IDENTIFICATION

1. This is effective for testing reasonableness of certain account balances.

2. Clarifies position between the auditor and the auditee on audit observations and
recommendations.
3. It is the measure of the quantity of evidence.
4. Method of obtaining evidence from third parties regarding specific balances.
5. Performed by auditor to verify mathematical accuracy of client’s analyses and
records.
6. Provides a complete audit trail and demonstrate how the engagement was
performed.
7. Communications are easily understood and logical.
8. It is the measure of the quality of sources and techniques.
9. Tests management assertion / representation existence or occurrence.
10. The factual evidence that the internal auditor found in the course of the
examination.
11. Simulates real processes and help in decision-making.
12. Maximum numbers of errors that the auditor is willing to accept.
13. Communications are free from errors and distortions and are faithful to the
underlying facts.
14. Graphic representation of a process or system.
15. Information gathered in the course of an audit engagement that supports the
auditor’s opinion and conclusions.
16. It is the measure of the pertinence of the evidence.
17. Communications are well-timed, opportune, and expedient for careful consideration
by those who may act on the recommendations.
18. May be obtained through inspection, reconciliation, vouching, and tracing.
19. Communications are fair, impartial, and unbiased.
20. Letters in response to audit enquiries.

TRUE OR FALSE

1. Cause is the reason for the difference the expected and actual conditions.
2. Incorrect rejection is the risk that the attribute or assertion tested is assessed as
unlikely, when in fact, it is likely.
3. Oral management representations are considered as primary evidence.
4. Audi evidence that is generated internally is more reliable when related controls
imposed by the entity are effective.
5. The sufficiency of audit evidence is influenced by its source and by its nature and is
dependent on the individual circumstances under which it is obtained.
6. Evidence accumulated from different sources and of different types provides
absolute evidence.
7. The higher the quality, the less the audit evidence may be required.
8. The difficulty and the expense involved in testing a particular item are not in
themselves a valid basis for omitting the test.
9. Substantive tests are designed to assess the adequacy and effectiveness of controls.
10. Vouching is done by reversing the procedures described under tracing.
11. Surveys are structured approaches to gathering information from a large
population.
12. The decisions on which type of evidence to seek and how much evidence are
matters to be determined in the exercise of independence and objectivity.
13. Unexpected errors are errors that the auditor expects in the population based on
prior audit results.
14. Audit committee must control access to engagement records.
15. Scanning is an examination of documents intended to determine whether or not a
transaction was recorded.