Exam 6: Audit Responsibilities and Objectives

When examining the relationships of the five cycles and general cash, the cycles have no beginning or end except at the origin or final disposition of the company.

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(True/False)

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Question 1

Correct Answer:

Verified

True

Briefly explain each management assertion related to presentation and disclosure.

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(Essay)

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Question 2

Correct Answer:

Verified

•Occurrence and rights and obligations.Disclosed events and transactions have occurred and pertain to the entity.
•Completeness.All disclosures that should have been included in the financial statements have been included.
•Accuracy and valuation.Financial and other information are disclosed appropriately and at appropriate amounts.
•Classification and understandability.Financial and other information is appropriately presented and described and disclosures are clearly expressed.

The responsibility for adopting sound accounting policies and maintaining adequate internal control rests with the:

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(Multiple Choice)

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Question 3

Correct Answer:

Verified

If the auditor has obtained a reasonable level of assurance about the fair presentation of the financial statements through understanding internal control, assessing control risk, testing controls, and analytical procedures, then the auditor:

(Multiple Choice)

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Question 4

An auditor should recognize that the application of auditing procedures may produce evidence indicating the possibility of errors or fraud and therefore should:

(Multiple Choice)

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Question 5

Auditors have found that generally the most efficient and effective way to conduct audits is to:

(Multiple Choice)

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Question 6

Which of the following statements is true regarding the distinction between general audit objectives and specific audit objectives for each class of transactions?

(Multiple Choice)

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Question 7

In testing for cutoff, the objective is to determine:

(Multiple Choice)

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Question 8

If a client has violated federal tax laws:

(Multiple Choice)

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Question 9

Which of the following statements is not true?

(Multiple Choice)

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Question 10

The auditor's first course of action when an illegal act is uncovered should be to immediately notify the appropriate authorities, including but not limited to, law enforcement and the Securities and Exchange Commission.

(True/False)

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Question 11

Auditing standards indicate that reasonable assurance is a moderate, but not absolute, level of assurance that the financial statements are free of material misstatement.

(True/False)

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Question 12

Two overriding considerations affect the many ways an auditor can accumulate evidence: 1.Sufficient appropriate evidence must be accumulated to meet the auditor's professional responsibility. 2)Cost of accumulating evidence should be minimized. In evaluating these considerations:

(Multiple Choice)

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Question 13

Auditors have a higher degree of responsibility for detecting illegal acts that have a direct effect on the financial statements than illegal acts that do not have a direct effect on the financial statements.

(True/False)

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Question 14

Because they operate the business on a daily basis, a company's management knows more about the company's transactions and related assets, liabilities, and equity than the auditors.

(True/False)

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Question 15

In the context of the audit of sales, distinguish between the occurrence and completeness transaction-related audit objectives.State the effect on the sales account (overstatement or understatement)of a violation of each objective.

(Essay)

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Question 16

If several employees collude to falsify documents, the chance a normal audit would uncover such acts is:

(Multiple Choice)

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Question 17

The auditor has considerable responsibility for notifying users as to whether or not the statements are properly stated.This imposes upon the auditor a duty to:

(Multiple Choice)

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Question 18

International auditing standards and U.S.GAAP classify assertions into three categories.Which of the following is not a category of assertions that management makes about the accounting information in financial statements?

(Multiple Choice)

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Question 19

Although auditors need to consider the interrelationships between cycles, they typically treat cycles independently to the extent practical to manage complex audits effectively.

(True/False)

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Question 20

Showing 1 - 20 of 132

Exam 6: Audit Responsibilities and Objectives

When examining the relationships of the five cycles and general cash, the cycles have no beginning or end except at the origin or final disposition of the company.

Briefly explain each management assertion related to presentation and disclosure.

The responsibility for adopting sound accounting policies and maintaining adequate internal control rests with the:

If the auditor has obtained a reasonable level of assurance about the fair presentation of the financial statements through understanding internal control, assessing control risk, testing controls, and analytical procedures, then the auditor:

An auditor should recognize that the application of auditing procedures may produce evidence indicating the possibility of errors or fraud and therefore should:

Auditors have found that generally the most efficient and effective way to conduct audits is to:

Which of the following statements is true regarding the distinction between general audit objectives and specific audit objectives for each class of transactions?

In testing for cutoff, the objective is to determine:

If a client has violated federal tax laws:

Which of the following statements is not true?

The auditor's first course of action when an illegal act is uncovered should be to immediately notify the appropriate authorities, including but not limited to, law enforcement and the Securities and Exchange Commission.

Auditing standards indicate that reasonable assurance is a moderate, but not absolute, level of assurance that the financial statements are free of material misstatement.

Two overriding considerations affect the many ways an auditor can accumulate evidence: 1.Sufficient appropriate evidence must be accumulated to meet the auditor's professional responsibility. 2)Cost of accumulating evidence should be minimized. In evaluating these considerations:

Auditors have a higher degree of responsibility for detecting illegal acts that have a direct effect on the financial statements than illegal acts that do not have a direct effect on the financial statements.

Because they operate the business on a daily basis, a company's management knows more about the company's transactions and related assets, liabilities, and equity than the auditors.

In the context of the audit of sales, distinguish between the occurrence and completeness transaction-related audit objectives.State the effect on the sales account (overstatement or understatement)of a violation of each objective.

If several employees collude to falsify documents, the chance a normal audit would uncover such acts is:

The auditor has considerable responsibility for notifying users as to whether or not the statements are properly stated.This imposes upon the auditor a duty to:

International auditing standards and U.S.GAAP classify assertions into three categories.Which of the following is not a category of assertions that management makes about the accounting information in financial statements?

Although auditors need to consider the interrelationships between cycles, they typically treat cycles independently to the extent practical to manage complex audits effectively.

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Internal Control, Control Risk, and Section 404 Audits

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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