Question 1

Current FMV of assets and liabilities of non-goodwill assets is one of the factors affecting goodwill impairment valuations.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is false regarding materiality judgments?

Accepted Answer

A) Materiality judgments are a matter of professional judgment. 
B) Materiality judgments depend on the needs of a reasonable person (an investor,potential investor,or other stakeholder)relying on the information. 
C) Materiality judgments involve both quantitative and qualitative considerations. 
D) Materiality judgments are easy for auditors to make. 
A) Materiality judgments are a matter of professional judgment. 
B) Materiality judgments depend on the needs of a reasonable person (an investor,potential investor,or other stakeholder)relying on the information. 
C) Materiality judgments involve both quantitative and qualitative considerations. 
D) Materiality judgments are easy for auditors to make.

Question 3

Which of the following is required by the dual approach for assessing uncorrected misstatements?

Accepted Answer

A) The application of the rollover method. 
B) The application of the iron curtain method. 
C) Simultaneous application of both the rollover and iron curtain methods. 
D) Sequential application of both the rollover and iron curtain methods. 
A) The application of the rollover method. 
B) The application of the iron curtain method. 
C) Simultaneous application of both the rollover and iron curtain methods. 
D) Sequential application of both the rollover and iron curtain methods.

Question 4

Almost every asset and liability account requires significant judgments.Which of the following judgments is subject to allowance for noncollectibility?

Accepted Answer

A) Inventories. 
B) Marketable securities. 
C) Other receivables. 
D) Deferred revenue. 
A) Inventories. 
B) Marketable securities. 
C) Other receivables. 
D) Deferred revenue.

Question 5

Auditors are constantly challenged to evaluate the quality of a client's estimates,including areas such as obsolescence of inventory,allowance for doubtful accounts,and tax provisions among others.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is an approach used to determine posting material?

Accepted Answer

A) Dual approach. 
B) Percentage approach. 
C) Qualitative approach. 
D) Planning approach. 
A) Dual approach. 
B) Percentage approach. 
C) Qualitative approach. 
D) Planning approach.

Question 7

Which method focuses on assuring that the year-end balance sheet is correct and does not consider the impact of prior-year uncorrected misstatements reversing in later years?

Accepted Answer

A) Rollover. 
B) Iron curtain. 
C) Dual. 
D) Percentage. 
A) Rollover. 
B) Iron curtain. 
C) Dual. 
D) Percentage.

Question 8

Goodwill arising from many acquisitions can be netted into one test at the company level.

Accepted Answer

A) True 
 B)False

Question 9

An auditor's consideration of materiality is a matter of professional judgment and is influenced by the auditor's perception of the needs of users of financial statements.

Accepted Answer

A) True 
 B)False

Question 10

Performance materiality helps the auditor to determine which of the following?

Accepted Answer

A) Extent of audit evidence needed. 
B) The specific analytical procedures to perform. 
C) The specific substantive procedures to perform. 
D) Control risk assessment. 
A) Extent of audit evidence needed. 
B) The specific analytical procedures to perform. 
C) The specific substantive procedures to perform. 
D) Control risk assessment.

Question 11

Evidence of fraud,whether or not material,on the part of senior management,would likely cause the auditor to conclude that the client had a material weakness in internal control over financial reporting.

Accepted Answer

A) True 
 B)False

Current FMV of assets and liabilities of non-goodwill assets is one of the factors affecting goodwill impairment valuations.

Which of the following statements is false regarding materiality judgments?

Which of the following is required by the dual approach for assessing uncorrected misstatements?

Almost every asset and liability account requires significant judgments.Which of the following judgments is subject to allowance for noncollectibility?

Auditors are constantly challenged to evaluate the quality of a client's estimates,including areas such as obsolescence of inventory,allowance for doubtful accounts,and tax provisions among others.

Which of the following is an approach used to determine posting material?

Which method focuses on assuring that the year-end balance sheet is correct and does not consider the impact of prior-year uncorrected misstatements reversing in later years?

Goodwill arising from many acquisitions can be netted into one test at the company level.

An auditor's consideration of materiality is a matter of professional judgment and is influenced by the auditor's perception of the needs of users of financial statements.

Performance materiality helps the auditor to determine which of the following?

Evidence of fraud,whether or not material,on the part of senior management,would likely cause the auditor to conclude that the client had a material weakness in internal control over financial reporting.

Auditing: Integral to the Economy

The Risk of Fraud and Mechanisms to Address Fraud: Regulation,corporate Governance,and Audit Quality

Internal Control Over Financial Reporting: Managements Responsibilities and Importance to the External Auditors

Professional Liability and the Need for Quality Auditor Judgments and Ethical Decisions

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, use, impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Other Services Provided by Audit Firms

Filters

Exam 16: Advanced Topics Concerning Complex Auditing Judgments

Current FMV of assets and liabilities of non-goodwill assets is one of the factors affecting goodwill impairment valuations.

Which of the following statements is false regarding materiality judgments?

Which of the following is required by the dual approach for assessing uncorrected misstatements?

Almost every asset and liability account requires significant judgments.Which of the following judgments is subject to allowance for noncollectibility?

Auditors are constantly challenged to evaluate the quality of a client's estimates,including areas such as obsolescence of inventory,allowance for doubtful accounts,and tax provisions among others.

Which of the following is an approach used to determine posting material?

Which method focuses on assuring that the year-end balance sheet is correct and does not consider the impact of prior-year uncorrected misstatements reversing in later years?

Goodwill arising from many acquisitions can be netted into one test at the company level.

An auditor's consideration of materiality is a matter of professional judgment and is influenced by the auditor's perception of the needs of users of financial statements.

Performance materiality helps the auditor to determine which of the following?

Evidence of fraud,whether or not material,on the part of senior management,would likely cause the auditor to conclude that the client had a material weakness in internal control over financial reporting.

Auditing: Integral to the Economy

The Risk of Fraud and Mechanisms to Address Fraud: Regulation,corporate Governance,and Audit Quality

Internal Control Over Financial Reporting: Managements Responsibilities and Importance to the External Auditors

Professional Liability and the Need for Quality Auditor Judgments and Ethical Decisions

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, use, impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Other Services Provided by Audit Firms

Filters