Exam 6: Audit Responsibilities and Objectives

As the impact from noncompliance is further removed from affecting the financial statements, the less likely the auditor is to become aware of or recognize noncompliance when auditing the financial statements.

The cycle approach to auditing

When the auditor considers whether he or she understands the form and substance of the transaction or event, and whether the relevant authoritative literature has been applied consistently by the client, he or she is performing which step in the professional judgment process?

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?

Which balance sheet accounts are included in the payroll and personnel cycle?

Which of the following is not one of the AICPA categories of assertions?

Auditors generally use a financial statement cycle approach when performing a financial statement audit. Describe the transaction flow, using specific examples, from journals to financial statements that produce financial statements.

After the auditor has completed all audit procedures, it is necessary to combine the information obtained to reach an overall conclusion as to whether the financial statements are fairly presented. This is a highly subjective process that relies heavily on

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

Which of the following is an accurate statement about professional skepticism?

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

Under the cycle approach to segmenting an audit, transactions recorded in different journals should never be combined with the general ledger balances that result from those transactions.

When comparing the auditor's responsibility for detecting employee fraud and for detecting errors, the profession has placed the responsibility

The classification balance-related audit objective

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

The posting and summarization audit objective are the auditor's counterpart to management's assertion of

Balance-related audit objectives follow from management assertions.

The general balance-related audit objective that deals with determining that details in the account balance agree with related master file amounts, foot to the total in the account balance, and agree with the total in the general ledger is the detail tie-in objective.

Which of the following assertions is described as "this assertion addresses whether all transactions that should be included in the financial statements are in fact included"?

A questioning mindset