Exam 1: CPA Auditing and Attestation Exam

Gail is auditing the financial statements of Hoefener Home Improvements, a publicly held company. Gail notes several deficiencies in internal control, and is trying to determine whether each deficiency constitutes a significant deficiency or a material weakness. Which best describes the framework Gail should use in making this evaluation?

Which of the following statements should not be included in an accountant's standard report based on the compilation of an entity's financial statements?

Which of the following controls is most likely to prevent the improper disposition of equipment?

Which of the following matters is covered in a typical comfort letter?

Six months after issuing an unqualified opinion on audited financial statements, an auditor discovered that the engagement personnel failed to confirm several of the client's material accounts receivable balances. The auditor should first:

Which of the following procedures most likely would assist an auditor in determining whether management has identified all accounting estimates that could be material to the financial statements?

Delta Life Insurance Co. prepares its financial statements on an accounting basis insurance companies use pursuant to the rules of a state insurance commission. If Wall, CPA, Delta's auditor, discovers that the statements are not suitably titled, Wall should:

This question will represent a statement, question, excerpt, or comment taken from various parts of an auditor's documentation file. Letter choices A-P represent a list of the likely sources of the statement, question, excerpt, or comment. Select, as the best answer for each item, the most likely source. Select only one source for each item. Our audit cannot be relied upon to disclose significant deficiencies in the design or operation of internal control. Nevertheless, we will communicate to you all such significant deficiencies and potential areas for improvement that we become aware of during the course of our audit.

Internal control over safeguarding of assets may include controls relating to:

Which of the following factors most likely would cause a CPA to not accept a new audit engagement?

Which of the following procedures most likely could assist an auditor in identifying related party transactions?

Which of the following is necessary in a financial statement audit?

The audit plan usually cannot be finalized until the:

Which of the following statements is correct concerning materiality in a financial statement audit?

Which of the following controls would be most effective in assuring that recorded purchases are free of material errors?

A practitioner's report on agreed-upon procedures that is in the form of procedures and findings should contain:

Selected data pertaining to Lore Co. for the calendar year 20X4 is as follows: The accounts receivable turnover for 20X4 was 5.0 times. What were Lore's 20X4 net credit sales?

Tracing copies of computer-prepared sales invoices to copies of the corresponding computer-prepared shipping documents provides evidence that:

At December 30, 20X3, Vida Co. had cash of $200,000, a current ratio of 1.5:1 and a quick ratio of .5:1. On December 31, 20X3, all cash was used to reduce accounts payable. How did these cash payments affect the ratios?

Which of the following factors is most important concerning an auditor's responsibility to detect errors and fraud?