Ateneo de Davao University
School of Business and Governance
ACAUD 2348
Formative Assessment 4
Professor: Dan Michael M. Dela Serna CPA, MBA, REB, REA
Name: CORCIEGA, Christene Violette L.
Score:
Section and Class Schedule: 3A – 11:10 – 12:40 PM
I- TRUE OR FALSE –Write TRUE if the statement is correct and FALSE if it is wrong on the space
provided for.
TRUE 1. Audit Evidence is the information gathered in the course of an engagement that supports the
auditor’s opinion and conclusions.
FALSE 2. A rational relationship should exist between the cost of obtaining evidence and the usefulness
of the information obtained.
TRUE 3. Auditors need to obtain evidence on a cost-effective basis.
TRUE 4. Relevance is the measure of the pertinence of the evidence.
FALSE 5. Reliability is the measure of the quantity of sources and techniques. Sufficiency
FALSE _6. Sufficiency is the measure of the quality of evidence. Reliability
TRUE 7. Evidence shall be reasonably representative of the population being reviewed or addressed.
FALSE _8. The generalizations on the reliability of audit evidence performed by internal auditors.
Internal Auditors
TRUE 9. Evidence shall have a logical relationship to what it purports to prove.
TRUE 10. The entries in the accounting records are often initiated, authorized, recorded, processed, and
reported in electronic form.
TRUE 11. The direction of testing must be from the recorded item to the supporting documents.
TRUE 12. The sources of such evidence are computations, comparisons with prescribed standards, past
operations, similar operations, or laws or regulations, and reasoning.
FALSE 13. Many tests may include the performance or mathematical checking of source documents and
other records. Dual purpose tests
TRUE 14. Different tools and techniques have various strengths and weaknesses.
TRUE 15. 3rd Part Confirmation obtaining evidence from another parties.
TRUE 16. Adequate preparation and good skills are needed to use interviews effectively in building or
confirming audit evidence.
TRUE 17. Inspection of physical assets provides highly reliable evidence of their existence or condition.
FALSE _18. There are two principal means of inspection. three
_ FALSE _19. Cross-references should stand out clearly and provide indirect and prompt access to
information. direct
_ FALSE __20. Discovery sampling used where evidence of a double error or instance would call for
intensive investigation. Single error
II. IDENTIFICATION: Write on the space provided the word or phrase that is being described.
Competent Evidence 1. Is reasonably free from error and bias and faithfully represents that which it
purports to represent.
Persuasive 2. Auditor uses evidence from different sources to support the management assertion.
Sufficiency 3. Is the measure of the quantity of evidence.
Prudent 4. Describe an action which is the wise thing to do under the existing circumstances.
Reliability 5. Is the measure of the quality of sources and techniques.
Physical Evidence 6. Consists of evidence that can actually be seen by auditors.
Documentary 7. Is that which exists in some permanent form such as records, purchase orders, invoices,
memoranda, and procedure manuals, clients’ accounting records.
Audit Test 8. Developed and conducted for either compliance or substantive verification purposes.
Audit Procedures 9. Are designed to gather information that corroborates and documents evidence that
specified risk management control and governance processes are effective.
Audit Sampling 10. is the process of selecting part of a population to determine parameters and
characteristics of the whole population.
III. MATCHING TYPE: Write the letter on the space provided.
A. Accuracy
B. Completeness
C. Judgmental sampling
D. Discovery sampling
E. Existence
F. Incorrect acceptance
G. Rights and Obligations
H. Random sampling
I. Population
J. Incorrect rejection
B. 1. Whether all transactions and accounts that should be presented in the FSs or other reports are
included.
E. 2. Whether assets/liabilities exist at a given date and whether recorded transactions have occurred
during a given period.
A. 3. Verify that transactions are accurately computed.
G. 4. Whether, at a given time, all assets are the rights of the entity and all liabilities are the obligations
of the entity.
H. 5. Selection is not governed by predetermined considerations. Every unit in the population has an
equal chance of being selected.
D. 6. Used where evidence of a single error or instance would call for intensive investigation.
C. 7. Based on the auditor’s professional judgment; meant to focus and confirm a condition that is
reasonably thought to exist.
F. 8. The risk that the attribute or assertion tested is assessed as unlikely when, in fact, it is likely.
J. 9. The risk that the attribute or assertion tested I assessed as likely when, in fact it is not likely.
I. 10. Is defined as, the entire set of data from which a sample is selected and about which the internal
auditor wishes to draw conclusions.
