Audit Evidence MCQs

Option A: The reliability of audit evidence and its relevance in meeting the audit objective

Option B: The objectivity and integrity of the auditor

Option C: The quantity of audit evidence

Option D: The independence of the source of evidence

Correct Answer: The reliability of audit evidence and its relevance in meeting the audit objective ✔

Option A: The auditor has ascertained that the balance is materially correct when in actual fact it is not

Option B: The auditor concludes the balance is materially misstated when in actual fact is not

Option C: The auditor has rejected an item from sample which was not supported by documentary evidence

Option D: He applies random sampling on data which is inaccurate and inconsistent

Correct Answer: The auditor has ascertained that the balance is materially correct when in actual fact it is not ✔

Option A: The auditor concludes balance is materially correct when in actual fact it is not

Option B: The auditor concludes that the balance is materially misstated when in actual fact it not

Option C: The auditor has rejected an item for sample which was material

Option D: None of the above

Correct Answer: The auditor concludes that the balance is materially misstated when in actual fact it not ✔

Option A: Authenticated copy of relevant minutes of meetings may be regarded as management representation

Option B: It should always be in working

Option C: It may be dated prior to the report date

Option D: It should be addressed to the auditor

Correct Answer: It should always be in working ✔

Option A: Risk of over reliance

Option B: Risk of incorrect rejection

Option C: Risk of incorrect acceptance

Option D: Both A. and C.

Correct Answer: D. Both A. and C. ✔

Option A: Minutes of meetings

Option B: Confirmations from debtors

Option C: Information gathered by auditor through observation

Option D: Worksheet supporting consolidated financial statements

Correct Answer: Worksheet supporting consolidated financial statements ✔

Option A: When it constitutes entire population

Option B: When it is enough to provide a basis for giving reasonable assurance regarding truthfulness

Option C: When it is objective and relevant

Option D: When auditor collects and evaluates it independently

Correct Answer: When it is enough to provide a basis for giving reasonable assurance regarding truthfulness ✔

Option A: To be reliable, evidence should conclusive rather than persuasive

Option B: Effective internal control system provides reliable audit evidence

Option C: Evidence obtained from outside sources routed through the client

Option D: All are correct.

Correct Answer: Effective internal control system provides reliable audit evidence ✔

Option A: randomly

Option B: disproportionately

Option C: directly

Option D: inversely

Correct Answer: directly ✔

Option A: may be eliminated for an account balance under certain conditions

Option B: are designed to discover significant subsequent events

Option C: will increase proportionately when the auditor decreases the assessed level of control risk

Option D: may be test of transactions, test of balance and analytical procedures

Correct Answer: may be test of transactions, test of balance and analytical procedures ✔

Option A: Bank statements obtained from the client

Option B: Documents obtained by auditor from third parties directly.

Option C: Carbon copies of sales invoices inspected by the auditor

Option D: Computations made by the auditor

Correct Answer: Carbon copies of sales invoices inspected by the auditor ✔