Working papers should be sufficiently complete and detailed so as to provide an overall understanding of the audit. They should contain information on planning the audit, the nature, timing and extent of the audit procedures performed and the results and conclusions from the procedures. Working papers should be sufficient to allow an ‘experienced auditor, having no previous connection with the audit’ to be able to
understand: •the nature, timing and extent of the audit procedures performed to comply with the ISAs (UK) and applicable legal and regulatory requirements; •the results of the audit procedures performed, and the audit evidence obtained; and To subscribe to this content, simply call 0800 231 5199 We can create a package that’s catered to your
individual needs. Or book a demo to see this product in action.  Page 1 of 6 AT-5913 CPA REVIEW SCHOOL OF THE PHILIPPINES M a n i l a AUDITING THEORY AUDIT EVIDENCE AND DOCUMENTATION Related PSAs: PSA 500(rev) and 230 Audit Evidence/PSA 500(rev) – Audit Evidence 1. Which statement is incorrect regarding audit evidence? a.Audit evidence is all the information used by the auditor in arriving at the conclusions on which the audit opinion is based. b.Audit evidence includes the information contained in the accounting records underlying the financial statements and other information. c. Audit evidence is cumulative in nature. d. Auditors are expected to address all information that may exist. 2. Accounting records least likely include a. The records of initial entries and supporting records. b. The general and subsidiary ledgers. c. Work sheets and spreadsheets supporting cost allocations. d.Comparable data about competitors (benchmarking). 3. Other information that the auditor may use as audit evidence least likely includes a. Minutes of meetings. b. Confirmations from third parties. c. Information obtained by the auditor from such audit procedures as inquiry, observation, and inspection. d. Adjustments to the financial statements that are not reflected in formal journal entries. 4. Which statement is correct regarding the sufficiency and appropriateness of audit evidence? a. Sufficiency is the measure of the quality of audit evidence. b.Appropriateness is the measure of the quantity of audit evidence; that is, its relevance and its reliability in providing support for, or detecting misstatements in, the classes of transactions, account balances, and disclosures and related assertions. c. The quantity of audit evidence needed is affected by the risk of misstatement (the greater the risk, the more audit evidence is likely to be required) and also by the quality of such audit evidence (the higher the quality, the less may be required). d. Merely obtaining more audit evidence may compensate for its poor quality. 5. Which of the following statements is incorrect regarding relevance of audit evidence? a.A given set of audit procedures may provide audit evidence that is relevant to certain assertions, but not others. b.The auditor often obtains audit evidence from different sources or of a different nature that is relevant to the same assertion. c. Obtaining audit evidence relating to a particular assertion is a substitute for obtaining audit evidence regarding another assertion. d. None of the above. 6. Which of the following generalizations in assessing the reliability of audit evidence is incorrect? a.Audit evidence is more reliable when it is obtained from independent sources outside the entity. b. Audit evidence that is generated internally is not affected by the effectiveness of the controls imposed by the entity. c. Audit evidence obtained directly by the auditor is more reliable than audit evidence obtained indirectly or by inference. d. Audit evidence is more reliable when it exists in documentary form. 7. Which statement is incorrect regarding audit evidence? a.The auditor should obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion. b. Accounting records alone do not provide sufficient audit evidence. What are the form and content of working papers?Examples of working papers are audit programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents, and schedules or commentaries prepared or obtained by the auditor. Working papers also may be in the form of data stored on tapes, films, or other media.
Which of the following is not an advantage of the preparation of working paper?It can not to be used as a guidance for any similar issues of another client since they are strictly client-specific and very confidential.
Which of the following pieces of information should be included on every working paper?Source of the data.. Explanation of test/analysis.. Conclusions.. All of these pieces of information should be included on every working paper.. Which of the following is generally included or shown in the auditor's working papers?It includes information like financial statements and audit report of the entity, trial balance and worksheets, records regarding internal control risk of an entity, external confirmations received, queries of auditor and reply received from the management etc.
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The following statements relate to the form and content of working papers which is false
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