Question 1

The primary purpose of obtaining an understanding of the company's internal controls in the financial statement audit is:

Accepted Answer

A) To help the auditors develop the audit program 
B) Make suggestions to management to improve internal controls. 
C) Obtain direct sufficient appropriate audit evidence to afford a reasonable basis for an opinion on the financial statements. 
D) To determine whether the company has changed any accounting principles. 
A) To help the auditors develop the audit program 
B) Make suggestions to management to improve internal controls. 
C) Obtain direct sufficient appropriate audit evidence to afford a reasonable basis for an opinion on the financial statements. 
D) To determine whether the company has changed any accounting principles. A

Question 2

Because of the risk of material misstatement, an audit of financial statements in accordance with generally accepted auditing standards should be planned and performed with an attitude of

Accepted Answer

A) Objective judgment. 
B) Independent integrity. 
C) Professional skepticism. 
D) Impartial conservatism. 
A) Objective judgment. 
B) Independent integrity. 
C) Professional skepticism. 
D) Impartial conservatism. C

Question 3

Williams & Co., a large international CA firm, will be subject to an external peer review.The peer review will most likely be performed by

Accepted Answer

A) Employees and partners of Williams & Co.who are not associated with the particular audits being reviewed. 
B) Employees and partners of another CA firm. 
C) Peer review staff of the Ontario Securities Commission. 
D) Peer review staff of the CICA. 
A) Employees and partners of Williams & Co.who are not associated with the particular audits being reviewed. 
B) Employees and partners of another CA firm. 
C) Peer review staff of the Ontario Securities Commission. 
D) Peer review staff of the CICA. B

Question 4

Practice standards are a general set of standards intended to guide the audits of financial statements.

Accepted Answer

A) True 
 B)False

Question 5

According to IFAC, which of the following is not one of the elements of quality control?

Accepted Answer

A) Independence. 
B) Supervision. 
C) Acceptance and continuance of clients. 
D) Due professional care. 
A) Independence. 
B) Supervision. 
C) Acceptance and continuance of clients. 
D) Due professional care.

Question 6

CICA Handbook S.5025 "Standards for Assurance Engagements" differs from S.5100 "Generally Accepted Auditing Standards" in that the assurance standards

Accepted Answer

A) Contain no requirement to obtain an understanding of the auditee's internal control system. 
B) Do not require technical training and proficiency. 
C) Do not require planning for attestation engagements or supervision of accountants and consultants who perform the work. 
D) Do not require a report that "states the character of the engagement." 
A) Contain no requirement to obtain an understanding of the auditee's internal control system. 
B) Do not require technical training and proficiency. 
C) Do not require planning for attestation engagements or supervision of accountants and consultants who perform the work. 
D) Do not require a report that "states the character of the engagement."

Question 7

A report giving conclusions about a firm's compliance with quality control standards is typical of which of the following?

Accepted Answer

A) Practice inspection. 
B) Quality inspection. 
C) Peer review. 
D) Quality review. 
A) Practice inspection. 
B) Quality inspection. 
C) Peer review. 
D) Quality review.

Question 8

Control risk is the risk that an accounting firm's quality control standards will not be adequate.

Accepted Answer

A) True 
 B)False

Question 9

A standard unqualified audit report should be dated:

Accepted Answer

A) No later than the date when the auditor obtained sufficient appropriate audit evidence supporting the auditor's opinion. 
B) No earlier than the date when the auditor obtained sufficient appropriate audit evidence supporting the auditor's opinion. 
C) As at the end of the year being reported on. 
D) As at the end of the year the audit work was done. 
A) No later than the date when the auditor obtained sufficient appropriate audit evidence supporting the auditor's opinion. 
B) No earlier than the date when the auditor obtained sufficient appropriate audit evidence supporting the auditor's opinion. 
C) As at the end of the year being reported on. 
D) As at the end of the year the audit work was done.

Question 10

Several sources of GAAP consulted by an auditor are in conflict as to the application of an accounting principle.Which of the following should the auditor consider to be the most authoritative?

Accepted Answer

A) CICA Handbook. 
B) CICA Exposure Drafts. 
C) Industry practice. 
D) Federal legislation. 
A) CICA Handbook. 
B) CICA Exposure Drafts. 
C) Industry practice. 
D) Federal legislation.

Question 11

The mix between controls testing and substantive testing:

Accepted Answer

A) Will affect the effectiveness of the audit. 
B) Will affect the efficiency of the audit. 
C) Will affect the results of the audit. 
D) Will affect the profitability of the audit. 
A) Will affect the effectiveness of the audit. 
B) Will affect the efficiency of the audit. 
C) Will affect the results of the audit. 
D) Will affect the profitability of the audit.

Question 12

According to GAAS, the overall objective of a financial statement audit is:

Accepted Answer

A) To enable the auditor to express an opinion as to whether the financial statements are prepared in accordance with generally accepted accounting principles. 
B) To reduce audit risk to an acceptably low level. 
C) To determine whether the financial principles adopted by management in preparing the financial statements are acceptable. 
D) To obtain reasonable assurance that the financial statements taken as a whole are free from misstatement, whether due to fraud or error. 
A) To enable the auditor to express an opinion as to whether the financial statements are prepared in accordance with generally accepted accounting principles. 
B) To reduce audit risk to an acceptably low level. 
C) To determine whether the financial principles adopted by management in preparing the financial statements are acceptable. 
D) To obtain reasonable assurance that the financial statements taken as a whole are free from misstatement, whether due to fraud or error.

Question 13

An auditee's failure to give permission for the new auditor to contact the predecessor auditor may be a warning sign that the client has something to hide.

Accepted Answer

A) True 
 B)False

Question 14

Although weblogs are a rapidly growing area of the internet, the information is frequently biased, anecdotal, and speculative.Consequently, weblogs are too unreliable to be useful in identifying potential financial statement disclosure risks.

Accepted Answer

A) True 
 B)False

Question 15

Auditors try to achieve independence in appearance in order to

Accepted Answer

A) Maintain public confidence in the profession. 
B) Become independent in appearance and in fact. 
C) Comply with the generally accepted auditing examination standards. 
D) Maintain an unbiased mental attitude. 
A) Maintain public confidence in the profession. 
B) Become independent in appearance and in fact. 
C) Comply with the generally accepted auditing examination standards. 
D) Maintain an unbiased mental attitude.

Question 16

The assessment of materiality has a pervasive impact on the audit.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is not a reporting standard for an assurance engagement?

Accepted Answer

A) A conclusion whether the assertion is presented in conformity with established or stated criteria. 
B) A statement of whether the practitioner has significant reservations about the engagement. 
C) Identification of the assertion(s) being reported on. 
D) An indication by the accountant of responsibility to update the report. 
A) A conclusion whether the assertion is presented in conformity with established or stated criteria. 
B) A statement of whether the practitioner has significant reservations about the engagement. 
C) Identification of the assertion(s) being reported on. 
D) An indication by the accountant of responsibility to update the report.

Question 18

Which of the following is the first task that the auditor must accomplish to demonstrate proficiency in auditing?

Accepted Answer

A) Identify the evidence relevant for the audit of assertions that are made by management in its unaudited financial statements and notes. 
B) Design an audit program to obtain sufficient appropriate evidence about assertions management makes in financial statements and notes. 
C) Recognize the underlying assertions made by management in the financial statements and notes. 
D) Evaluate the evidence gathered in the performance of the audit program and decide whether management's assertions conform to generally accepted accounting principles and reality. 
A) Identify the evidence relevant for the audit of assertions that are made by management in its unaudited financial statements and notes. 
B) Design an audit program to obtain sufficient appropriate evidence about assertions management makes in financial statements and notes. 
C) Recognize the underlying assertions made by management in the financial statements and notes. 
D) Evaluate the evidence gathered in the performance of the audit program and decide whether management's assertions conform to generally accepted accounting principles and reality.

Question 19

The general standard of GAAS relates primarily to the personal integrity and professional qualifications of auditors.

Accepted Answer

A) True 
 B)False

Question 20

The reporting standards require that the auditor explicitly report on whether the financial statements:

Accepted Answer

A) Contain adequate disclosure of all material matters. 
B) Are in accordance with GAAP. 
C) Used principles that are appropriate for the circumstances. 
D) Were prepared on a consistent basis with the comparative year. 
A) Contain adequate disclosure of all material matters. 
B) Are in accordance with GAAP. 
C) Used principles that are appropriate for the circumstances. 
D) Were prepared on a consistent basis with the comparative year.

The primary purpose of obtaining an understanding of the company's internal controls in the financial statement audit is:

Because of the risk of material misstatement, an audit of financial statements in accordance with generally accepted auditing standards should be planned and performed with an attitude of

Williams & Co., a large international CA firm, will be subject to an external peer review.The peer review will most likely be performed by

Practice standards are a general set of standards intended to guide the audits of financial statements.

According to IFAC, which of the following is not one of the elements of quality control?

CICA Handbook S.5025 "Standards for Assurance Engagements" differs from S.5100 "Generally Accepted Auditing Standards" in that the assurance standards

A report giving conclusions about a firm's compliance with quality control standards is typical of which of the following?

Control risk is the risk that an accounting firm's quality control standards will not be adequate.

A standard unqualified audit report should be dated:

Several sources of GAAP consulted by an auditor are in conflict as to the application of an accounting principle.Which of the following should the auditor consider to be the most authoritative?

The mix between controls testing and substantive testing:

According to GAAS, the overall objective of a financial statement audit is:

An auditee's failure to give permission for the new auditor to contact the predecessor auditor may be a warning sign that the client has something to hide.

Although weblogs are a rapidly growing area of the internet, the information is frequently biased, anecdotal, and speculative.Consequently, weblogs are too unreliable to be useful in identifying potential financial statement disclosure risks.

Auditors try to achieve independence in appearance in order to

The assessment of materiality has a pervasive impact on the audit.

Which of the following statements is not a reporting standard for an assurance engagement?

Which of the following is the first task that the auditor must accomplish to demonstrate proficiency in auditing?

The general standard of GAAS relates primarily to the personal integrity and professional qualifications of auditors.

The reporting standards require that the auditor explicitly report on whether the financial statements:

Introduction to Auditing

Reports on Audited Financial Statements and Audited Internal Controlt

Professional Ethics and Auditor Responsibilities

Legal Liability

Preliminary Audit Planning: Understanding the Auditee

Assessing Risks and Internal Control

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

Revenues, Receivables, and Receipts Process

Purchases, Payables, and Payments Processtrue

Production and Payroll Process

Finance and Investment Process

Completing the Audit

Other Public Accounting Services and Reports

Fraud Awareness Auditing

Filters

Exam 2: Audit, Assurance, and Quality Control Standards

The primary purpose of obtaining an understanding of the company's internal controls in the financial statement audit is:

Because of the risk of material misstatement, an audit of financial statements in accordance with generally accepted auditing standards should be planned and performed with an attitude of

Williams & Co., a large international CA firm, will be subject to an external peer review.The peer review will most likely be performed by

Practice standards are a general set of standards intended to guide the audits of financial statements.

According to IFAC, which of the following is not one of the elements of quality control?

CICA Handbook S.5025 "Standards for Assurance Engagements" differs from S.5100 "Generally Accepted Auditing Standards" in that the assurance standards

A report giving conclusions about a firm's compliance with quality control standards is typical of which of the following?

Control risk is the risk that an accounting firm's quality control standards will not be adequate.

A standard unqualified audit report should be dated:

Several sources of GAAP consulted by an auditor are in conflict as to the application of an accounting principle.Which of the following should the auditor consider to be the most authoritative?

The mix between controls testing and substantive testing:

According to GAAS, the overall objective of a financial statement audit is:

An auditee's failure to give permission for the new auditor to contact the predecessor auditor may be a warning sign that the client has something to hide.

Although weblogs are a rapidly growing area of the internet, the information is frequently biased, anecdotal, and speculative.Consequently, weblogs are too unreliable to be useful in identifying potential financial statement disclosure risks.

Auditors try to achieve independence in appearance in order to

The assessment of materiality has a pervasive impact on the audit.

Which of the following statements is not a reporting standard for an assurance engagement?

Which of the following is the first task that the auditor must accomplish to demonstrate proficiency in auditing?

The general standard of GAAS relates primarily to the personal integrity and professional qualifications of auditors.

The reporting standards require that the auditor explicitly report on whether the financial statements:

Introduction to Auditing

Reports on Audited Financial Statements and Audited Internal Controlt

Professional Ethics and Auditor Responsibilities

Legal Liability

Preliminary Audit Planning: Understanding the Auditee

Assessing Risks and Internal Control

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

Revenues, Receivables, and Receipts Process

Purchases, Payables, and Payments Processtrue

Production and Payroll Process

Finance and Investment Process

Completing the Audit

Other Public Accounting Services and Reports

Fraud Awareness Auditing

Filters