
   B. Are designed to discover significant subsequent events
   C. Will increase proportionately when the auditor decreases the assessed level of control risk
   D. May be test of transactions, test of balance and analytical procedures

2. ______the audit risks_______the materiality and_________the audit effort.

   A. Lower, Higher, Lower
   B. Lower, Lower, Higher
   C. Higher, Lower, Lower
   D. Lower, Higher, Higher

3. For what minimum period should audit working papers be retained by audit firm?

   A. For the time period the entity remains a client of the audit firm.
   B. For a period of ten years
   C. For a period auditor opines them to be useful in servicing the client
   D. For the period the audit firm is in existence.

4. _______the audit risk,_______the materiality and _______the audit effort?

   A. Lower, Higher, Lower
   B. Lower, Lower, Higher
   C. Higher, Lower, Lower
   D. Lower, Higher, Higher

5. Of the following, which is the least persuasive type of audit evidence?

   A. Bank statements obtained from the client
   B. Documents obtained by auditor from third parties directly.
   C. Carbon copies of sales invoices inspected by the auditor
   D. Computations made by the auditor

6. Which of the following factors is most important in determining the appropriations of audit evidence?

   A. The reliability of audit evidence and its relevance in meeting the audit objective
   B. The objectivity and integrity of the auditor
   C. The quantity of audit evidence
   D. The independence of the source of evidence

7. Which of the following is normally the most reliable source of audit evidence?

   A. Internal audit
   B. Suppliers’ statements
   C. Board minutes
   D. Analytical review

8. According to ISA 500, the strength of audit evidence is determined by which two qualities?

   A. Appropriateness & competence
   B. Sufficiency & appropriateness
   C. Reliability & extensiveness
   D. Objectivity & independence

9. Which of the following statements is not true about continuous audit?

   A. It is conducted at regular interval
   B. It may be carried out on daily basis
   C. It is needed when the organization has a good internal control system
   D. It is expensive

10. When restrictions that significantly affect the scope of the audit are imposed by the client, the auditor generally should issue which of the following opinion?

    A. Qualified opinion
    B. Disclaimer of opinion
    C. Adverse opinion
    D. Unqualified report with ‘an emphasis of matter’ paragraph;