Exam 5: Professional Auditing Standards and the Audit Opinion Formulation Process

What are the PCAOB standards that present guidance in testing assertions and planning for the audit are known as?

In performing substantive tests on account balances, the auditor performs tests for all five assertions.

Assertions are relevant to the audit process because they are the representations of management embodied in the financial statements.

The effectiveness of entity-wide controls may reduce the extent of testing of transaction controls.

The standards of competence, independence, and due professional care are covered by which section of the generally accepted auditing standards?

In an integrated audit, the auditor issues an opinion on both the financial statements and internal control.

Which one of the following organizations provides auditing standards for public companies?

Which of the following would not be a factor in whether a control weakness would be considered to be a material weakness as opposed to a significant deficiency?

There are nine specific actions an auditor can undertake to collect evidence. Identify each action and provide an example.

The first stage in an audit is performing a risk assessment.

The PCAOB's second fieldwork standard requires auditors develop an understanding of the client's controls as an important prerequisite to developing specific audit tests.

The common purpose of audit standards created by the various authorities is to provide reasonable assurance that audits are conducted in a quality manner.

Which assertion is most closely related to the determination of the adequacy of the allowance for doubtful accounts?

Which of the following is not a question an auditor considers in deciding whether to pursue a lower control risk approach prior to substantive testing?

An audit must be performed by persons who can make sound judgments relating to complex accounting issues.

The first general standard of the PCAOB requires that an audit be performed by which type of person?

Which of the following is a procedure which analyzes plausible relationships among financial and nonfinancial data?

Which of the following groups are committed to the convergence of the auditing standards?

What are the three broad types of audit procedures? What is the purpose of each test?

If the auditor's assessment is that there is high risk due to the subjectivity of the accounting process, substantive procedures should be more rigorous.