Question 1

In planning an effective audit which of the following occurs first?

Accepted Answer

A) Determine the acceptability of the financial reporting framework used. 
B) Decide whether to accept or retain the client. 
C) Understand the auditee's business. 
D) Assess materiality. 
A) Determine the acceptability of the financial reporting framework used. 
B) Decide whether to accept or retain the client. 
C) Understand the auditee's business. 
D) Assess materiality.

Question 2

Practice inspection is something a new auditor does as part of their training program.

Accepted Answer

A) True 
 B)False

Question 3

Assurance standards require a sufficient understanding of the internal control system be obtained to plan assurance work.

Accepted Answer

A) True 
 B)False

Question 4

An external auditor is conducting an audit of the financial statements of Camden
Corporation.The external auditor is expected to

Accepted Answer

A) Certify the correctness of Camden's financial statements. 
B) Make a 100% examination of Camden's records. 
C) Give an opinion on whether Camden's financial statements are fairly presented in all material respects. 
D) Give an opinion on the attractiveness of Camden for investment purposes and critique the wisdom and legality of its business decisions. 
A) Certify the correctness of Camden's financial statements. 
B) Make a 100% examination of Camden's records. 
C) Give an opinion on whether Camden's financial statements are fairly presented in all material respects. 
D) Give an opinion on the attractiveness of Camden for investment purposes and critique the wisdom and legality of its business decisions.

Question 5

The concept of professional skepticism is based on the assumption that a potential conflict of interest always exists between the auditor and the management of the business under audit.

Accepted Answer

A) True 
 B)False

Question 6

In establishing a quality control system, which area should be of a secondary nature?

Accepted Answer

A) Creating an independence and objectivity checklist. 
B) Creating a program for continuing professional education. 
C) Creating an internal review process. 
D) Controlling access to client files. 
A) Creating an independence and objectivity checklist. 
B) Creating a program for continuing professional education. 
C) Creating an internal review process. 
D) Controlling access to client files.

Question 7

The CICA Handbook recommendations are a step by step list of procedures auditors have to complete for each engagement.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements best explains an unqualified report opinion?

Accepted Answer

A) The financial statements contain a departure from GAAP. 
B) The auditor was unable to complete the work necessary to form a complete opinion. 
C) The auditor was not aware of any reasons not to believe the statements are correct. 
D) Based on the evidence obtained the auditor believes the statements are free of material error. 
A) The financial statements contain a departure from GAAP. 
B) The auditor was unable to complete the work necessary to form a complete opinion. 
C) The auditor was not aware of any reasons not to believe the statements are correct. 
D) Based on the evidence obtained the auditor believes the statements are free of material error.

Question 9

For the audit of a for profit company, materiality should be set:

Accepted Answer

A) To 5% of profit or 1% of sales 
B) By the field auditor once they begin to gather evidence. 
C) By the client's board of directors who represent the shareholders. 
D) Based on both quantitative and qualitative criteria. 
A) To 5% of profit or 1% of sales 
B) By the field auditor once they begin to gather evidence. 
C) By the client's board of directors who represent the shareholders. 
D) Based on both quantitative and qualitative criteria.

Question 10

An assurance engagement is one in which a CA is engaged to

Accepted Answer

A) Issue a written communication expressing a conclusion concerning a subject matter for which an accountable party is responsible. 
B) Provide tax advice or prepare a tax return based on financial information the CA has not audited or reviewed. 
C) Testify as an expert witness in accounting, auditing, or tax matters, given certain stipulated facts. 
D) Assemble prospective financial statements based on the assumptions of the entity's management without expressing any assurance. 
A) Issue a written communication expressing a conclusion concerning a subject matter for which an accountable party is responsible. 
B) Provide tax advice or prepare a tax return based on financial information the CA has not audited or reviewed. 
C) Testify as an expert witness in accounting, auditing, or tax matters, given certain stipulated facts. 
D) Assemble prospective financial statements based on the assumptions of the entity's management without expressing any assurance.

Question 11

Control risk is

Accepted Answer

A) The probability that a material misstatement could occur and not be prevented or detected by the company's internal control policies and procedures. 
B) The probability that a material misstatement could occur and not be detected by the auditor's audit procedures. 
C) The risk that the auditor will not be able to complete the audit on a timely basis. 
D) The risk that the auditor will not properly control the staff on the audit engagement. 
A) The probability that a material misstatement could occur and not be prevented or detected by the company's internal control policies and procedures. 
B) The probability that a material misstatement could occur and not be detected by the auditor's audit procedures. 
C) The risk that the auditor will not be able to complete the audit on a timely basis. 
D) The risk that the auditor will not properly control the staff on the audit engagement.

Question 12

Auditors must still take responsibility for their opinion about conformity with GAAP when they give an adverse opinion.

Accepted Answer

A) True 
 B)False

Question 13

The fourth reporting standard requires the audit report to comment on the consistency of the accounting principles used in preparing the financial statements.

Accepted Answer

A) True 
 B)False

In planning an effective audit which of the following occurs first?

Practice inspection is something a new auditor does as part of their training program.

Assurance standards require a sufficient understanding of the internal control system be obtained to plan assurance work.

An external auditor is conducting an audit of the financial statements of Camden Corporation.The external auditor is expected to

The concept of professional skepticism is based on the assumption that a potential conflict of interest always exists between the auditor and the management of the business under audit.

In establishing a quality control system, which area should be of a secondary nature?

The CICA Handbook recommendations are a step by step list of procedures auditors have to complete for each engagement.

Which of the following statements best explains an unqualified report opinion?

For the audit of a for profit company, materiality should be set:

An assurance engagement is one in which a CA is engaged to

Control risk is

Auditors must still take responsibility for their opinion about conformity with GAAP when they give an adverse opinion.

The fourth reporting standard requires the audit report to comment on the consistency of the accounting principles used in preparing 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

In planning an effective audit which of the following occurs first?

Practice inspection is something a new auditor does as part of their training program.

Assurance standards require a sufficient understanding of the internal control system be obtained to plan assurance work.

An external auditor is conducting an audit of the financial statements of Camden Corporation.The external auditor is expected to

The concept of professional skepticism is based on the assumption that a potential conflict of interest always exists between the auditor and the management of the business under audit.

In establishing a quality control system, which area should be of a secondary nature?

The CICA Handbook recommendations are a step by step list of procedures auditors have to complete for each engagement.

Which of the following statements best explains an unqualified report opinion?

For the audit of a for profit company, materiality should be set:

An assurance engagement is one in which a CA is engaged to

Control risk is

Auditors must still take responsibility for their opinion about conformity with GAAP when they give an adverse opinion.

The fourth reporting standard requires the audit report to comment on the consistency of the accounting principles used in preparing 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