Question 1

Generally accepted auditing standards states that analytical procedures:

Accepted Answer

A) should be applied in the planning and final review stages of the audit and as a substantive test during the audit. 
B) should be applied in the planning and final review stages of the audit and can be used as a substantive test during the audit. 
C) should be applied in the planning stage and can be applied as a substantive test and in the final review stage. 
D) should be applied in the final review stage, and can be applied as a substantive test and in the planning stage. 
A) should be applied in the planning and final review stages of the audit and as a substantive test during the audit. 
B) should be applied in the planning and final review stages of the audit and can be used as a substantive test during the audit. 
C) should be applied in the planning stage and can be applied as a substantive test and in the final review stage. 
D) should be applied in the final review stage, and can be applied as a substantive test and in the planning stage.

Question 2

Which of the following analytical procedures most likely would be used during the planning stage of an audit?

Accepted Answer

A) Comparing current-year to prior-year sales volumes. 
B) Reading the financial statements and notes and considering the adequacy of evidence. 
C) Comparing the current-year ratio of aggregate salaries paid to the number of employees to the prior-year's ratio. 
D) Reading the letter from the client's attorney and considering the threat of litigation. 
A) Comparing current-year to prior-year sales volumes. 
B) Reading the financial statements and notes and considering the adequacy of evidence. 
C) Comparing the current-year ratio of aggregate salaries paid to the number of employees to the prior-year's ratio. 
D) Reading the letter from the client's attorney and considering the threat of litigation.

Question 3

Prior to, or in conjunction with, the information-gathering procedures for an audit, audit team members should discuss the potential for material misstatement due to fraud. Which of the following best characterizes the mind-set that the audit team should maintain during this discussion?

Accepted Answer

A) Presumptive. 
B) Judgmental. 
C) Criticizing. 
D) Questioning. 
A) Presumptive. 
B) Judgmental. 
C) Criticizing. 
D) Questioning.

Question 4

Inherent risk is the:

Accepted Answer

A) probability that some accounts are more susceptible to misstatement than others. 
B) probability that the client's internal control policies and procedures will fail to detect material misstatements. 
C) probability that material misstatements have occurred in transactions entering the accounting system used to develop financial statements. 
D) probability that the auditor may not detect material misstatements in the financial statements. 
A) probability that some accounts are more susceptible to misstatement than others. 
B) probability that the client's internal control policies and procedures will fail to detect material misstatements. 
C) probability that material misstatements have occurred in transactions entering the accounting system used to develop financial statements. 
D) probability that the auditor may not detect material misstatements in the financial statements.

Question 5

Why is it important for auditors to understand their clients' business risks?

Accepted Answer

Auditing standards recognize that most b

Question 6

Which of the following accounts tends to be most predictable for purposes of analytical procedures?

Accepted Answer

A) Accounts receivable. 
B) Travel and entertainment expense. 
C) Interest expense. 
D) Income taxes payable. 
A) Accounts receivable. 
B) Travel and entertainment expense. 
C) Interest expense. 
D) Income taxes payable.

Question 7

Analytical procedures are audit methods of evaluating financial statement accounts by studying and comparing relationships among financial and nonfinancial data. The primary purpose of analytical procedures conducted during the planning stages is to:

Accepted Answer

A) identify the appropriate schedules to be prepared by the client. 
B) identify the types of errors or frauds that can occur in transactions. 
C) identify unusual conditions that deserve additional audit effort. 
D) determine the existence of unrecorded liabilities or overstated assets. 
A) identify the appropriate schedules to be prepared by the client. 
B) identify the types of errors or frauds that can occur in transactions. 
C) identify unusual conditions that deserve additional audit effort. 
D) determine the existence of unrecorded liabilities or overstated assets.

Generally accepted auditing standards states that analytical procedures:

Which of the following analytical procedures most likely would be used during the planning stage of an audit?

Prior to, or in conjunction with, the information-gathering procedures for an audit, audit team members should discuss the potential for material misstatement due to fraud. Which of the following best characterizes the mind-set that the audit team should maintain during this discussion?

Inherent risk is the:

Why is it important for auditors to understand their clients' business risks?

Which of the following accounts tends to be most predictable for purposes of analytical procedures?

Analytical procedures are audit methods of evaluating financial statement accounts by studying and comparing relationships among financial and nonfinancial data. The primary purpose of analytical procedures conducted during the planning stages is to:

Auditing and Assurance Services

Professional Standards

Engagement Planning

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash 227

Revenue and Collection Cycle 279

Acquisition and Expenditure Cycle 336

Production Cycle 394

Finance and Investment Cycle 443

Completing the Audit 500

Reports on Audited Financial Statements

Filters

Exam 4: Management Fraud and Audit Risk

Generally accepted auditing standards states that analytical procedures:

Which of the following analytical procedures most likely would be used during the planning stage of an audit?

Prior to, or in conjunction with, the information-gathering procedures for an audit, audit team members should discuss the potential for material misstatement due to fraud. Which of the following best characterizes the mind-set that the audit team should maintain during this discussion?

Inherent risk is the:

Why is it important for auditors to understand their clients' business risks?

Which of the following accounts tends to be most predictable for purposes of analytical procedures?

Analytical procedures are audit methods of evaluating financial statement accounts by studying and comparing relationships among financial and nonfinancial data. The primary purpose of analytical procedures conducted during the planning stages is to:

Auditing and Assurance Services

Professional Standards

Engagement Planning

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash 227

Revenue and Collection Cycle 279

Acquisition and Expenditure Cycle 336

Production Cycle 394

Finance and Investment Cycle 443

Completing the Audit 500

Reports on Audited Financial Statements

Filters