Question 1

The concept of reasonable assurance indicates that the auditor is:

Accepted Answer

A) not a guarantor of the correctness of the financial statements. 
B) not responsible for the fairness of the financial statements. 
C) responsible only for issuing an opinion on the financial statements. 
D) responsible for finding all misstatements. 
A) not a guarantor of the correctness of the financial statements. 
B) not responsible for the fairness of the financial statements. 
C) responsible only for issuing an opinion on the financial statements. 
D) responsible for finding all misstatements.

Question 2

Tests of details of balances typically involve the use of comparisons and relationships to assess the overall reasonableness of account balances.

Accepted Answer

A) True 
 B)False

Question 3

Rights and obligations is the only balance-related assertion without a similar transaction related assertion.

Accepted Answer

A) True 
 B)False

Question 4

Audits are expected to provide a higher degree of assurance for the detection of material frauds than is provided for an equally material error.

Accepted Answer

A) True 
 B)False

Question 5

When an auditor knows that an illegal act has occurred, she must:

Accepted Answer

A) report it to the proper governmental authorities. 
B) consider the effects on the financial statements, including the adequacy of disclosure. 
C) withdraw from the engagement. 
D) issue an adverse opinion. 
A) report it to the proper governmental authorities. 
B) consider the effects on the financial statements, including the adequacy of disclosure. 
C) withdraw from the engagement. 
D) issue an adverse opinion.

Question 6

Briefly explain each management assertion related to account balances at period end.

Accepted Answer

•Existence.Assets, liabilities, and equi

Question 7

If a sale was for a valid shipment, but the amount of the sales invoice was calculated incorrectly, the accuracy objective was violated.

Accepted Answer

A) True 
 B)False

Question 8

Other than inquiring of management about policies they have established to prevent illegal acts and whether management knows of any laws or regulations that the company has violated, the auditor should not search for illegal acts that do not have a direct effect on the financial statements unless there is reason to believe they may exist.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true of a public company's financial statements?

Accepted Answer

A) Sarbanes-Oxley requires the CEO only to certify the financial statements. 
B) Sarbanes-Oxley requires the CFO only to certify the financial statements. 
C) Sarbanes-Oxley requires the CEO and CFO to certify the financial statements. 
D) Sarbanes-Oxley requires neither the CEO nor the CFO to certify the financial statements. 
A) Sarbanes-Oxley requires the CEO only to certify the financial statements. 
B) Sarbanes-Oxley requires the CFO only to certify the financial statements. 
C) Sarbanes-Oxley requires the CEO and CFO to certify the financial statements. 
D) Sarbanes-Oxley requires neither the CEO nor the CFO to certify the financial statements.

Question 10

The objective of the audit of financial statements by an independent auditor is to verify that the financial statements are free of misstatements and accurately represent the company's financial position and results of operations.

Accepted Answer

A) True 
 B)False

Question 11

Describe what analytical procedures and tests of details of balances are and give an example of each.

Accepted Answer

Analytical procedures consist of evaluat

Question 12

Under the cycle approach, the only accounts that have two or more cycles associated with them are cash and accounts receivable.

Accepted Answer

A) True 
 B)False

The concept of reasonable assurance indicates that the auditor is:

Tests of details of balances typically involve the use of comparisons and relationships to assess the overall reasonableness of account balances.

Rights and obligations is the only balance-related assertion without a similar transaction related assertion.

Audits are expected to provide a higher degree of assurance for the detection of material frauds than is provided for an equally material error.

When an auditor knows that an illegal act has occurred, she must:

Briefly explain each management assertion related to account balances at period end.

If a sale was for a valid shipment, but the amount of the sales invoice was calculated incorrectly, the accuracy objective was violated.

Which of the following statements is true of a public company's financial statements?

The objective of the audit of financial statements by an independent auditor is to verify that the financial statements are free of misstatements and accurately represent the company's financial position and results of operations.

Describe what analytical procedures and tests of details of balances are and give an example of each.

Under the cycle approach, the only accounts that have two or more cycles associated with them are cash and accounts receivable.

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

Filters

Exam 6: Audit Responsibilities and Objectives

The concept of reasonable assurance indicates that the auditor is:

Tests of details of balances typically involve the use of comparisons and relationships to assess the overall reasonableness of account balances.

Rights and obligations is the only balance-related assertion without a similar transaction related assertion.

Audits are expected to provide a higher degree of assurance for the detection of material frauds than is provided for an equally material error.

When an auditor knows that an illegal act has occurred, she must:

Briefly explain each management assertion related to account balances at period end.

If a sale was for a valid shipment, but the amount of the sales invoice was calculated incorrectly, the accuracy objective was violated.

Which of the following statements is true of a public company's financial statements?

The objective of the audit of financial statements by an independent auditor is to verify that the financial statements are free of misstatements and accurately represent the company's financial position and results of operations.

Describe what analytical procedures and tests of details of balances are and give an example of each.

Under the cycle approach, the only accounts that have two or more cycles associated with them are cash and accounts receivable.

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

Filters