Chapter 7 Audit Evidence Decisions

Question 1

audit _____ is the detailed instruction that explains the audit evidence to be obtained during the audit

Answer 1

procedure

Question 2

______ procedure is the detailed instruction that explains the audit evidence to be obtained during the audit

Answer 2

audit

Question 3

an audit program always includes what?

Answer 3

a list of the audit procedures

Question 4

audit procedures often incorporate what into the procedure?

Answer 4

sample size, items to select, and timing

Question 5

the sample size for any given audit procedure is likely to vary from audit to audit, depending on client characteristics such as what? (2)

Answer 5

1. the extent of automated controls 2. the required level of assurance from the procedure

Question 6

in the audit of financial statements, the client normally wants the audit completed when?

Answer 6

one to three months after year end

Question 7

the detailed instruction that explains the audit evidence to be obtained during the audit.

Answer 7

audit procedure

Question 8

what are 4 methods for selecting the specific items to be examined in a population if for example the auditor has decided on a sample size of 50 in cash disbursements ?

Answer 8

1. select a week and examine the first 50 transactions 2. select the 50 disbursements with the largest amounts 3. select the items randomly 4. select those transactions that the auditor thinks are most likely to be in error can use a combo of these methods as well

Question 9

Audit engagement software assists the auditor with what? (2)

Answer 9

1. selecting the audit procedures to be performed 2. other evidence decisions

Question 10

the timing decision of the audit procedures is partly affected by what?

Answer 10

when the client needs the audit to be completed

Question 11

T/F the timing of the audit procedures can vary from early in the accounting period to long after it has ended

Answer 11

T

Question 12

an audit program usually includes what? (3)

Answer 12

1. sample sizes 2. items to select 3. the timing of the tests

Question 13

audit procedure is the detailed instruction that explains the audit evidence to be _____ during the audit

Answer 13

obtained

Question 14

audit procedure is the detailed _____ that explains the audit evidence to be obtained during the audit

Answer 14

instruction

Question 15

audit procedure is the detailed instruction that explains the audit _____ to be obtained during the audit

Answer 15

evidence

Question 16

audit procedure is the _____ instruction that explains the audit evidence to be obtained during the audit

Answer 16

detailed

Question 17

the SEC requires that all public companies file audited financial statements with the SEC when?

Answer 17

within 60 to 90 days of the companys fiscal year end, depending on the company’s size

Question 18

after determining the sample size for an audit procedure, the auditor must decide what?

Answer 18

which items in the population to test

Question 19

once the audit procedure is selected, auditors can vary the ____ ____ from one to all of the items in the population being tested

Answer 19

sample size

Question 20

the list of audit procedures for an audit area or an entire audit is called?

Answer 20

an audit program

Question 21

Audit engagement software assists the auditor in selecting the audit procedures to be performed and other evidence decisions, based on what? (2)

Answer 21

1. identified risks 2. other audit planning decisions

Question 22

What are the 4 decisions about what evidence to gather and how much of it to accumulate?

Answer 22

1. which audit procedures to use? 2. what sample size to select for a given procedure? 3. which items to select from the population? 4. when to perform the procedures?

Question 23

audit procedure is the detailed instruction that explains the audit evidence to be obtained during the _____

Answer 23

audit

Question 24

A major decision facing every auditor is determining the appropriate ___ and _____ of evidence need to be satisfied that the client’s FSs are fairly stated.

Answer 24

types amounts

Question 25

normally there is an audit program, including several audit procedures , for each what?

Answer 25

component of the audit ex. A/R, sales, etc

Question 26

timing of the audit procedures is not only influenced by when the client wants the audit done by but also by what? what is an example of this?

Answer 26

when the auditor believes the audit evidence will be most effective and when audit staff is available ex. auditors often prefer to do counts of inventory as close to the B/S date as possible

Question 27

what is an audit procedure?

Answer 27

the detailed instruction that explains the audit evidence to be obtained during the audit.

Question 28

what kind of software assists the auditor in selecting the procedures to be performed and other evidence decisions, based on identified risks and other audit planning decisions?

Answer 28

Audit engagement software

Question 29

what is an audit program?

Answer 29

the list of audit procedures for an audit area or an entire audit