As inherent risk increases, and other risk factors remain constant, what happens to the extent of audit work?

As inherent risk increases, and other risk factors remain constant, what happens to the extent of audit work? 

A. Increases
B. Decreases
C. Stays the same
D. Becomes less reliable








Answer: A

What type of relationship exists between audit risk and detection risk?

What type of relationship exists between audit risk and detection risk? 

A. Direct
B. Inverse
C. Indirect
D. No relationship







Answer: A

Which of the following statements is true regarding analytical techniques?

Which of the following statements is true regarding analytical techniques? 

A. Ratio analysis takes advantage of economic relationships between two or more accounts.
B. Ratio trend analysis are generally carried out through a comparison of client data with expectations based on industry data, prior-period data, and expectations developed from industry trends, client budgets, and so on.
C. Developing expectations is the first step in performing analytical procedures.
D. All of the above are true.








Answer: D

Which of the following types of audit evidence is the most reliable?

Which of the following types of audit evidence is the most reliable? 

A. Evidence from the client's organization
B. Evidence from a poorly controlled system.
C. Directly observable evidence
D. Facsimiles of documents






Answer: C

Which of the following is not a type of internal documentation?

Which of the following is not a type of internal documentation? 

A. Legal documents
B. Business documents
C. Third-party documents
D. Accounting documents








Answer: C

To be reliable evidence, confirmations must be controlled by which of the following individuals?

To be reliable evidence, confirmations must be controlled by which of the following individuals? 

A. A client employee responsible for accounts receivable.
B. An external auditor
C. A client's internal audit department
D. A client's controller or CFO.








Answer: B

An audit program is created to specify which of the following?

An audit program is created to specify which of the following? 

A. The type of audit opinion to be rendered based upon procedures performed.
B. The audit procedures that will be performed every year for the client.
C. How an auditor should think while performing audit procedures
D. Audit objectives and procedures to be followed during the audit process.









Answer: C