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ch5 True F

true or false chap 5

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Rebecca Fady El-hajj
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© © All Rights Reserved
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28 views

ch5 True F

true or false chap 5

Uploaded by

Rebecca Fady El-hajj
Copyright
© © All Rights Reserved
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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1 Assertions are representations by the auditor about the components of the financial

statements.

True
A)

False
B)

2 In a tracing procedure, the direction of the test is from the source document to the
journal or ledger.

True
A)

False
B)

3 The auditor relies on evidence that is persuasive rather than convincing when reporting
on a set of financial statements.

True
A)

False
B)

4 Reliability refers to whether the evidence relates to the specific assertion being tested.
True
A)

False
B)

5 The main function of audit working papers is to provide evidence of the exercise of due
care in litigation cases against the auditor.

True
A)

False
B)

6 Audit working papers are the property of the auditor.


True
A)

False
B)
The correct answer for each question is indicated by a  .

Assertions are representations by the auditor about the components of


1 INCORRECT the financial statements.

A)True

B)False

Feedback: Assertions are representations by management.

In a tracing procedure, the direction of the test is from the source


2 INCORRECT document to the journal or ledger.

A)True

B)False

Feedback: The opposite direction of testing is a vouching


procedure.

The auditor relies on evidence that is persuasive rather than


3 CORRECT convincing when reporting on a set of financial statements.

A)True

B)False

Feedback: It is impossible to obtain entirely convincing


evidence due to cost constraints and the nature of the evidence
itself.

Reliability refers to whether the evidence relates to the specific


4 CORRECT assertion being tested.

A)True

B)False

Feedback: Relevance refers to whether the evidence relates to


the specific assertion being tested.

The main function of audit working papers is to provide evidence of


5 CORRECT the exercise of due care in litigation cases against the auditor.

A)True

B)False
Feedback: Although this is a function of audit working papers,
the two main functions are (1) to provide support for the
auditor’s report and (2) to aid in the conduct and supervision
of the audit.

6 CORRECT Audit working papers are the property of the auditor.

A)True

B)False

Feedback: However, due the confidentiality of the information


contained in the working papers, they cannot be shown
(except under certain circumstances) to anyone without the
client’s consent.

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