Reference no: EM132725603

Problem 1: Which of the following is least likely included in an audit engagement letter?

a. The objective of financial reporting

b. Management responsibility for the financial statements

c. The form of any reports or other communication of the results of the engagement

d. Arrangement concerning the involvement of other auditors or experts in some aspects of the audit

Problem 2: 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

Problem 3: 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

c. The auditor uses professional judgment and exercises professional skepticism in evaluating the quantity and quality of audit evidence, and thus its sufficiency and appropriateness, to support the audit opinion.

d. The matter of difficulty or expense involved is a valid basis for omitting an audit procedure for which there is no alternative