Question 1

Which one of the following statements is true?

Accepted Answer

A)  Management's assertions follow and are closely related to the auditor's objectives. 
B)  The auditor's primary responsibility is to find and disclose fraudulent management assertions. 
C)  The auditor's objectives follow and are closely related to management assertions. 
D)  Assertions about presentation and disclosure deal with whether the accounts have been included in the financial statements at appropriate amounts. 
A)  Management's assertions follow and are closely related to the auditor's objectives. 
B)  The auditor's primary responsibility is to find and disclose fraudulent management assertions. 
C)  The auditor's objectives follow and are closely related to management assertions. 
D)  Assertions about presentation and disclosure deal with whether the accounts have been included in the financial statements at appropriate amounts.

Question 2

Which one of the following statements is NOT correct?

Accepted Answer

A)  It would be a violation of the completeness assertion if management recorded a sale that did not take place. 
B)  The completeness assertion deals with matters opposite the existence/occurrence assertion. 
C)  The existence/occurrence assertion is concerned with amounts that should not have been included. 
D)  The completeness assertion is concerned with the possibility of omitting items that should have been included in the financial statements. 
A)  It would be a violation of the completeness assertion if management recorded a sale that did not take place. 
B)  The completeness assertion deals with matters opposite the existence/occurrence assertion. 
C)  The existence/occurrence assertion is concerned with amounts that should not have been included. 
D)  The completeness assertion is concerned with the possibility of omitting items that should have been included in the financial statements.

Question 3

The audit objective of posting and summarisation is associated with the management assertion of presentation and disclosure.

Accepted Answer

A) True 
 B)False

Question 4

When the auditor knows that an illegal act has occurred, the first course of action by the auditor is to:

Accepted Answer

A)  withdraw from the engagement. 
B)  issue an adverse opinion. 
C)  consider the effects on the financial statements, including the adequacy of disclosure. 
D)  not report it to the proper governmental authorities. 
A)  withdraw from the engagement. 
B)  issue an adverse opinion. 
C)  consider the effects on the financial statements, including the adequacy of disclosure. 
D)  not report it to the proper governmental authorities.

Question 5

Expressing an opinion on whether the financial reports are prepared in accordance with an applicable financial reporting framework is the purpose of

Accepted Answer

A)  a compilation. 
B)  a review. 
C)  a consulting engagement. 
D)  an audit. 
A)  a compilation. 
B)  a review. 
C)  a consulting engagement. 
D)  an audit.

Question 6

Professional scepticism is an attitude that includes a critical assessment of audit evidence and should be applied when planning and performing all aspects of the engagement.

Accepted Answer

A) True 
 B)False

Question 7

How does the auditor obtain sufficient appropriate audit evidence about management assertions in the financial statements?

Accepted Answer

The auditor obtains sufficient audit evi

Question 8

After the general balance-related objectives are understood, specific objectives for each account balance on the financial statements can be developed.Which one of the following statements is true?

Accepted Answer

A)  There will be only one specific objective for each relevant general objective. 
B)  There must be two specific objectives for each general objective. 
C)  There will be many specific objectives developed for each relevant general objective. 
D)  There should be at least one specific objective for each relevant general objective. 
A)  There will be only one specific objective for each relevant general objective. 
B)  There must be two specific objectives for each general objective. 
C)  There will be many specific objectives developed for each relevant general objective. 
D)  There should be at least one specific objective for each relevant general objective.

Question 9

Which one of the following is NOT a management assertion category?

Accepted Answer

A)  account balances 
B)  classes of transactions and events 
C)  presentation and disclosure 
D)  All of the above are management assertion categories. 
A)  account balances 
B)  classes of transactions and events 
C)  presentation and disclosure 
D)  All of the above are management assertion categories.

Question 10

For the most part, auditors treat each transaction cycle:

Accepted Answer

A)  as a joint venture with other clients in the same industry. 
B)  separately as the audit is being performed. 
C)  as an interrelated unit with the other cycles throughout the entire audit. 
D)  as a separate business unit with different audit teams. 
A)  as a joint venture with other clients in the same industry. 
B)  separately as the audit is being performed. 
C)  as an interrelated unit with the other cycles throughout the entire audit. 
D)  as a separate business unit with different audit teams.

Question 11

ASA 240 describes auditors' responsibilities to detect fraud during an audit.In assessing the risk of fraud, identify two typical characteristics of fraudulent activity, and provide an example of each.

Accepted Answer

Two characteristics which increase the r

Question 12

Which one of the following statements about the existence and completeness objectives is true?

Accepted Answer

A)  Existence deals with understatements and completeness deals with overstatements. 
B)  The existence and completeness objectives both emphasise the inclusion of all transactions. 
C)  Existence deals with overstatements and completeness deals with understatements. 
D)  The completeness objective deals with transactions being recorded in their entirety. 
A)  Existence deals with understatements and completeness deals with overstatements. 
B)  The existence and completeness objectives both emphasise the inclusion of all transactions. 
C)  Existence deals with overstatements and completeness deals with understatements. 
D)  The completeness objective deals with transactions being recorded in their entirety.

Question 13

Which of the following is an example of misappropriation of assets resulting in a misstatement in the balance sheet?

Accepted Answer

A)  Cash from a cash sale was stolen, and the transaction was not recorded. 
B)  Assets were stolen, and the misappropriation was discovered. 
C)  Cash collected from a customer was stolen, and the account receivable for the customer's account was not credited. 
D)  both A and C 
A)  Cash from a cash sale was stolen, and the transaction was not recorded. 
B)  Assets were stolen, and the misappropriation was discovered. 
C)  Cash collected from a customer was stolen, and the account receivable for the customer's account was not credited. 
D)  both A and C

Question 14

Which of the following is NOT one of the five broad categories of assertions, as adapted from ASA 315?

Accepted Answer

A)  existence or occurrence 
B)  presentation and disclosure 
C)  valuation or allocation 
D)  general or specific transaction objectives 
A)  existence or occurrence 
B)  presentation and disclosure 
C)  valuation or allocation 
D)  general or specific transaction objectives

Question 15

When an auditor believes that an illegal act may have occurred, the first step he or she should take is to inquire of management at a level above those likely to be involved in the potential illegal act.

Accepted Answer

A) True 
 B)False

Question 16

Which one of the following is NOT a proper match of audit objectives with management assertions?

Accepted Answer

A)  Timing matches with valuation or allocation. 
B)  Completeness matches with completeness. 
C)  Existence matches with existence/occurrence. 
D)  Classification matches with presentation/disclosure. 
A)  Timing matches with valuation or allocation. 
B)  Completeness matches with completeness. 
C)  Existence matches with existence/occurrence. 
D)  Classification matches with presentation/disclosure.

Question 17

Which of the following is NOT an assertion relating to 'general transaction-related audit objectives'?

Accepted Answer

A)  accuracy 
B)  completeness 
C)  rights and obligations 
D)  occurrence 
A)  accuracy 
B)  completeness 
C)  rights and obligations 
D)  occurrence

Question 18

Which party enhances the confidence of financial report users?

Accepted Answer

A)  management 
B)  auditor 
C)  board of directors 
D)  audit committee 
A)  management 
B)  auditor 
C)  board of directors 
D)  audit committee

Question 19

Which of the following 'general transaction-related audit objectives' is NOT part of the valuation or allocation assertion?

Accepted Answer

A)  accuracy 
B)  timing 
C)  completeness 
D)  classification 
A)  accuracy 
B)  timing 
C)  completeness 
D)  classification

Question 20

Which management assertion is NOT associated with transaction-related audit objectives?

Accepted Answer

A)  existence or occurrence 
B)  valuation or allocation 
C)  presentation and disclosure 
D)  completeness 
A)  existence or occurrence 
B)  valuation or allocation 
C)  presentation and disclosure 
D)  completeness

Which one of the following statements is true?

Which one of the following statements is NOT correct?

The audit objective of posting and summarisation is associated with the management assertion of presentation and disclosure.

When the auditor knows that an illegal act has occurred, the first course of action by the auditor is to:

Expressing an opinion on whether the financial reports are prepared in accordance with an applicable financial reporting framework is the purpose of

Professional scepticism is an attitude that includes a critical assessment of audit evidence and should be applied when planning and performing all aspects of the engagement.

How does the auditor obtain sufficient appropriate audit evidence about management assertions in the financial statements?

After the general balance-related objectives are understood, specific objectives for each account balance on the financial statements can be developed.Which one of the following statements is true?

Which one of the following is NOT a management assertion category?

For the most part, auditors treat each transaction cycle:

ASA 240 describes auditors' responsibilities to detect fraud during an audit.In assessing the risk of fraud, identify two typical characteristics of fraudulent activity, and provide an example of each.

Which one of the following statements about the existence and completeness objectives is true?

Which of the following is an example of misappropriation of assets resulting in a misstatement in the balance sheet?

Which of the following is NOT one of the five broad categories of assertions, as adapted from ASA 315?

When an auditor believes that an illegal act may have occurred, the first step he or she should take is to inquire of management at a level above those likely to be involved in the potential illegal act.

Which one of the following is NOT a proper match of audit objectives with management assertions?

Which of the following is NOT an assertion relating to 'general transaction-related audit objectives'?

Which party enhances the confidence of financial report users?

Which of the following 'general transaction-related audit objectives' is NOT part of the valuation or allocation assertion?

Which management assertion is NOT associated with transaction-related audit objectives?

Demand for audit and assurance services

Auditors’ legal environment

Audit quality and ethics

Audit evidence

Audit planning and documentation

Materiality and risk

Internal control and control risk

Fraud auditing

The impact of information technology on the audit process

Overall audit plan and audit program

Audit of the sales and collection cycle: Tests of controls and substantive tests of transactions

Completing tests in the sales and collection cycle: Accounts receivable

Audit sampling

Audit of transaction cycles and financial statement balances I

Audit of transaction cycles and financial statement balances II

Completing the audit

Audit reporting

Other auditing and assurance engagements

Filters

Exam 4: Audit responsibilities and objectives

Which one of the following statements is true?

Which one of the following statements is NOT correct?

The audit objective of posting and summarisation is associated with the management assertion of presentation and disclosure.

When the auditor knows that an illegal act has occurred, the first course of action by the auditor is to:

Expressing an opinion on whether the financial reports are prepared in accordance with an applicable financial reporting framework is the purpose of

Professional scepticism is an attitude that includes a critical assessment of audit evidence and should be applied when planning and performing all aspects of the engagement.

How does the auditor obtain sufficient appropriate audit evidence about management assertions in the financial statements?

After the general balance-related objectives are understood, specific objectives for each account balance on the financial statements can be developed.Which one of the following statements is true?

Which one of the following is NOT a management assertion category?

For the most part, auditors treat each transaction cycle:

ASA 240 describes auditors' responsibilities to detect fraud during an audit.In assessing the risk of fraud, identify two typical characteristics of fraudulent activity, and provide an example of each.

Which one of the following statements about the existence and completeness objectives is true?

Which of the following is an example of misappropriation of assets resulting in a misstatement in the balance sheet?

Which of the following is NOT one of the five broad categories of assertions, as adapted from ASA 315?

When an auditor believes that an illegal act may have occurred, the first step he or she should take is to inquire of management at a level above those likely to be involved in the potential illegal act.

Which one of the following is NOT a proper match of audit objectives with management assertions?

Which of the following is NOT an assertion relating to 'general transaction-related audit objectives'?

Which party enhances the confidence of financial report users?

Which of the following 'general transaction-related audit objectives' is NOT part of the valuation or allocation assertion?

Which management assertion is NOT associated with transaction-related audit objectives?

Demand for audit and assurance services

Auditors’ legal environment

Audit quality and ethics

Audit evidence

Audit planning and documentation

Materiality and risk

Internal control and control risk

Fraud auditing

The impact of information technology on the audit process

Overall audit plan and audit program

Audit of the sales and collection cycle: Tests of controls and substantive tests of transactions

Completing tests in the sales and collection cycle: Accounts receivable

Audit sampling

Audit of transaction cycles and financial statement balances I

Audit of transaction cycles and financial statement balances II

Completing the audit

Audit reporting

Other auditing and assurance engagements

Filters