A) is the risk after considering the effectiveness of top management controls. B) is the risk that the client's internal controls will fail. C) can include a new technology which threatens to erode a company's competitive advantage. D) cannot be mitigated by management. A) is the risk after considering the effectiveness of top management controls. B) is the risk that the client's internal controls will fail. C) can include a new technology which threatens to erode a company's competitive advantage. D) cannot be mitigated by management.

Exam 8: Audit Planning and Analytical Procedures

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When a successor auditor requests information from a company's previous auditor, and there are legal problems or disputes between the client and the predecessor auditor, the predecessor auditor's response to the new auditor may be limited to stating that no information will be provided.

(True/False)

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Question 81

The purpose of an engagement letter is to:

(Multiple Choice)

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Question 82

Smith, CPA has requested permission to communicate with the predecessor auditor in order to review certain workpapers for high risk accounts for a new audit client.The new audit client's refusal to allow this communication to occur would impact Rodgers decision concerning:

(Multiple Choice)

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Question 83

Which is usually included in the engagement letter?

(Multiple Choice)

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Question 84

If an auditor is requested to perform nonaudit services for a public company audit client, who is responsible for agreeing to those services with the audit firm?

(Multiple Choice)

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Question 85

The auditor is likely to accumulate more evidence when the audit is for a company:

(Multiple Choice)

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Question 86

Auditors routinely conduct analytical procedures in the planning, testing, and completion phases of the audit.Identify the primary and secondary purposes of performing analytical procedures in each phase of the audit.

(Essay)

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Question 87

One purpose of performing preliminary analytical procedures in the planning phase of an audit is to help the auditor make a preliminary assessment of control risk.

(True/False)

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Question 88

The auditor uses knowledge gained from the understanding of the client's business and industry to assess:

(Multiple Choice)

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Question 89

Business risk:

(Multiple Choice)

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Question 90

The major concern when using nonfinancial data in analytical procedures is the:

(Multiple Choice)

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Question 91

Which of the following statements is not correct with respect to analytical procedures?

(Multiple Choice)

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Question 92

The quick ratio has the same denominator as the current ratio.

(True/False)

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Question 93

Discuss the required communications between predecessor and successor auditors.

(Essay)

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Question 94

A measure of the auditor's assessment of the likelihood that there are material misstatements in an account before considering the effectiveness of the client's internal control is called:

(Multiple Choice)

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Question 95

Before accepting a new client, most CPA firms investigate the company to determine its acceptability.However, AICPA confidentiality requirements prohibit CPA firms from contacting certain parties-namely the company's attorneys and bankers-during this investigation.

(True/False)

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Question 96

Initial audit planning involves four matters.Which of the following is not one of these?

(Multiple Choice)

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Question 97

Because of the requirements of Rule 201 of the AICPA's Code of Professional Conduct which state that auditors should "undertake only those professional services that the member or the member's firm can reasonably expect to be completed with professional competence," auditors are not normally permitted to consult with, or rely on the work of, outside specialists during an audit engagement.

(True/False)

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Question 98

An auditor has accessed client business risk and the risk of material misstatements to the clients financial statements.These are done in order to:

(Multiple Choice)

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Question 99

The two major factors affecting acceptable audit risk are:

(Multiple Choice)

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Question 100

Showing 81 - 100 of 102

Exam 8: Audit Planning and Analytical Procedures

When a successor auditor requests information from a company's previous auditor, and there are legal problems or disputes between the client and the predecessor auditor, the predecessor auditor's response to the new auditor may be limited to stating that no information will be provided.

The purpose of an engagement letter is to:

Smith, CPA has requested permission to communicate with the predecessor auditor in order to review certain workpapers for high risk accounts for a new audit client.The new audit client's refusal to allow this communication to occur would impact Rodgers decision concerning:

Which is usually included in the engagement letter?

If an auditor is requested to perform nonaudit services for a public company audit client, who is responsible for agreeing to those services with the audit firm?

The auditor is likely to accumulate more evidence when the audit is for a company:

Auditors routinely conduct analytical procedures in the planning, testing, and completion phases of the audit.Identify the primary and secondary purposes of performing analytical procedures in each phase of the audit.

One purpose of performing preliminary analytical procedures in the planning phase of an audit is to help the auditor make a preliminary assessment of control risk.

The auditor uses knowledge gained from the understanding of the client's business and industry to assess:

Business risk:

The major concern when using nonfinancial data in analytical procedures is the:

Which of the following statements is not correct with respect to analytical procedures?

The quick ratio has the same denominator as the current ratio.

Discuss the required communications between predecessor and successor auditors.

A measure of the auditor's assessment of the likelihood that there are material misstatements in an account before considering the effectiveness of the client's internal control is called:

Before accepting a new client, most CPA firms investigate the company to determine its acceptability.However, AICPA confidentiality requirements prohibit CPA firms from contacting certain parties-namely the company's attorneys and bankers-during this investigation.

Initial audit planning involves four matters.Which of the following is not one of these?

An auditor has accessed client business risk and the risk of material misstatements to the clients financial statements.These are done in order to:

The two major factors affecting acceptable audit risk are:

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

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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