Exam 6: Audit Responsibilities and Objectives

In order to mitigate anchoring, the auditor should consult with others, but not consider management bias.

In order to mitigate overconfidence, the auditor should challenge the opinions of experts and the underlying evidence.

Fraudulent financial reporting is most likely to be committed by whom?

The auditor is determining that the correct selling price was used for billing and that the quantity of goods shipped was the same as the quantity billed. She or he is gathering evidence about which transaction-related audit objective?

A suspension of judgment is the recognition that people's motivations and perceptions can lead them to provide biased or misleading information.

In order to mitigate availability, the auditor should consult with others and make the opposing case.

The audit objectives are the well-defined methodology for organizing an audit to ensure that the evidence gathered is sufficient and appropriate.

An audit objective focused on the balance in accounts receivable or accounts payable is a transaction-related audit objective.

Management assertions are

Misappropriation of assets are, generally, in dollar amounts which are never material to the financial statements.

General transaction-related audit objectives vary from audit to audit, depending on the nature and characteristics of the client's business and industry.

The effect of a violation of the completeness transaction-related audit objective for cash disbursements transactions would be an overstatement of cash disbursements.

Which of the following is not a characteristic of skepticism found in academic research on this subject?

Why does the auditor divide the financial statements into segments around the financial statement cycles?

The term audit objective refers to all of the following except for

Errors are usually more difficult for an auditor to detect than frauds.

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.

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

When reporting identified or suspected noncompliance,

If a client has violated federal tax laws,