Question 1: With respect to audit objectives, the term validity relates to which of the assertions below?
a.existence and occurrence
b.completeness
c.valuation or allocation
d.presentation and disclosure
e.rights and obligations
Question 2: The assessed risk of material misstatement influences audit decisions about audit procedures. Which of the following decisions is more appropriate when the risk of material misstatement is assessed as low rather than when it is assessed as high?
a.Performing audit procedures at the balance sheet date.
b.Performing audit procedures on a larger proportion of the population.
c.Obtaining audit evidence primarily with substantive tests.
d.Including the most experienced individuals on the audit team.
e.Choosing substantive audit procedures that provide less persuasive evidence when considering benefits and costs.
Question 3: In practice, the use of analytical procedures has proven to be:
a.totally ineffective in detecting misstatements.
b.quite effective in detecting the largest of misstatements.
c.useful in the planning phase, but not in the testing phase of the audit.
d.too costly to apply in most audit situations.
e.moderately effective in detecting most misstatements.