Audit Evidence MCQs 2026

Observation in the context of Audit Evidence refers to

1. A only reading email headers ✓
2. B only phone directory review ✓
3. C only logo inspection ✓
4. D watching client perform process or control ✓

Which statement about External confirmation is correct

1. A client prepared summary only ✓
2. B photocopy without send ✓
3. C direct written response from third party to auditor ✓
4. D verbal phone call without documentation ✓

Physical examination is best described as

1. A direct verification of tangible assets ✓
2. B only ledger balance review for inventory ✓
3. C only inquiry about cash ✓
4. D only confirmation for fixed assets without sight ✓

Which statement about Going concern evidence is correct

1. A assume perpetual life without analysis ✓
2. B evaluating whether entity can continue operating for foreseeable future ✓
3. C ignore cash flow projections ✓
4. D no post balance sheet review ✓

A key aspect of Sufficient audit evidence is that it involves

1. A single inquiry always enough ✓
2. B no documentation needed ✓
3. C enough quantity of evidence to support opinion ✓
4. D client oral promise only ✓

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

1. A only management oral representation alone ✓
2. B increases when obtained from independent external sources ✓
3. C internal memo without support ✓
4. D unsigned handwritten note only ✓

Audit Evidence: Analytical procedures can be defined as

1. A random guessing of balances ✓
2. B only counting paperclips ✓
3. C only reading mission statement ✓
4. D evaluation of financial information through analysis of plausible relationships ✓

Regarding Inquiry in Audit Evidence, the accurate view is

1. A seeking information from knowledgeable persons ✓
2. B only evidence without corroboration always ✓
3. C ignore responses contradicting evidence ✓
4. D never document inquiry ✓

Vouching in the context of Audit Evidence refers to

1. A only tracing from journal to ledger without docs ✓
2. B only analytical review ✓
3. C only inquiry of intern ✓
4. D examining supporting documents for recorded transactions ✓

Which statement about Tracing is correct

1. A only backward from ledger ✓
2. B only reading footnotes ✓
3. C following source documents forward into records ✓
4. D only comparing to budget without source ✓

Cut-off testing is best described as

1. A ignore year-end shipments ✓
2. B accept all December entries in January ✓
3. C procedures ensuring transactions recorded in correct period ✓
4. D no receiving report review ✓

A key aspect of Evidence hierarchy is that it involves

1. A oral management claim strongest always ✓
2. B internal memo beats bank statement ✓
3. C unsigned list beats confirmation ✓
4. D external direct and documentary evidence generally more reliable ✓

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

1. A no record of tests ✓
2. B destroy all notes after fieldwork ✓
3. C record procedures performed evidence obtained and conclusions ✓
4. D client keeps all audit papers ✓

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

1. A evidence that is relevant and reliable for assertion tested ✓
2. B irrelevant newspaper clipping ✓
3. C rumour from anonymous source ✓
4. D dated marketing brochure only ✓

Which statement about Inspection of documents is correct

1. A only listening to music ✓
2. B only observing weather ✓
3. C only tasting food samples ✓
4. D examining records whether internal or external ✓

A key aspect of Recalculation is that it involves

1. A accepting totals without check ✓
2. B only spell-checking narrative ✓
3. C only colour review of charts ✓
4. D checking mathematical accuracy of documents or records ✓

Audit Evidence: Reperformance can be defined as

1. A trust client spreadsheet without test ✓
2. B only read policy ✓
3. C auditor independently executes procedures originally done by client ✓
4. D only interview receptionist ✓

Negative confirmation in the context of Audit Evidence refers to

1. A recipient asked to respond only if disagreement ✓
2. B always preferred for high risk balances ✓
3. C used when individual amounts are large and disputed ✓
4. D mandatory for all bank accounts ✓

Which statement about Positive confirmation is correct

1. A no response required ✓
2. B only for trivial items always ✓
3. C recipient asked to confirm whether agree or disagree ✓
4. D never used for receivables ✓

Related party transaction evidence is best described as

1. A ignore related party note ✓
2. B accept management denial without search ✓
3. C no disclosure review ✓
4. D additional scrutiny due to non-arm length risk ✓