Question 1

Additional reviews of the working papers are made at the end of fieldwork by members of the audit team.

Accepted Answer

A) True 
 B)False

Question 2

GAAS does not specify specific auditing requirements for all contingencies.

Accepted Answer

A) True 
 B)False

Question 3

Listed below are examples of matters that may be reportable conditions. Indicate the nature of each event by using the following code letters:
Deficiencies in Internal Control Design
Failures in the Operation of Internal Control
-reconciliations not prepared or not prepared on a timely basis.

Accepted Answer

A) Failures in the Operation of Internal Control 
B) A system fails to provide complete and accurate output consistent with the 
A) Failures in the Operation of Internal Control 
B) A system fails to provide complete and accurate output consistent with the

Question 4

The communication of significant deficiencies must be in writing.

Accepted Answer

A) True 
 B)False

Question 5

Listed below are material events that pertain to the financial statements of the Henry Corporation as of December 31, 20X5. Your field work on this audit ended on January 31, 20X6, and your report was issued February 10, 20X6. Indicate the nature of each event by using the following code letters:
-Loss from hurricane on February 5
_____

Accepted Answer

A) Postaudit discovery of existing facts 
B) None of the above 
C) None of the above. 
D) Sale of a subsidiary on January 20 
A) Postaudit discovery of existing facts 
B) None of the above 
C) None of the above. 
D) Sale of a subsidiary on January 20

Question 6

Listed below are material events that pertain to the financial statements of the Henry Corporation as of December 31, 20X5. Your field work on this audit ended on January 31, 20X6, and your report was issued February 10, 20X6. Indicate the nature of each event by using the following code letters:
-Unfavorable settlement of 20X5 patent infringement suit on January 25
_____

Accepted Answer

A) Postaudit discovery of existing facts 
B) None of the above 
C) None of the above. 
D) Sale of a subsidiary on January 20 
A) Postaudit discovery of existing facts 
B) None of the above 
C) None of the above. 
D) Sale of a subsidiary on January 20

Question 7

Listed below are examples of matters that may be reportable conditions. Indicate the nature of each event by using the following code letters:
Deficiencies in Internal Control Design
Failures in the Operation of Internal Control
-Employees or management lack the qualifications and training to fulfill their
assigned functions.

Accepted Answer

A) Failures in the Operation of Internal Control 
B) A system fails to provide complete and accurate output consistent with the 
A) Failures in the Operation of Internal Control 
B) A system fails to provide complete and accurate output consistent with the

Question 8

The client representation letter should include representations about all of the following except:

Accepted Answer

A)  financial statements. 
B)  completeness of information. 
C)  recognition, measurement, and disclosures. 
D)  subsequent events. 
E)  major client policy changes. 
A)  financial statements. 
B)  completeness of information. 
C)  recognition, measurement, and disclosures. 
D)  subsequent events. 
E)  major client policy changes.

Question 9

The auditor's determination of misstatements in an account should include all of the following except:

Accepted Answer

A)  known misstatements. 
B)  projected uncorrected misstatements through audit sampling techniques. 
C)  estimated misstatements detected through analytical procedures and quantified by other auditing procedures. 
D)  uncorrected misstatements specifically identified through substantive tests of details of transactions and balances. 
E)  corrected misstatements specifically detected by the tests of details. 
A)  known misstatements. 
B)  projected uncorrected misstatements through audit sampling techniques. 
C)  estimated misstatements detected through analytical procedures and quantified by other auditing procedures. 
D)  uncorrected misstatements specifically identified through substantive tests of details of transactions and balances. 
E)  corrected misstatements specifically detected by the tests of details.

Question 10

In the final review process, a "cold" (or second) review is one performed by a partner from another CPA firm.

Accepted Answer

A) True 
 B)False

Question 11

The auditor is most likely to discover omitted audit procedures during:

Accepted Answer

A)  preparation of the management letter. 
B)  follow-up procedures performed in compliance with generally accepted auditing standards. 
C)  the conference held with the client prior to issuing the audit report. 
D)  a postengagement review performed as part of the firm's quality control inspection program. 
E)  the final review of the working papers. 
A)  preparation of the management letter. 
B)  follow-up procedures performed in compliance with generally accepted auditing standards. 
C)  the conference held with the client prior to issuing the audit report. 
D)  a postengagement review performed as part of the firm's quality control inspection program. 
E)  the final review of the working papers.

Question 12

Ordinarily, type 2 subsequent events require:

Accepted Answer

A)  adjustment. 
B)  adjustment and disclosure. 
C)  a disclaimer. 
D)  inclusion as a reportable condition. 
E)  disclosure. 
A)  adjustment. 
B)  adjustment and disclosure. 
C)  a disclaimer. 
D)  inclusion as a reportable condition. 
E)  disclosure.

Question 13

Listed below are material events that pertain to the financial statements of the Henry Corporation as of December 31, 20X5. Your field work on this audit ended on January 31, 20X6, and your report was issued February 10, 20X6. Indicate the nature of each event by using the following code letters:
-Additional assessment of a prior year's income tax return on February 8

Accepted Answer

A) Postaudit discovery of existing facts 
B) None of the above 
C) None of the above. 
D) Sale of a subsidiary on January 20 
A) Postaudit discovery of existing facts 
B) None of the above 
C) None of the above. 
D) Sale of a subsidiary on January 20

Question 14

Match between columns
                        Premises:  Loss from hurricane on February 5
 Sale of marketable equity securities at a loss on January 8
 Unfavorable settlement of 20X5 patent infringement suit on January 25
 Additional assessment on March 1 pertaining to the 20X4 income tax return Additional assessment on March 1 pertaining to the 20X4 income tax return
 Adverse court decision on February 15 pertaining to legality of ownership of
 Bankruptcy of major customer due to fire loss on January 15
 Issuance of additional capital stock on January 10
 Obsolescence losses on inventory on January 12 due to extended downturn in product line sales
 Resignation of chief executive officer on January 31
 Write-off of an account receivable on January 17 resulting from bankruptcy proceeding begun in 20X5
Arrest of two company officers for fraud on February 15
Acquisition of a subsidiary on February 4
Sale on January 25 of common stock investment accounted for under the equity method of accounting
Additional assessment of a prior year’s income tax return on February 8

Accepted Answer

The Answer of Postaudit discovery of existing facts and None is...

Question 15

The following steps are taken during the evaluation of the audit findings:A:Making technical review of financial statements B:Making final review(s) of working papers
C:Making final assessment of materiality and audit risk
D:Formulating opinion and drafting audit report
E:Evaluating whether there is substantial doubt about the entity's ability to continue as a going concern
The order in which these steps should be performed is:

Accepted Answer

A)  ABCDE. 
B)  CEADB. 
C)  EDCAB. 
D)  BAECD. 
E)  ADCEB. 
A)  ABCDE. 
B)  CEADB. 
C)  EDCAB. 
D)  BAECD. 
E)  ADCEB.

Question 16

The auditor relies on the client representation letter to:

Accepted Answer

A)  confirm written representations given to the auditor. 
B)  document the continuing materiality of client representations. 
C)  guarantee the absence of management fraud. 
D)  reduce the possibility of misunderstanding concerning management's representations. 
E)  replace more costly evidence gathering procedures. 
A)  confirm written representations given to the auditor. 
B)  document the continuing materiality of client representations. 
C)  guarantee the absence of management fraud. 
D)  reduce the possibility of misunderstanding concerning management's representations. 
E)  replace more costly evidence gathering procedures.

Question 17

A client's refusal to provide a client representation letter to the auditor will normally require the auditor to:

Accepted Answer

A)  issue a qualified opinion or a disclaimer of opinion. 
B)  issue an unqualified opinion with an explanatory paragraph. 
C)  issue a qualified or adverse opinion. 
D)  issue a standard three-paragraph unqualified opinion. 
E)  contact the audit committee for the relevant information. 
A)  issue a qualified opinion or a disclaimer of opinion. 
B)  issue an unqualified opinion with an explanatory paragraph. 
C)  issue a qualified or adverse opinion. 
D)  issue a standard three-paragraph unqualified opinion. 
E)  contact the audit committee for the relevant information.

Question 18

Listed below are examples of matters that may be reportable conditions. Indicate the nature of each event by using the following code letters:
Deficiencies in Internal Control Design
Failures in the Operation of Internal Control
-Inadequate provisions for the safeguarding of assets.
_____

Accepted Answer

A) Failures in the Operation of Internal Control 
B) A system fails to provide complete and accurate output consistent with the 
A) Failures in the Operation of Internal Control 
B) A system fails to provide complete and accurate output consistent with the

Question 19

Failure to record or properly disclose subsequent events in the financial statements will require the auditor to express either a qualified opinion, or a disclaimer of opinion, depending on materiality.

Accepted Answer

A) True 
 B)False

Question 20

Listed below are examples of matters that may be reportable conditions. Indicate the nature of each event by using the following code letters:
Deficiencies in Internal Control Design
Failures in the Operation of Internal Control
-Failure to safeguard assets from loss, damage, or misappropriation.
_____

Accepted Answer

A) Failures in the Operation of Internal Control 
B) A system fails to provide complete and accurate output consistent with the 
A) Failures in the Operation of Internal Control 
B) A system fails to provide complete and accurate output consistent with the

Additional reviews of the working papers are made at the end of fieldwork by members of the audit team.

GAAS does not specify specific auditing requirements for all contingencies.

Listed below are examples of matters that may be reportable conditions. Indicate the nature of each event by using the following code letters: Deficiencies in Internal Control Design Failures in the Operation of Internal Control -reconciliations not prepared or not prepared on a timely basis.

The communication of significant deficiencies must be in writing.

The client representation letter should include representations about all of the following except:

The auditor's determination of misstatements in an account should include all of the following except:

In the final review process, a "cold" (or second) review is one performed by a partner from another CPA firm.

The auditor is most likely to discover omitted audit procedures during:

Ordinarily, type 2 subsequent events require:

The auditor relies on the client representation letter to:

A client's refusal to provide a client representation letter to the auditor will normally require the auditor to:

Listed below are examples of matters that may be reportable conditions. Indicate the nature of each event by using the following code letters: Deficiencies in Internal Control Design Failures in the Operation of Internal Control -Inadequate provisions for the safeguarding of assets. _____

Failure to record or properly disclose subsequent events in the financial statements will require the auditor to express either a qualified opinion, or a disclaimer of opinion, depending on materiality.

Auditing and the Public Accounting

Financial Statement Audits and

Professional Ethics

Auditors Legal Liability

Overview of the Audit Process

Audit Evidence, Audit Objectives,

Accepting the Engagement and

Materiality Decisions and Performing Analytical Procedures

Audit Risk, Including the Risk of Fraud

Understanding Internal Controls

Audit Procedures in Response to Assessed Risks: Tests of Controls

Audit Procedures in Response to Assessed Risks: Substantive Tests

Audit Sampling in Substantive Tests

Auditing the Revenue Cycle

Auditing the Expenditure Cycle

Auditing the Production and

Auditing the Investing and

Auditing Investments and

Attest and Assurance Services, and Related Reports

Internal, Operational, and

Filters

Exam 19: Completing the Audit and Postaudit

Additional reviews of the working papers are made at the end of fieldwork by members of the audit team.

GAAS does not specify specific auditing requirements for all contingencies.

Listed below are examples of matters that may be reportable conditions. Indicate the nature of each event by using the following code letters: Deficiencies in Internal Control Design Failures in the Operation of Internal Control -reconciliations not prepared or not prepared on a timely basis.

The communication of significant deficiencies must be in writing.

The client representation letter should include representations about all of the following except:

The auditor's determination of misstatements in an account should include all of the following except:

In the final review process, a "cold" (or second) review is one performed by a partner from another CPA firm.

The auditor is most likely to discover omitted audit procedures during:

Ordinarily, type 2 subsequent events require:

The auditor relies on the client representation letter to:

A client's refusal to provide a client representation letter to the auditor will normally require the auditor to:

Listed below are examples of matters that may be reportable conditions. Indicate the nature of each event by using the following code letters: Deficiencies in Internal Control Design Failures in the Operation of Internal Control -Inadequate provisions for the safeguarding of assets. _____

Failure to record or properly disclose subsequent events in the financial statements will require the auditor to express either a qualified opinion, or a disclaimer of opinion, depending on materiality.

Auditing and the Public Accounting

Financial Statement Audits and

Professional Ethics

Auditors Legal Liability

Overview of the Audit Process

Audit Evidence, Audit Objectives,

Accepting the Engagement and

Materiality Decisions and Performing Analytical Procedures

Audit Risk, Including the Risk of Fraud

Understanding Internal Controls

Audit Procedures in Response to Assessed Risks: Tests of Controls

Audit Procedures in Response to Assessed Risks: Substantive Tests

Audit Sampling in Substantive Tests

Auditing the Revenue Cycle

Auditing the Expenditure Cycle

Auditing the Production and

Auditing the Investing and

Auditing Investments and

Attest and Assurance Services, and Related Reports

Internal, Operational, and

Filters