Question 1

The essence of the attest function is to:

Accepted Answer

A)  examine individual transactions so that the auditor may certify as to their validity. 
B)  determine whether the client's financial statements are fairly stated. 
C)  detect collusion and fraud. 
D)  assure the consistent application of correct accounting procedures. 
A)  examine individual transactions so that the auditor may certify as to their validity. 
B)  determine whether the client's financial statements are fairly stated. 
C)  detect collusion and fraud. 
D)  assure the consistent application of correct accounting procedures.

Question 2

The completeness assertion concerns whether recorded transactions included in the financial statements actually occurred.

Accepted Answer

A) True 
 B)False

Question 3

Audits are expected to provide a higher degree of assurance for the detection of material irregularities, such as management fraud, than is provided for an equally material error.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is NOT an assertion relating to 'general transaction- related audit objectives'?

Accepted Answer

A)  Accuracy 
B)  Occurrence 
C)  Rights and obligations 
D)  Completeness 
A)  Accuracy 
B)  Occurrence 
C)  Rights and obligations 
D)  Completeness

Question 5

ASA 300 requires an auditor to gain a reasonable understanding of the client's:

Accepted Answer

A)  business and industry. 
B)  industry but not business. 
C)  business but not industry. 
D)  specific entity structure but not its business or industry. 
A)  business and industry. 
B)  industry but not business. 
C)  business but not industry. 
D)  specific entity structure but not its business or industry.

Question 6

An audit can be divided into transaction cycles. Identify the cycles and explain the relationships among the cycles.

Accepted Answer

Cycles have no beginning or end except a

Question 7

The factor that distinguishes an error from fraud is:

Accepted Answer

A)  whether it is caused by the auditor or the client. 
B)  whether it is a dollar amount or a process. 
C)  intent. 
D)  materiality. 
A)  whether it is caused by the auditor or the client. 
B)  whether it is a dollar amount or a process. 
C)  intent. 
D)  materiality.

Question 8

When an auditor believes that an illegal act may have occurred, the first step he or she should take is to inquire of management at a level above those likely to be involved in the potential illegal act.

Accepted Answer

A) True 
 B)False

Question 9

Balance- related audit objectives are also applied to all income statement accounts.

Accepted Answer

A) True 
 B)False

Question 10

The transaction- related audit objective that deals with whether recorded transactions have actually occurred is the completeness objective.

Accepted Answer

A) True 
 B)False

Question 11

ASA 200 states: The objective of an audit of a financial report is to enhance the degree of confidence of intended users in the financial statements.

Accepted Answer

A) True 
 B)False

Question 12

When the auditor believes an illegal act may have occurred, it is necessary to:

Accepted Answer

A)  consider accumulating additional evidence to determine if there is actually an illegal act. 
B)  inquire of management, at a level above those likely to be involved with illegality. 
C)  consult with the client's legal counsel. 
D)  do all three of the above. 
A)  consider accumulating additional evidence to determine if there is actually an illegal act. 
B)  inquire of management, at a level above those likely to be involved with illegality. 
C)  consult with the client's legal counsel. 
D)  do all three of the above.

Question 13

There are five general transaction- related audit objectives. One is the existence objective, which deals with whether recorded transactions have actually occurred. Identify and discuss each of the remaining general transaction- related audit objectives.

Accepted Answer

· Completeness. Completeness deals with

Question 14

Which of the following is NOT a management assertion category?

Accepted Answer

A)  Account balances 
B)  Classes of transactions and events 
C)  Presentation and disclosure 
D)  None of the above, i.e., all are management assertion categories. 
A)  Account balances 
B)  Classes of transactions and events 
C)  Presentation and disclosure 
D)  None of the above, i.e., all are management assertion categories.

Question 15

The objective of an audit is to:

Accepted Answer

A)  provide assurance that the financial report is free from error. 
B)  express an opinion on whether the financial reports are prepared in accordance with an applicable financial reporting framework. 
C)  express an opinion on the financial statements. 
D)  provide assurance that the financial reports are free from error and fraud. 
A)  provide assurance that the financial report is free from error. 
B)  express an opinion on whether the financial reports are prepared in accordance with an applicable financial reporting framework. 
C)  express an opinion on the financial statements. 
D)  provide assurance that the financial reports are free from error and fraud.

Question 16

After the general balance- related objectives are understood, specific objectives for each account balance on the financial statements can be developed. Which of the following statements is true?

Accepted Answer

A)  There must be two specific objectives for each general objective. 
B)  There should be at least one specific objective for each relevant general objective. 
C)  There will be only one specific objective for each relevant general objective. 
D)  There will be many specific objectives developed for each relevant general objective. 
A)  There must be two specific objectives for each general objective. 
B)  There should be at least one specific objective for each relevant general objective. 
C)  There will be only one specific objective for each relevant general objective. 
D)  There will be many specific objectives developed for each relevant general objective.

Question 17

A Directors Declaration in accordance with the Corporations Act, must state the directors are satisfied the financial statements:

Accepted Answer

A)  comply with applicable accounting standards. 
B)  are in accordance with the Act. 
C)  give a true and fair view. 
D)  all of the above 
A)  comply with applicable accounting standards. 
B)  are in accordance with the Act. 
C)  give a true and fair view. 
D)  all of the above

Question 18

The effect of a violation of the completeness transaction- related audit objective for cash disbursements transactions would be an overstatement of cash disbursements.

Accepted Answer

A) True 
 B)False

Question 19

How does the auditor obtain sufficient appropriate audit evidence about management assertions in the financial statements?

Accepted Answer

The auditor obtains obtains sufficient a

Question 20

The auditor's responsibility for uncovering direct- effect illegal acts is the same as for errors and fraud.

Accepted Answer

A) True 
 B)False

The essence of the attest function is to:

The completeness assertion concerns whether recorded transactions included in the financial statements actually occurred.

Audits are expected to provide a higher degree of assurance for the detection of material irregularities, such as management fraud, than is provided for an equally material error.

Which of the following is NOT an assertion relating to 'general transaction- related audit objectives'?

ASA 300 requires an auditor to gain a reasonable understanding of the client's:

An audit can be divided into transaction cycles. Identify the cycles and explain the relationships among the cycles.

The factor that distinguishes an error from fraud is:

When an auditor believes that an illegal act may have occurred, the first step he or she should take is to inquire of management at a level above those likely to be involved in the potential illegal act.

Balance- related audit objectives are also applied to all income statement accounts.

The transaction- related audit objective that deals with whether recorded transactions have actually occurred is the completeness objective.

ASA 200 states: The objective of an audit of a financial report is to enhance the degree of confidence of intended users in the financial statements.

When the auditor believes an illegal act may have occurred, it is necessary to:

There are five general transaction- related audit objectives. One is the existence objective, which deals with whether recorded transactions have actually occurred. Identify and discuss each of the remaining general transaction- related audit objectives.

Which of the following is NOT a management assertion category?

The objective of an audit is to:

After the general balance- related objectives are understood, specific objectives for each account balance on the financial statements can be developed. Which of the following statements is true?

A Directors Declaration in accordance with the Corporations Act, must state the directors are satisfied the financial statements:

The effect of a violation of the completeness transaction- related audit objective for cash disbursements transactions would be an overstatement of cash disbursements.

How does the auditor obtain sufficient appropriate audit evidence about management assertions in the financial statements?

The auditor's responsibility for uncovering direct- effect illegal acts is the same as for errors and fraud.

Demand for Audit and Assurance Services

Auditors Legal Environment

Audit Quality and Ethics

Audit Evidence

Audit Planning and Documentation

Materiality and Risk

Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling

Audit of Transaction Cycles and Financial Statement Balances I

Audit of Transaction Cycles and Financial Statement Balances II

Completing the Audit

Audit Reporting

Other Auditing and Assurance Engagements

Filters

Exam 4: Audit Responsibilities and Objectives

The essence of the attest function is to:

The completeness assertion concerns whether recorded transactions included in the financial statements actually occurred.

Audits are expected to provide a higher degree of assurance for the detection of material irregularities, such as management fraud, than is provided for an equally material error.

Which of the following is NOT an assertion relating to 'general transaction- related audit objectives'?

ASA 300 requires an auditor to gain a reasonable understanding of the client's:

An audit can be divided into transaction cycles. Identify the cycles and explain the relationships among the cycles.

The factor that distinguishes an error from fraud is:

When an auditor believes that an illegal act may have occurred, the first step he or she should take is to inquire of management at a level above those likely to be involved in the potential illegal act.

Balance- related audit objectives are also applied to all income statement accounts.

The transaction- related audit objective that deals with whether recorded transactions have actually occurred is the completeness objective.

ASA 200 states: The objective of an audit of a financial report is to enhance the degree of confidence of intended users in the financial statements.

When the auditor believes an illegal act may have occurred, it is necessary to:

There are five general transaction- related audit objectives. One is the existence objective, which deals with whether recorded transactions have actually occurred. Identify and discuss each of the remaining general transaction- related audit objectives.

Which of the following is NOT a management assertion category?

The objective of an audit is to:

After the general balance- related objectives are understood, specific objectives for each account balance on the financial statements can be developed. Which of the following statements is true?

A Directors Declaration in accordance with the Corporations Act, must state the directors are satisfied the financial statements:

The effect of a violation of the completeness transaction- related audit objective for cash disbursements transactions would be an overstatement of cash disbursements.

How does the auditor obtain sufficient appropriate audit evidence about management assertions in the financial statements?

The auditor's responsibility for uncovering direct- effect illegal acts is the same as for errors and fraud.

Demand for Audit and Assurance Services

Auditors Legal Environment

Audit Quality and Ethics

Audit Evidence

Audit Planning and Documentation

Materiality and Risk

Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling

Audit of Transaction Cycles and Financial Statement Balances I

Audit of Transaction Cycles and Financial Statement Balances II

Completing the Audit

Audit Reporting

Other Auditing and Assurance Engagements

Filters