Exam 6: Audit Responsibilities and Objectives

Other than inquiring of management about policies they have established to prevent illegal acts and whether management knows of any laws or regulations that the company has violated,the auditor should not search for illegal acts that do not have a direct effect on the financial statements unless there is reason to believe they may exist.

Which of the following would most likely be deemed a direct-effect illegal act?

Which of the following management assertions is not associated with classes of transactions and events?

When an auditor knows that an illegal act has occurred,she must:

A questioning mindset:

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

In describing the cycle approach to segmenting an audit,which of the following statements is not true?

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

Tests of details of balances are specific audit procedures that are intended to:

If management insists on financial statement disclosures that the auditor finds unacceptable,the auditor can withdraw from the engagement or:

Discuss the differences between errors,frauds,and illegal acts.Give an example of each.

The objective of an audit of the financial statements is an expression of an opinion on:

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

If a short-term note payable is included in the accounts payable balance on the financial statement,there is a violation of the:

When dealing with laws and regulations that do not have a direct effect on the financial statements,the auditor:

An auditor discovers that the company's bookkeeper unintentionally made an mistake in calculating the amount of the quarterly sales.This is an example of:

When using the cycle approach to segmenting the audit,the reason for treating capital acquisition and repayment separately from the acquisition of goods and services is that:

Which of the following statements best describes the auditor's responsibility with respect to illegal acts that do not have a material effect on the client's financial statements?

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

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.