Exam 1: Auditing and Assurance Services

Which of the following is not an ASB assertion about inventory related to presentation and disclosure?

The engineering department at Omni Company built a piece of equipment in the company's own shop for use in the company's operations.When looking at the ending balance for the fixed asset account the auditor examined all work orders,purchased materials,labor cost reports,and applied overhead that were capitalized as part of the equipment costs.Which of the following is the ASB balance assertion most closely related to the auditor's testing?

An auditor traces the serial numbers on equipment to a nonissuer's sub-ledger.Which of the following management assertions is supported by this test?

The probability that the information circulated by a company will be false or misleading is referred to as

Which of the following types of audit evidence provides the least assurance of reliability?

The accounting,auditing,and investigating agency of the U.S.Congress,headed by the U.S.Comptroller General is known as

In auditing the long term debt account,an auditor's procedures most likely would focus primarily on management's assertion of

An attestation engagement is one in which a CPA is engaged to

The audit objective that all transactions are recorded in the proper account is related most closely to which one of the ASB transaction assertions?

Which of the PCAOB assertions (A-E)are best verified by the following audit procedures (1-4)? A. Existence or occurrence B. Rights and obligations C. Valuation or allocation D. Completeness E. Presentation and disclosure 1. Confirming inventory held on consignment by the client with independent third party. 2. Consulting the Wall Street Journal for year-end prices of securities held by the client. 3. Physically examine all major property and equipment additions. 4. Review the aged trial balance for significant past due accounts.

Auditors are auditing the warehouse of Huge Lots Corporation.The auditors performed the audit procedures listed 1-5.For each audit procedure select the ASB balance assertion that is most likely being tested. A. Existence B. Rights and obligations C. Completeness D. Accuracy E. Valuation 1. The auditors walked through the warehouse looking for obsolete inventory. 2. The auditors compared invoices received from suppliers with the cost of inventory listed in the inventory accounts. 3. The auditors reviewed purchase orders to determine if any inventory was on consignment. 4. The auditors reviewed vendor invoices to determine if freight costs, taxes, tariffs or other costs had been included in inventory costs. 5. The auditors selected items from the inventory and reviewed inventory records to ensure these items were included in those records.

Inquiries of warehouse personnel concerning possible obsolete or slow moving inventory items provide assurance about the PCAOB assertion of

What type of evidence would provide the highest level of assurance in an attestation engagement?

To be proficient as an auditor,a person must first be able to accomplish which of these tasks in a decision-making process?

The audit objective that all transactions are recorded in the proper period is related most closely to which of the Audit Standards Board (ASB)transaction assertions?

The audit objective that all balances include items owned by the client is related most closely to which one of the ASB balance assertions?

When testing the completeness assertion for a liability account,an auditor ordinarily works from the

If an auditor is performing procedures related to the information that is contained in the client's pension footnote,he/she is most likely obtain evidence concerning management's assertion about

Which of the following is not a recommendation usually made following the completion of an operational audit?

Inquiries of warehouse personnel concerning possible obsolete or slow moving inventory items provide assurance about the ASB balance assertion of