Question 1

A CPA wishes to use a representation letter as a substitute for performing other audit procedures.Doing so:

Accepted Answer

A) Violates professional standards. 
B) Is acceptable,but should only be done when cost justified. 
C) Is acceptable,but only for non-public clients. 
D) Is acceptable and desirable under all conditions. 
A) Violates professional standards. 
B) Is acceptable,but should only be done when cost justified. 
C) Is acceptable,but only for non-public clients. 
D) Is acceptable and desirable under all conditions.

Question 2

Based on the previous information,which of the following preliminary conclusions can the auditor use as a basis for further investigations?

Accepted Answer

A) Sales per store are directly related to the size of the store. 
B) Sale clerks are less productive in larger size stores. 
C) Gross margin is directly related to the size of the store. 
D) Average square feet of store correlates with the number of stores in the district. 
A) Sales per store are directly related to the size of the store. 
B) Sale clerks are less productive in larger size stores. 
C) Gross margin is directly related to the size of the store. 
D) Average square feet of store correlates with the number of stores in the district.

Question 3

Which of the following is not a function of working papers?

Accepted Answer

A) Provide support for the auditors' report. 
B) Provide support for the accounting records. 
C) Aid partners in planning and conducting future audits. 
D) Document staff compliance with generally accepted auditing standards. 
A) Provide support for the auditors' report. 
B) Provide support for the accounting records. 
C) Aid partners in planning and conducting future audits. 
D) Document staff compliance with generally accepted auditing standards.

Question 4

For each of the audit procedures listed below select the type of audit procedure,if any,that the auditor performed.A type of audit procedure may be selected once or not at all.
-The auditor selected a sample of invoices and agreed the vendor to the approved vendor list,as had been required by the client's internal control procedures.

Accepted Answer

A) Inspection of tangible assets 
B) Observation 
C) Recalculation 
D) Inquiry 
E) Inspection of records or documents
F)Reperformance
G)Analytical procedures 
A) Inspection of tangible assets 
B) Observation 
C) Recalculation 
D) Inquiry 
E) Inspection of records or documents
F)Reperformance
G)Analytical procedures

Question 5

Auditors can mitigate risk,like the failure to detect material dollar errors in the financial statements,by doing what?

Accepted Answer

A) Performing substantive procedures. 
B) Performing tests of controls. 
C) Assessing control risk. 
D) Obtaining a client representation letter. 
A) Performing substantive procedures. 
B) Performing tests of controls. 
C) Assessing control risk. 
D) Obtaining a client representation letter.

Question 6

For each of the audit procedures listed below select the type of audit procedure,if any,that the auditor performed.A type of audit procedure may be selected once or not at all.
-During the physical inventory count,the auditor requested that certain containers of inventory items be opened to ensure they were not empty.

Accepted Answer

A) Inspection of tangible assets 
B) Observation 
C) Recalculation 
D) Inquiry 
E) Inspection of records or documents
F)Reperformance
G)Analytical procedures 
A) Inspection of tangible assets 
B) Observation 
C) Recalculation 
D) Inquiry 
E) Inspection of records or documents
F)Reperformance
G)Analytical procedures

Question 7

Analytical procedures are required at the risk assessment stage and as:

Accepted Answer

A) Tests of internal control. 
B) Substantive procedures. 
C) Procedures near the end of the audit. 
D) Computer generated procedures. 
A) Tests of internal control. 
B) Substantive procedures. 
C) Procedures near the end of the audit. 
D) Computer generated procedures.

Question 8

In auditing an asset valued at fair value,which of the following potentially provides the auditor with the strongest evidence?

Accepted Answer

A) A price for a similar asset obtained from an active market. 
B) An appraisal obtained discounting future cash flows. 
C) Management's judgment of the cost to purchase an equivalent asset. 
D) The historical cost of the asset. 
A) A price for a similar asset obtained from an active market. 
B) An appraisal obtained discounting future cash flows. 
C) Management's judgment of the cost to purchase an equivalent asset. 
D) The historical cost of the asset.

Question 9

Working papers used by the auditor that record the procedures used to gather evidence should be:

Accepted Answer

A) Considered the primary support for the financial statements being examined. 
B) Viewed as the connecting link between the books of account and the financial statements. 
C) Designed to meet the circumstances of the particular engagement. 
D) Destroyed when the audited entity ceases to be a client. 
A) Considered the primary support for the financial statements being examined. 
B) Viewed as the connecting link between the books of account and the financial statements. 
C) Designed to meet the circumstances of the particular engagement. 
D) Destroyed when the audited entity ceases to be a client.

Question 10

Which of the following is not considered to be an analytical procedure?

Accepted Answer

A) Comparisons of financial statement amounts with source documents. 
B) Comparisons of financial statement amounts with nonfinancial data. 
C) Comparisons of financial statement amounts with budgeted amounts. 
D) Comparisons of financial statement amounts with comparable prior year amounts. 
A) Comparisons of financial statement amounts with source documents. 
B) Comparisons of financial statement amounts with nonfinancial data. 
C) Comparisons of financial statement amounts with budgeted amounts. 
D) Comparisons of financial statement amounts with comparable prior year amounts.

Question 11

During an audit,the working papers are primarily considered to be:

Accepted Answer

A) A client-owned record of conclusions reached by the auditors who performed the engagement. 
B) Evidence supporting financial statements. 
C) Support for the auditors' representations as to compliance with generally accepted auditing standards. 
D) A record to be used as a basis for the following year's engagement. 
A) A client-owned record of conclusions reached by the auditors who performed the engagement. 
B) Evidence supporting financial statements. 
C) Support for the auditors' representations as to compliance with generally accepted auditing standards. 
D) A record to be used as a basis for the following year's engagement.

Question 12

The auditors use analytical procedures during the course of an audit.The most important phase of performing these procedures is the:

Accepted Answer

A) Vouching of all data supporting various ratios. 
B) Investigation of significant variations and unusual relationships. 
C) Comparison of client-computed statistics with industry data on a quarterly and full-year basis. 
D) Recalculation of industry date. 
A) Vouching of all data supporting various ratios. 
B) Investigation of significant variations and unusual relationships. 
C) Comparison of client-computed statistics with industry data on a quarterly and full-year basis. 
D) Recalculation of industry date.

A CPA wishes to use a representation letter as a substitute for performing other audit procedures.Doing so:

Based on the previous information,which of the following preliminary conclusions can the auditor use as a basis for further investigations?

Which of the following is not a function of working papers?

Auditors can mitigate risk,like the failure to detect material dollar errors in the financial statements,by doing what?

Analytical procedures are required at the risk assessment stage and as:

In auditing an asset valued at fair value,which of the following potentially provides the auditor with the strongest evidence?

Working papers used by the auditor that record the procedures used to gather evidence should be:

Which of the following is not considered to be an analytical procedure?

During an audit,the working papers are primarily considered to be:

The auditors use analytical procedures during the course of an audit.The most important phase of performing these procedures is the:

The Role of the Public Accountant in the American Economy

Professional Standards

Professional Ethics

Legal Liability of Cpas

Audit Planning, understanding the Client, assessing Risks, and Responding

Internal Control

Consideration of Internal Control in an Information Technology Environment

Audit Sampling

Cash and Financial Investments

Accounts Receivable, notes Receivable, and Revenue

Inventories and Cost of Goods Sold

Property,plant,and Equipment: Depreciation and Depletion

Accounts Payable and Other Liabilities

Debt and Equity Capital

Auditing Operations and Completing the Audit

Auditors Reports

Integrated Audits of Public Companies

Additional Assurance Services: Historical Financial Information

Additional Assurance Services: Other Information

Internal, operational, and Compliance Auditing

Filters

Exam 5: Audit Evidence and Documentation

A CPA wishes to use a representation letter as a substitute for performing other audit procedures.Doing so:

Based on the previous information,which of the following preliminary conclusions can the auditor use as a basis for further investigations?

Which of the following is not a function of working papers?

Auditors can mitigate risk,like the failure to detect material dollar errors in the financial statements,by doing what?

Analytical procedures are required at the risk assessment stage and as:

In auditing an asset valued at fair value,which of the following potentially provides the auditor with the strongest evidence?

Working papers used by the auditor that record the procedures used to gather evidence should be:

Which of the following is not considered to be an analytical procedure?

During an audit,the working papers are primarily considered to be:

The auditors use analytical procedures during the course of an audit.The most important phase of performing these procedures is the:

The Role of the Public Accountant in the American Economy

Professional Standards

Professional Ethics

Legal Liability of Cpas

Audit Planning, understanding the Client, assessing Risks, and Responding

Internal Control

Consideration of Internal Control in an Information Technology Environment

Audit Sampling

Cash and Financial Investments

Accounts Receivable, notes Receivable, and Revenue

Inventories and Cost of Goods Sold

Property,plant,and Equipment: Depreciation and Depletion

Accounts Payable and Other Liabilities

Debt and Equity Capital

Auditing Operations and Completing the Audit

Auditors Reports

Integrated Audits of Public Companies

Additional Assurance Services: Historical Financial Information

Additional Assurance Services: Other Information

Internal, operational, and Compliance Auditing

Filters