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7) Which of the following statements relating to the competence of evidential matter is always true?
A) Oral representations made by management are not reliable evidence.
B) Evidence from outside an enterprise is always reliable.
C) Accounting data developed under satisfactory conditions of internal control is not reliable.
D) Evidence must be both reliable and relevant to be considered appropriate.
8) When allocating performance materiality,
A) it is easy to predict in advance which accounts are most likely to be misstated.
B) only overstatements need to be considered.
C) the sum of all the performance materiality levels cannot exceed the preliminary judgment about materiality.
D) professional judgment is critical.
9) Which of the following is part of planning?
A) Estimate total misstatement in the segment.
B) Set materiality for the financial statements as a whole.
C) Estimate the combined misstatement.
D) Compare the combined estimated with preliminary judgment.
10) A tour of the client's facilities provides the auditor an opportunity to
A) observe operations. B) meet key personnel.
C) assess physical safeguards over assets. D) all of the above
11) Which is usually included in the engagement letter?
A)
| The projected type of opinion on the financial statement to be audited | Name(s) of the client personnel responsible for supplying the auditor with information |
| No | Yes |
B)
| The projected type of opinion on the financial statement to be audited | Name(s) of the client personnel responsible for supplying the auditor with information |
| Yes | Yes |
C)
| The projected type of opinion on the financial statement to be audited | Name(s) of the client personnel responsible for supplying the auditor with information |
| Yes | No |
D)
| The projected type of opinion on the financial statement to be audited | Name(s) of the client personnel responsible for supplying the auditor with information |
| No | No |
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