Exam 6: Audit Responsibilities and Objectives

An exception is permissible with regards to displaying professional skepticism in audit is understandable if the auditor has experienced integrity and honesty of client management in the past.

(True/False)

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Question 81

Annual reports of many public companies contain a statement about management's responsibilities for the financial statements and their relationship with the CPA firm.

(True/False)

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Question 82

The transaction-related audit objective of timing is related to the assertion of cutoff.

(True/False)

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Question 83

The auditor has no responsibility to plan and perform the audit to obtain reasonable assurance that misstatements that are not ________ are detected.

(Multiple Choice)

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Question 84

Overconfidence is the tendency to put more weight on information that is consistent with the initial beliefs or preferences.

(True/False)

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Question 85

The detail tie-in is part of the ________ assertion for account balances.

(Multiple Choice)

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Question 86

Discuss the actions an auditor should take when an illegal act is identified or suspected.

(Essay)

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Question 87

An auditor assesses the risk of material misstatement to determine the impact on the audit plan and to determine the nature, extent, and timing of the audit procedures.

(True/False)

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Question 88

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

(True/False)

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Question 89

In obtaining reasonable assurance that the financial statements are free of material misstatement, the auditor does not need to consider the applicable legal and regulatory framework relevant to the client.

(True/False)

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Question 90

With increases in the complexity of transactions and the need for expanded disclosures about these transactions, assertions about the ________ have increased in importance.

(Multiple Choice)

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Question 91

Which of the following is an accurate statement concerning the auditor's responsibility to consider laws and regulations?

(Multiple Choice)

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Question 92

Below are five audit procedures, all of which are tests of transactions associated with the audit of the acquisition and payment cycle. Also, below are the six general transaction-related audit objectives and the five management assertions. For each audit procedure, indicate (1) its audit objective, and (2) the management assertion being tested. 1. Foot the purchases journal and trace the totals to the related general ledger accounts. (1) (2) 2. Recompute the cash discounts taken by the client. (1) (2) 3. Compare dates on cancelled checks with the bank cancellation date. (1) (2) 4. Trace from a sample of cancelled checks to the cash disbursements journal. (1) (2) 5. Examine supporting documentation for a sample of transactions for authorized payee and amount and to determine services or goods were received. (1) (2)

(Short Answer)

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Question 93

Match seven of the terms (a-k) with the definitions provided below (1-7):

use of comparisons and relationships to assess whether account balances or other data appears reasonable

management assertions

an intentional misstatement of the financial statements

error

a set of six audit objectives the auditor must meet including timing posting and summarization and accuracy

analytical procedures

Correct Answer:

Verified

use of comparisons and relationships to assess whether account balances or other data appears reasonable

an intentional misstatement of the financial statements

a set of six audit objectives the auditor must meet including timing posting and summarization and accuracy

audit procedures testing for monetary misstatements to determine whether the balance-related audit objectives have been satisfied for each significant account balance

a set of nine audit objectives the auditor must meet including completeness detail tie-in and rights and obligations

implied or expressed representations made by the client about classes of transactions account balances and disclosures in the financial statements

audit procedures designed to test the effectiveness of control policies and procedures

(Matching)

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Question 94

Why does the auditor divide the financial statements into smaller segments?

(Multiple Choice)

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Question 95

Which of the following statements best describes the auditor's responsibility regarding the detection of fraud?

(Multiple Choice)

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Question 96

Discuss three reasons why auditors are responsible for "reasonable" but not "absolute" assurance.

(Essay)

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Question 97

In which of the following situations were the financial statements not misstated?

(Multiple Choice)

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Question 98

One of the characteristics of professional skepticism is ________, which is a desire to investigate beyond the obvious.

(Multiple Choice)

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Question 99

Auditors accumulate evidence to

(Multiple Choice)

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Question 100

Showing 81 - 100 of 181

Exam 6: Audit Responsibilities and Objectives

An exception is permissible with regards to displaying professional skepticism in audit is understandable if the auditor has experienced integrity and honesty of client management in the past.

Annual reports of many public companies contain a statement about management's responsibilities for the financial statements and their relationship with the CPA firm.

The transaction-related audit objective of timing is related to the assertion of cutoff.

The auditor has no responsibility to plan and perform the audit to obtain reasonable assurance that misstatements that are not ________ are detected.

Overconfidence is the tendency to put more weight on information that is consistent with the initial beliefs or preferences.

The detail tie-in is part of the ________ assertion for account balances.

Discuss the actions an auditor should take when an illegal act is identified or suspected.

An auditor assesses the risk of material misstatement to determine the impact on the audit plan and to determine the nature, extent, and timing of the audit procedures.

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

In obtaining reasonable assurance that the financial statements are free of material misstatement, the auditor does not need to consider the applicable legal and regulatory framework relevant to the client.

With increases in the complexity of transactions and the need for expanded disclosures about these transactions, assertions about the ________ have increased in importance.

Which of the following is an accurate statement concerning the auditor's responsibility to consider laws and regulations?

Why does the auditor divide the financial statements into smaller segments?

Which of the following statements best describes the auditor's responsibility regarding the detection of fraud?

Discuss three reasons why auditors are responsible for "reasonable" but not "absolute" assurance.

In which of the following situations were the financial statements not misstated?

One of the characteristics of professional skepticism is ________, which is a desire to investigate beyond the obvious.

Auditors accumulate evidence to

The Demand for Audit and Other Assurance Services

The CPA Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Evidence

Audit Planning and Materiality

Assessing the Risk of Material Misstatement

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

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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