21.

A confirmation request letter should always be sent under the

control of The client. 
The auditor 
The recipient 
Both a and b. 
22.The higher the quality of audit evidence, the higher the amount of audit
evidence is  required. 
False 
23.When the recipient has accomplished the confirmation request, replies
should be Sent directly to the auditor. 
Sent directly to the client, then from the client to the auditor. 
Sent directly to the auditor, with another copy of the reply going to
the client. Not sent back since a confirmation request does not
necessitate replies. 24.Negative confirmation requests may be used
when 
The assessed level of inherent and control risks are HIGH. 
A large number of small balances are involved. 
A substantial number of errors are expected. 
The auditor has reason to believe that respondents will disregard these
requests. 25.Evidence is generally considered appropriate when
It has been obtained by random selection. 
There is enough of it to afford a reasonable basis for an opinion on financial
statements, It has the qualities of being relevant, objective and free from
known bias. It consists of written statements made by managers of the
enterprise under audit. 
26.Theoretically, which of the following would not have an effect on the amount of
audit  evidence gathered by the auditor? 
The type of opinion to be issued. 
The auditor’s evaluation of internal control. 
The types of audit evidence available to the auditor. 
Whether or not the client reports to the Securities and Exchange
Commission. 27.The sufficiency and appropriateness of evidential matter
ultimately is based on the Availability of corroborating data. 
Philippine Standards of Auditing. 
Pertinence of the evidence. 
Judgment of the auditor. 
28.“The use of comparisons and relationships to assess whether account balances or
other  data appear reasonable compared to the auditor’s expectations” is  
Analytical procedures 
Tests of transactions 
Tests of balances 
Auditing 
29.Which of the following is the most reliable type of evidence? 
A written representation signed by the entity’s CFO. 
The physical count of securities and cash. 
Observation of cobwebs on some inventory bins. 
 Inquiries of the credit manager about the collectability of noncurrent accounts
receivable. 30.An example of an external document that provides reliable
information for the auditor is Bank statements 
Employees’ time reports. 
Carbon copies of checks. 
Purchase order for company purchases 
31.Evidence is generally considered sufficient when 
It is appropriate 
There is enough of it to afford a reasonable basis for an opinion on the
financial  statements. 
It has the qualities of being relevant, objective and free from
unknown bias. It has been obtained by random selection. 
32.Which of the following types of audit evidence is the least
persuasive? Prenumbered purchase order forms. 
Bank statements obtained from the client. 
Test counts of inventory performed by the auditor. 
Correspondence from the client’s attorney about litigation. 
33.Which of the following is not a characteristic of the appropriateness of
evidence? Timeliness 
Education of auditor 
Effectiveness of client internal controls 
Independence of information provider 
34.This refers to unintentional misstatements in the financial statements, including
omission  of an amount or a disclosure.
Accounting estimate 
Errors 
Fraud 
Risks 
35.The risk of material misstatement is greater when accounting estimates are
involved. True 
36.It refers to the material (working papers) prepared by and for, or obtained and
retained by  the auditor in connection with the performance of the audit. 
Documentation 
Audit report 
Accounting data 
Corroborative evidence 
37.Working papers should be kept on the client’s premises so that the client can
have  access to them for reference purposes. 
False 
38.Working papers which contain information relating primarily to the audit of a single
period  are known as permanent file or perma-files. 
False 
39.Section 29 of RA 9298 provides for the ownership of working papers. Who owns
audit  working papers? 
The client 
The auditor 
 The Philippine SEC 
The ACPAPP 
40.Working papers would not include 
Information concerning the legal and organizational structure of
the entity. Letters of representation received from the entity. 
Copies of the financial statements and the auditor’s report. 
Documentation showing how the client’s schedules are prepared. 
41.Which of the following is not generally included in the working papers file? An
indication as to who performed the audit procedures and when they were
performed. Documentation of the auditor’s understanding of the accounting and
internal control systems. 
Copy of the internal audit department’s audit program. 
Analyses of significant ratios and trends. 
42.The current file of the auditor’s working papers generally should
include Organizational charts, 
A copy of the financial statements. 
Copies of bond and note indentures. 
a flowchart of the internal accounting controls. 
43.Working papers which contain information relating primarily to the audit of a single
period  are known as 
Current audit file 
Permanent audit file 
Financial reporting file  
Correspondence file. 
44.Working papers which contain information of continuing importance or
significance are  known as  
Current audit file
Permanent audit file 
Financial reporting file  
Correspondence file 
45.The current file of an auditor’s working papers most likely would include a copy
of the Articles of incorporation and by laws 
Current year schedules and analyses 
Long-term debt agreement. 
Long-term customer service contrac