Audit Evidence MCQs 2026

Observation in the context of Audit Evidence refers to

1. Aonly reading email headers✓
2. Bonly phone directory review✓
3. Conly logo inspection✓
4. Dwatching client perform process or control✓

Which statement about External confirmation is correct

1. Aclient prepared summary only✓
2. Bphotocopy without send✓
3. Cdirect written response from third party to auditor✓
4. Dverbal phone call without documentation✓

Physical examination is best described as

1. Adirect verification of tangible assets✓
2. Bonly ledger balance review for inventory✓
3. Conly inquiry about cash✓
4. Donly confirmation for fixed assets without sight✓

Which statement about Going concern evidence is correct

1. Aassume perpetual life without analysis✓
2. Bevaluating whether entity can continue operating for foreseeable future✓
3. Cignore cash flow projections✓
4. Dno post balance sheet review✓

A key aspect of Sufficient audit evidence is that it involves

1. Asingle inquiry always enough✓
2. Bno documentation needed✓
3. Cenough quantity of evidence to support opinion✓
4. Dclient oral promise only✓

Regarding Reliability of evidence in Audit Evidence, the accurate view is

1. Aonly management oral representation alone✓
2. Bincreases when obtained from independent external sources✓
3. Cinternal memo without support✓
4. Dunsigned handwritten note only✓

Audit Evidence: Analytical procedures can be defined as

1. Arandom guessing of balances✓
2. Bonly counting paperclips✓
3. Conly reading mission statement✓
4. Devaluation of financial information through analysis of plausible relationships✓

Regarding Inquiry in Audit Evidence, the accurate view is

1. Aseeking information from knowledgeable persons✓
2. Bonly evidence without corroboration always✓
3. Cignore responses contradicting evidence✓
4. Dnever document inquiry✓

Vouching in the context of Audit Evidence refers to

1. Aonly tracing from journal to ledger without docs✓
2. Bonly analytical review✓
3. Conly inquiry of intern✓
4. Dexamining supporting documents for recorded transactions✓

Which statement about Tracing is correct

1. Aonly backward from ledger✓
2. Bonly reading footnotes✓
3. Cfollowing source documents forward into records✓
4. Donly comparing to budget without source✓

Cut-off testing is best described as

1. Aignore year-end shipments✓
2. Baccept all December entries in January✓
3. Cprocedures ensuring transactions recorded in correct period✓
4. Dno receiving report review✓

A key aspect of Evidence hierarchy is that it involves

1. Aoral management claim strongest always✓
2. Binternal memo beats bank statement✓
3. Cunsigned list beats confirmation✓
4. Dexternal direct and documentary evidence generally more reliable✓

Audit Evidence: Audit file documentation of evidence can be defined as

1. Ano record of tests✓
2. Bdestroy all notes after fieldwork✓
3. Crecord procedures performed evidence obtained and conclusions✓
4. Dclient keeps all audit papers✓

Regarding Appropriate audit evidence in Audit Evidence, the accurate view is

1. Aevidence that is relevant and reliable for assertion tested✓
2. Birrelevant newspaper clipping✓
3. Crumour from anonymous source✓
4. Ddated marketing brochure only✓

Which statement about Inspection of documents is correct

1. Aonly listening to music✓
2. Bonly observing weather✓
3. Conly tasting food samples✓
4. Dexamining records whether internal or external✓

A key aspect of Recalculation is that it involves

1. Aaccepting totals without check✓
2. Bonly spell-checking narrative✓
3. Conly colour review of charts✓
4. Dchecking mathematical accuracy of documents or records✓

Audit Evidence: Reperformance can be defined as

1. Atrust client spreadsheet without test✓
2. Bonly read policy✓
3. Cauditor independently executes procedures originally done by client✓
4. Donly interview receptionist✓

Negative confirmation in the context of Audit Evidence refers to

1. Arecipient asked to respond only if disagreement✓
2. Balways preferred for high risk balances✓
3. Cused when individual amounts are large and disputed✓
4. Dmandatory for all bank accounts✓

Which statement about Positive confirmation is correct

1. Ano response required✓
2. Bonly for trivial items always✓
3. Crecipient asked to confirm whether agree or disagree✓
4. Dnever used for receivables✓

Related party transaction evidence is best described as

1. Aignore related party note✓
2. Baccept management denial without search✓
3. Cno disclosure review✓
4. Dadditional scrutiny due to non-arm length risk✓