Chaptr7 - final.docVIP

CHAPTER 7 Multiple-Choice Questions 1. easy Auditors must make decisions regarding what evidence to gather and how much to accumulate. Which of the following is not a decision that must be made by auditors related to evidence? d a. Audit procedure to use. b. Sample size. c. Timing of audit procedures. d. Each of the above is a decision that must be made. 2. Audit procedures may be performed: easy a. early in the accounting period being audited. d b. throughout the period being audited with emphasis on the transactions near the end. c. shortly after the close of the period being audited. d. during all three of the above periods. 3. easy The third standard of fieldwork requires the auditor to accumulate sufficient appropriate evidence to support the opinion issued. Because of the nature of audit evidence, it is: a a. unlikely the auditor will be completely convinced that the opinion is correct. b. likely the auditor will be completely convinced that the opinion is correct. c. unlikely the auditor will arrive at a conclusion. d. likely that the auditor would change his/her mind about the opinion if he/she took the time to gather additional evidence. 4. Which of the following forms of evidence is most reliable? easy a. General ledger account balances. b b. Confirmation of accounts receivable balance received from a customer. c. Internal memo explaining the issuance of a credit memo. d. Copy of month-end adjusting entries. 5. Which of the following is not a characteristic of the reliability of evidence? easy a. Effectiveness of client internal controls. b b. Education of auditor. c. Independence of information provider. d. Timeliness. 6. Which of the following is not a characteristic of the reliability of evidence? easy a. Qualification of individual providing information. c b. Auditor’s direct knowledge. c. Degree of subjectivity. d. Degree of objectivity. 7. easy Calculating the gross margin as a perc