Audit evidence and specific considerations for certain items

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. The quality of audit evidence depends on whether it is relevant and reliable in supporting the conclusions of the auditor, and normally the following assumptions are correct -

  2. What are the assertions in respect of classes of transactions and events (usually profit or loss account assertions) that need to be verified by sufficient appropriate audit evidence?

  3. What are the assertions in respect of account balances at the period end (usually balance sheet assertions) that need to be verified by sufficient appropriate audit evidence?

  4. What is the audit objective when testing the cut-off assertion for classes of transactions and events in the financial statements (usually profit or loss assertions)?

  5. What is the audit objective when testing the completeness assertion for account balances in the financial statements (usually balance sheet assertions)?

  6. When could it be appropriate to test all the items (100% examination) that make up a class of transactions or an account balance?

  7. If an auditor makes a judgemental selection of specific items to be tested from those that make up a class of transactions or account balance, which items may be appropriate to select?

  8. When the auditor attends the inventory counting (stocktake) and performs test counts to verify the existence of inventory and its physical condition, he/she should -

  9. In verifying the valuation of receivables, sufficient appropriate audit evidence is normally obtained by -

  10. When verifying the completeness, accuracy and cut-off of income the auditor may obtain sufficient appropriate evidence by -