BA301 Tutorial 6

Part A
Answer TRUE/FALSE. Explain your reasons.
1. Audit evidence is also referred to as an audit opinion.
2. The amount of evidence gathered is not important to an auditor since the quality of the evidence is of primary importance.
3. The extent of evidence gathered during an audit is affected by the auditor's assessment of detection risk.
4. Analytical procedures are a type of substantive evidence.

Part B
1. Reprocessing of transactions helps establish that all valid items have been recorded. Reprocessing tests which of the following assertions?
a.
occurrence.
b.
rights.
c.
existence.
d.
completeness.

2. Sufficient evidence gathered by the auditor involves which of the following?
a.
The amount of evidence to be obtained.
b.
The type of evidence to be obtained.
c.
Obtaining limited evidence to achieve efficiency.
d.
The use of an audit program to obtain evidence.

3. Which of the following is an example of poorly-developed audit documentation?
a.
clear communication as to how testing was performed, the results and conclusions.
b.
organization and assembly of documentation in an orderly fashion.
c.
headings that include the name and signature of the client representative that the auditor interacted with while performing testing.
d.
authenticated identification of the person responsible for completing the procedure and conclusions.

4 Vouching of transactions deals with which of the following?
a.
testing forward.
b.
testing backward.
c.
testing at a point in time.
d.
directional testing either forward or backward.

5. Auditors have traditionally focused most audit procedures on the direct tests of assets and liability account balances, as opposed to examining transactions during the year, because
a.
there are usually fewer items in ending balances.
b.
more reliable evidence usually exists for ending balances.
c.
there is a preference to focus on change in account balances.
d.
both A and B.
e.
all of the above.

Part C
1. Discuss the source of the phrase