Reference no: EM132839895

Problem 1: Which of the following statements is most accurate about the reliability of audit evidence?

a. Information obtained indirectly from independent outside sources is more persuasive than the auditor's direct personal knowledge obtained through observation and inspection.

b. The reliability of audit evidence refers to the amount of corroborative evidence obtained.

c. Verbal statements of fact by management are as reliable as documentary evidence.

d. To be viewed as reliable, audit evidence must be obtained from outside the audited entity.

e. The more effective the entity's internal controls, the more assurance it provides about the reliability of the accounting data and financial statements.

Problem 2: Which of the following circumstances would most likely conceal a misappropriation of cash and be least likely to be detected by an auditor?

a. Understating the sales journal.

b. Understating the cash receipts journal Understating the sales journal.

c. Overstating the accounts receivable subsidiary ledger.

d. Overstating the accounts receivable control account.

e. Understating the allowance for uncollectibles.