Question 1

Which of the following events in a subsequent period is an example of a type 1 subsequent event?

Accepted Answer

A)  issuance of long-term bonds 
B)  settlement of warranties in excess of recorded amounts 
C)  purchase of a business 
D)  issuance of preferred stock 
E)  casualty loss resulting from a flood 
A)  issuance of long-term bonds 
B)  settlement of warranties in excess of recorded amounts 
C)  purchase of a business 
D)  issuance of preferred stock 
E)  casualty loss resulting from a flood

Question 2

A lawyer's refusal to respond to a letter of audit inquiry normally requires 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 client's in-house attorney 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 client's in-house attorney for the relevant information.

Question 3

Many public accounting firms have detailed financial statement checklists that are completed by the auditor who performs the initial review of the financial statements.

Accepted Answer

A) True 
 B)False

Question 4

The practice of dual dating is associated with:

Accepted Answer

A)  subsequent events between the balance sheet date and the report date. 
B)  subsequent events between the balance sheet date and the issuance of the report. 
C)  subsequent events between the report date and the issuance of the report. 
D)  the discovery of omitted procedures. 
E)  the discovery of facts existing at the report date. 
A)  subsequent events between the balance sheet date and the report date. 
B)  subsequent events between the balance sheet date and the issuance of the report. 
C)  subsequent events between the report date and the issuance of the report. 
D)  the discovery of omitted procedures. 
E)  the discovery of facts existing at the report date.

Question 5

The partner's review of the working papers should not be designed to obtain assurance that:

Accepted Answer

A)  the judgments exercised by subordinates were reasonable and appropriate in the circumstances. 
B)  the working papers support the auditor's opinion. 
C)  assistants have followed proper work paper techniques. 
D)  all significant accounting, auditing, and reporting questions raised during the audit have been properly resolved. 
E)  the work done by subordinates has been accurate and thorough. 
A)  the judgments exercised by subordinates were reasonable and appropriate in the circumstances. 
B)  the working papers support the auditor's opinion. 
C)  assistants have followed proper work paper techniques. 
D)  all significant accounting, auditing, and reporting questions raised during the audit have been properly resolved. 
E)  the work done by subordinates has been accurate and thorough.

Question 6

The starting point in making the final assessment of materiality and audit risk is to total the misstatements found in examining all accounts that were corrected by the client.

Accepted Answer

A) True 
 B)False

Question 7

Auditing standards require the auditor to conduct postaudit reviews of his or her work upon discovery of omitted procedures.

Accepted Answer

A) True 
 B)False

Question 8

During the final reviews of the working papers, the partner in charge of the engagement would ordinarily be expected to review all working papers:

Accepted Answer

A)  reviewed by managers. 
B)  prepared by managers. 
C)  prepared by seniors. 
D)  reviewed by seniors. 
E)  prepared by the staff assistants. 
A)  reviewed by managers. 
B)  prepared by managers. 
C)  prepared by seniors. 
D)  reviewed by seniors. 
E)  prepared by the staff assistants.

Question 9

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:
-Acquisition of a subsidiary on February 4 A
_____

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 10

Before reaching a final decision on the opinion to be issued, a conference generally is held with the client. At this meeting, all of the following may be expected, except:

Accepted Answer

A)  an oral report of the auditor's major findings. 
B)  the auditor's rationale for proposed adjustments or additional disclosures. 
C)  management's attempt to defend its position. 
D)  agreement between the auditor and client on the changes to be made. 
E)  delivery of the management letter. 
A)  an oral report of the auditor's major findings. 
B)  the auditor's rationale for proposed adjustments or additional disclosures. 
C)  management's attempt to defend its position. 
D)  agreement between the auditor and client on the changes to be made. 
E)  delivery of the management letter.

Question 11

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
-Willful wrongdoing by employees or management. _____

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 12

The auditor is required to obtain certain written representations from management in meeting the:

Accepted Answer

A)  first standard of field work. 
B)  third standard of field work. 
C)  third standard of reporting. 
D)  second standard of field work. 
E)  second standard of reporting. 
A)  first standard of field work. 
B)  third standard of field work. 
C)  third standard of reporting. 
D)  second standard of field work. 
E)  second standard of reporting.

Question 13

On discovery of an omitted procedure, the auditor should assess its importance to his or her ability to currently support the opinion expressed on the financial statements.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not among the specific auditing procedures the auditor performs to obtain additional audit evidence?

Accepted Answer

A)  making subsequent events review 
B)  reading minutes of meetings 
C)  reviewing evidence concerning litigation, claims, and assessments 
D)  obtaining client representation letter 
E)  performing analytical procedures 
A)  making subsequent events review 
B)  reading minutes of meetings 
C)  reviewing evidence concerning litigation, claims, and assessments 
D)  obtaining client representation letter 
E)  performing analytical procedures

Question 15

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:
-Issuance of additional capital stock on January 10
_____

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 16

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
-Intentional override of the internal control system by those in authority to the detriment of the overall objectives of the system.
_____

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 17

The auditor is required by GAAS to separately identify and communicate material weaknesses in the report to the audit committee.

Accepted Answer

A) True 
 B)False

Question 18

A rep letter may complement other auditing procedures.

Accepted Answer

A) True 
 B)False

Question 19

The auditor has no responsibility to search for items in the subsequent events period that would have an impact on the financial statements.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following subsequent events is least likely to be discovered by reading the latest interim financial statements?

Accepted Answer

A)  a new bond issue authorization 
B)  a major increase in the writeoff of receivables. 
C)  a treasury stock purchase made immediately after year-end. 
D)  the discontinuance of a product line. 
E)  the payment of a cash dividend. 
A)  a new bond issue authorization 
B)  a major increase in the writeoff of receivables. 
C)  a treasury stock purchase made immediately after year-end. 
D)  the discontinuance of a product line. 
E)  the payment of a cash dividend.

Which of the following events in a subsequent period is an example of a type 1 subsequent event?

A lawyer's refusal to respond to a letter of audit inquiry normally requires the auditor to:

Many public accounting firms have detailed financial statement checklists that are completed by the auditor who performs the initial review of the financial statements.

The practice of dual dating is associated with:

The partner's review of the working papers should not be designed to obtain assurance that:

The starting point in making the final assessment of materiality and audit risk is to total the misstatements found in examining all accounts that were corrected by the client.

Auditing standards require the auditor to conduct postaudit reviews of his or her work upon discovery of omitted procedures.

During the final reviews of the working papers, the partner in charge of the engagement would ordinarily be expected to review all working papers:

Before reaching a final decision on the opinion to be issued, a conference generally is held with the client. At this meeting, all of the following may be expected, except:

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 -Willful wrongdoing by employees or management. _____

The auditor is required to obtain certain written representations from management in meeting the:

On discovery of an omitted procedure, the auditor should assess its importance to his or her ability to currently support the opinion expressed on the financial statements.

Which of the following is not among the specific auditing procedures the auditor performs to obtain additional audit evidence?

The auditor is required by GAAS to separately identify and communicate material weaknesses in the report to the audit committee.

A rep letter may complement other auditing procedures.

The auditor has no responsibility to search for items in the subsequent events period that would have an impact on the financial statements.

Which of the following subsequent events is least likely to be discovered by reading the latest interim financial statements?

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

Which of the following events in a subsequent period is an example of a type 1 subsequent event?

A lawyer's refusal to respond to a letter of audit inquiry normally requires the auditor to:

Many public accounting firms have detailed financial statement checklists that are completed by the auditor who performs the initial review of the financial statements.

The practice of dual dating is associated with:

The partner's review of the working papers should not be designed to obtain assurance that:

The starting point in making the final assessment of materiality and audit risk is to total the misstatements found in examining all accounts that were corrected by the client.

Auditing standards require the auditor to conduct postaudit reviews of his or her work upon discovery of omitted procedures.

During the final reviews of the working papers, the partner in charge of the engagement would ordinarily be expected to review all working papers:

Before reaching a final decision on the opinion to be issued, a conference generally is held with the client. At this meeting, all of the following may be expected, except:

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 -Willful wrongdoing by employees or management. _____

The auditor is required to obtain certain written representations from management in meeting the:

On discovery of an omitted procedure, the auditor should assess its importance to his or her ability to currently support the opinion expressed on the financial statements.

Which of the following is not among the specific auditing procedures the auditor performs to obtain additional audit evidence?

The auditor is required by GAAS to separately identify and communicate material weaknesses in the report to the audit committee.

A rep letter may complement other auditing procedures.

The auditor has no responsibility to search for items in the subsequent events period that would have an impact on the financial statements.

Which of the following subsequent events is least likely to be discovered by reading the latest interim financial statements?

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