True or False: The auditor has the right to retain working papers indefinitely.

False - The auditor must retain working papers for at least 7 years.

Fill in the blank: Audit documentation serves as evidence in legal proceedings if the auditor is accused of ___ or ___.

Negligence; misconduct

What are the two main types of audit files, and why are they significant for future audits?

Permanent files and Current files; Permanent files are of ongoing importance for future audits.

True or False: An auditor's lien allows them to withhold a client's documents until their fees are paid.

True

Fill in the blank: The sufficiency of audit evidence refers to the ___ of evidence collected.

Amount

Explain the importance of written representations in audit procedures.

Written representations provide confirmation of management assertions and support other audit evidence, ensuring completeness in the audit process.

What is the primary purpose of conducting substantive procedures in auditing?

To verify the completeness, accuracy, and validity of data generated by the accounting system.

True or False: Auditors can use management representation as prime audit evidence without any verification.

False - Auditors must independently verify transactions rather than solely relying on management representation.

What factors influence the reliability of audit evidence?

The source, nature, and circumstances under which the evidence is acquired.

What does the concept of 'True and Fair View' ensure in auditing?

It ensures that financial statements accurately represent the entity's financial position.

What is the significance of the auditor's duty to disclose unusual, exceptional, or nonrecurring items?

It provides transparency and ensures that stakeholders are aware of significant events affecting the financial statements.