Question 1

What are the common judgement traps and how can they be avoided?

Accepted Answer

1.Confirmation: make opposing case and c

Question 2

If the auditor were responsible for making certain that all the assertions of management in the statements were correct,

Accepted Answer

A) bankruptcies could no longer occur. 
B) bankruptcies would be reduced to a very small number. 
C) audits would be much easier to complete. 
D) audits would not be economically practical. 
A) bankruptcies could no longer occur. 
B) bankruptcies would be reduced to a very small number. 
C) audits would be much easier to complete. 
D) audits would not be economically practical.

Question 3

When considering each material type (or class)of transaction during the audit,which general transaction-related audit objectives are assessed during the audit?

Accepted Answer

A) those transaction-related audit objectives where there is the highest risk of error 
B) all five transaction-related audit objectives 
C) those transaction-related audit objectives where there are poor internal controls 
D) primarily completeness,occurrence,and accuracy,since they typically have the most errors 
A) those transaction-related audit objectives where there is the highest risk of error 
B) all five transaction-related audit objectives 
C) those transaction-related audit objectives where there are poor internal controls 
D) primarily completeness,occurrence,and accuracy,since they typically have the most errors

Question 4

XYZ Brick Company decided to inflate sales by recording fictitious sales.Several non-existent clients were created and the sales were added into the sales journal throughout the year.The general transaction-related audit objective affected by these actions is

Accepted Answer

A) occurrence. 
B) completeness. 
C) accuracy. 
D) posting and summarization. 
A) occurrence. 
B) completeness. 
C) accuracy. 
D) posting and summarization.

Question 5

List and explain the assertions that are relevant to classes of transactions and events.

Accepted Answer

Following are the assertions relevant to

Question 6

Big Bank had a program failure occur on Sunday night due to a maintenance program error.Transaction posting was interrupted,with several errors occurring in posting to the master files.Although sales had been posted to the general ledger,individual accounts were not recorded until subsequent days.The general transaction-related audit objective affected by this activity is

Accepted Answer

A) timing. 
B) accuracy. 
C) occurrence. 
D) classification. 
A) timing. 
B) accuracy. 
C) occurrence. 
D) classification.

Question 7

The purpose of the financial statement audit is to express an opinion on

Accepted Answer

A) the accuracy of the financial statements. 
B) the balance sheet and income statement. 
C) the fairness of the financial statements. 
D) the annual report. 
A) the accuracy of the financial statements. 
B) the balance sheet and income statement. 
C) the fairness of the financial statements. 
D) the annual report.

Question 8

List and explain the assertions that are relevant to account balances.

Accepted Answer

Following are the assertions relevant to

Question 9

In comparing management fraud with employee fraud,the auditor's risk of failing to discover the fraud is greater for

Accepted Answer

A) employee fraud because of the larger number of employees in the organization. 
B) employee fraud because of the irregular hours worked by some employees. 
C) management fraud because of management's ability to override existing internal controls. 
D) management fraud because managers are inherently smarter than employees. 
A) employee fraud because of the larger number of employees in the organization. 
B) employee fraud because of the irregular hours worked by some employees. 
C) management fraud because of management's ability to override existing internal controls. 
D) management fraud because managers are inherently smarter than employees.

Question 10

Where the auditor has decided to rely upon internal controls,he or she will then

Accepted Answer

A) eliminate the need to gather evidence in that area. 
B) test the effectiveness of the controls in that area. 
C) proceed to expand the sample sizes in that area. 
D) negotiate with management to determine which controls will be tested in that area. 
A) eliminate the need to gather evidence in that area. 
B) test the effectiveness of the controls in that area. 
C) proceed to expand the sample sizes in that area. 
D) negotiate with management to determine which controls will be tested in that area.

Question 11

Georgina was working as the part-time accountant for three small businesses.Whenever she could,she pocketed cash and neglected to record the sale in the sales system.The general transaction-related audit objective affected by her actions is

Accepted Answer

A) occurrence. 
B) completeness. 
C) accuracy. 
D) posting and summarization. 
A) occurrence. 
B) completeness. 
C) accuracy. 
D) posting and summarization.

Question 12

In testing for cutoff,the objective is to determine

Accepted Answer

A) whether all of the current period's transactions are recorded. 
B) that no transactions from the prior period are included in the current period's balances. 
C) that no transactions of the current period have been delayed and recorded in a future period. 
D) whether transactions are recorded in the proper period. 
A) whether all of the current period's transactions are recorded. 
B) that no transactions from the prior period are included in the current period's balances. 
C) that no transactions of the current period have been delayed and recorded in a future period. 
D) whether transactions are recorded in the proper period.

Question 13

The sole shareholder of Jade Company had a contractor pave the parking lot at the company building as well as the driveway of his home.Both paving jobs were billed to the company on a single invoice.The general balance-related audit objective affected by this activity is

Accepted Answer

A) existence. 
B) allocation. 
C) completeness. 
D) rights and obligations. 
A) existence. 
B) allocation. 
C) completeness. 
D) rights and obligations.

Question 14

Frankinfurter Limited decided that it wanted to improve earnings.To do this,it understated its expenses by omitting unpaid expenses from the accrued liabilities account at year end.Which management assertion has been violated?

Accepted Answer

A) existence 
B) disclosure 
C) rights and obligations 
D) completeness 
A) existence 
B) disclosure 
C) rights and obligations 
D) completeness

Question 15

CAS 330,the auditor's response to assessed risks,explains that the auditor needs to link completed audit work to the assessed risks at the assertion level and

Accepted Answer

A) document the conclusions and results of the audit procedures. 
B) perform substantive procedures in areas where there is a high risk of fraud. 
C) have the reviewing partner sign off on the assessed risk. 
D) ensure that they test the entire population for areas that are considered to have a high risk of errors. 
A) document the conclusions and results of the audit procedures. 
B) perform substantive procedures in areas where there is a high risk of fraud. 
C) have the reviewing partner sign off on the assessed risk. 
D) ensure that they test the entire population for areas that are considered to have a high risk of errors.

Question 16

The responsibility for adopting a sound and appropriate financial reporting framework and corresponding accounting policies,maintaining adequate internal controls,and making fair representations in the financial statements rests

Accepted Answer

A) with management. 
B) with the auditor. 
C) equally with management and the auditor. 
D) with the internal audit department. 
A) with management. 
B) with the auditor. 
C) equally with management and the auditor. 
D) with the internal audit department.

Question 17

The reason auditors accumulate evidence is to

Accepted Answer

A) defend themselves in the event of a lawsuit. 
B) justify the conclusions they have otherwise reached. 
C) satisfy the requirements of the relevant provincial securities regulations. 
D) enable them to reach conclusions about the fairness of the financial statements and issue an appropriate audit report. 
A) defend themselves in the event of a lawsuit. 
B) justify the conclusions they have otherwise reached. 
C) satisfy the requirements of the relevant provincial securities regulations. 
D) enable them to reach conclusions about the fairness of the financial statements and issue an appropriate audit report.

Question 18

Often,numerous classes of transactions affect the ending balance of a particular general ledger account.This is handled during the audit engagement by
A)ensuring that tests are conducted for each class of transactions.
B)obtaining a high level of assurance for at least one of the transaction types.
C)using a combination of assurance for each class of transactions and for the ending balance.
D)testing only the ending balance,as this is the significant amount on the financial statements.

Accepted Answer

The answer of Often,numerous classes of transactions affect the ending...

Question 19

The auditor's assessment relating to risk of material misstatement in financial statements is a part of

Accepted Answer

A) the assessment of whether to accept the audit engagement 
B) understanding the entity and its environment 
C) the tests of controls 
D) the tests of transactions 
A) the assessment of whether to accept the audit engagement 
B) understanding the entity and its environment 
C) the tests of controls 
D) the tests of transactions

Question 20

Management assertions are

Accepted Answer

A) directly related to auditing standards. 
B) directly related to accounting standards. 
C) indirectly related to auditing standards. 
D) indirectly related to accounting standards. 
A) directly related to auditing standards. 
B) directly related to accounting standards. 
C) indirectly related to auditing standards. 
D) indirectly related to accounting standards.

What are the common judgement traps and how can they be avoided?

If the auditor were responsible for making certain that all the assertions of management in the statements were correct,

When considering each material type (or class)of transaction during the audit,which general transaction-related audit objectives are assessed during the audit?

XYZ Brick Company decided to inflate sales by recording fictitious sales.Several non-existent clients were created and the sales were added into the sales journal throughout the year.The general transaction-related audit objective affected by these actions is

List and explain the assertions that are relevant to classes of transactions and events.

The purpose of the financial statement audit is to express an opinion on

List and explain the assertions that are relevant to account balances.

In comparing management fraud with employee fraud,the auditor's risk of failing to discover the fraud is greater for

Where the auditor has decided to rely upon internal controls,he or she will then

Georgina was working as the part-time accountant for three small businesses.Whenever she could,she pocketed cash and neglected to record the sale in the sales system.The general transaction-related audit objective affected by her actions is

In testing for cutoff,the objective is to determine

The sole shareholder of Jade Company had a contractor pave the parking lot at the company building as well as the driveway of his home.Both paving jobs were billed to the company on a single invoice.The general balance-related audit objective affected by this activity is

Frankinfurter Limited decided that it wanted to improve earnings.To do this,it understated its expenses by omitting unpaid expenses from the accrued liabilities account at year end.Which management assertion has been violated?

CAS 330,the auditor's response to assessed risks,explains that the auditor needs to link completed audit work to the assessed risks at the assertion level and

The responsibility for adopting a sound and appropriate financial reporting framework and corresponding accounting policies,maintaining adequate internal controls,and making fair representations in the financial statements rests

The reason auditors accumulate evidence is to

The auditor's assessment relating to risk of material misstatement in financial statements is a part of

Management assertions are

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Professional Ethics and Legal Liability

Audit Evidence

Client Acceptance,Planning,and Materiality

Assessing the Risk of Material Misstatement

Internal Control and COSO Framework

Assessing Control Risk and Designing Test of Controls

Develop Risk Response: Audit Strategy and Audit Program

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters

Exam 4: Audit Responsibilities and Objectives

What are the common judgement traps and how can they be avoided?

If the auditor were responsible for making certain that all the assertions of management in the statements were correct,

When considering each material type (or class)of transaction during the audit,which general transaction-related audit objectives are assessed during the audit?

XYZ Brick Company decided to inflate sales by recording fictitious sales.Several non-existent clients were created and the sales were added into the sales journal throughout the year.The general transaction-related audit objective affected by these actions is

List and explain the assertions that are relevant to classes of transactions and events.

The purpose of the financial statement audit is to express an opinion on

List and explain the assertions that are relevant to account balances.

In comparing management fraud with employee fraud,the auditor's risk of failing to discover the fraud is greater for

Where the auditor has decided to rely upon internal controls,he or she will then

Georgina was working as the part-time accountant for three small businesses.Whenever she could,she pocketed cash and neglected to record the sale in the sales system.The general transaction-related audit objective affected by her actions is

In testing for cutoff,the objective is to determine

The sole shareholder of Jade Company had a contractor pave the parking lot at the company building as well as the driveway of his home.Both paving jobs were billed to the company on a single invoice.The general balance-related audit objective affected by this activity is

Frankinfurter Limited decided that it wanted to improve earnings.To do this,it understated its expenses by omitting unpaid expenses from the accrued liabilities account at year end.Which management assertion has been violated?

CAS 330,the auditor's response to assessed risks,explains that the auditor needs to link completed audit work to the assessed risks at the assertion level and

The responsibility for adopting a sound and appropriate financial reporting framework and corresponding accounting policies,maintaining adequate internal controls,and making fair representations in the financial statements rests

The reason auditors accumulate evidence is to

The auditor's assessment relating to risk of material misstatement in financial statements is a part of

Management assertions are

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Professional Ethics and Legal Liability

Audit Evidence

Client Acceptance,Planning,and Materiality

Assessing the Risk of Material Misstatement

Internal Control and COSO Framework

Assessing Control Risk and Designing Test of Controls

Develop Risk Response: Audit Strategy and Audit Program

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters