Question 1

Reviewing the latest interim financial statements is one method of identifying subsequent events.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of these substantive procedures is not used to obtain evidence about contingencies?

Accepted Answer

A)  Scanning expense accounts for credit entries. 
B)  Obtaining a letter from the client's attorney. 
C)  Reading the minutes of the board of directors' meetings. 
D)  Examining terms of sale in sales contracts. 
A)  Scanning expense accounts for credit entries. 
B)  Obtaining a letter from the client's attorney. 
C)  Reading the minutes of the board of directors' meetings. 
D)  Examining terms of sale in sales contracts. A

Question 3

The primary objective of analytical procedures used in the final review stage of an audit is to

Accepted Answer

A)  Obtain evidence from details tested to corroborate management assertions. 
B)  Obtain evidence on the validity of the assessment of control risk. 
C)  Assist auditors in evaluating the overall financial statement presentation. 
D)  Identify areas that represent specific risks relevant to the audit. 
A)  Obtain evidence from details tested to corroborate management assertions. 
B)  Obtain evidence on the validity of the assessment of control risk. 
C)  Assist auditors in evaluating the overall financial statement presentation. 
D)  Identify areas that represent specific risks relevant to the audit. C

Question 4

The review of audit documentation by a partner or equivalent within the firm who has not been involved with the audit is referred to as a(n)______________________________ review.

Accepted Answer

The answer of The review of audit documentation by a...

Question 5

To whom should written representations be addressed?

Accepted Answer

A)  Auditors. 
B)  Board of directors. 
C)  Client. 
D)  Stockholders. 
A)  Auditors. 
B)  Board of directors. 
C)  Client. 
D)  Stockholders.

Question 6

Which of the following is not a subject that appears in all written representations without regard to materiality?

Accepted Answer

A)  Disclosure of all related-party transactions. 
B)  Management's responsibility for the fair presentation of the financial statements. 
C)  Availability of all financial records and related data. 
D)  Information concerning management fraud. 
A)  Disclosure of all related-party transactions. 
B)  Management's responsibility for the fair presentation of the financial statements. 
C)  Availability of all financial records and related data. 
D)  Information concerning management fraud.

Question 7

A communication that provides the client with recommendations for improving the effectiveness and efficiency of its operations is known as a(n)_______________________________.

Accepted Answer

The answer of A communication that provides the client with...

Question 8

Assume that T.Rory is auditing the financial statements of Augusta,Inc.Rory completes fieldwork on February 25 and issues the report (along with Augusta's financial statements)on March 1.On March 3,a hurricane destroys a warehouse that contains a significant amount of uninsured inventory.Which of the following best describes Rory's responsibility with respect to the effects of this hurricane on Augusta's financial statements?

Accepted Answer

A)  Because the inventory was included in the financial statements audited by Rory, he is required to perform additional procedures and reissue his report on the revised financial statements. 
B)  Because the hurricane occurred after the date of Rory's report, he has no responsibility to perform additional procedures or reissue his report. 
C)  Because the hurricane occurred prior to the next fiscal quarter, Rory is required to perform additional procedures and reissue his report on the revised financial statements. 
D)  Because the hurricane occurred after the release of the financial statements and Rory's report, he has no responsibility to perform additional procedures or reissue his report. 
A)  Because the inventory was included in the financial statements audited by Rory, he is required to perform additional procedures and reissue his report on the revised financial statements. 
B)  Because the hurricane occurred after the date of Rory's report, he has no responsibility to perform additional procedures or reissue his report. 
C)  Because the hurricane occurred prior to the next fiscal quarter, Rory is required to perform additional procedures and reissue his report on the revised financial statements. 
D)  Because the hurricane occurred after the release of the financial statements and Rory's report, he has no responsibility to perform additional procedures or reissue his report.

Question 9

To obtain evidence regarding litigation,claims,and assessments,auditors request that the client send a letter to its ____________________________.

Accepted Answer

The answer of To obtain evidence regarding litigation,claims,and assessments,auditors request...

Question 10

Which of the following parties provides a review of audit documentation for the primary purpose of ensuring that the quality of the work and reporting is consistent with the quality standards of the accounting firm?

Accepted Answer

A)  Audit manager. 
B)  Audit supervisor. 
C)  Engagement partner. 
D)  Engagement quality partner. 
A)  Audit manager. 
B)  Audit supervisor. 
C)  Engagement partner. 
D)  Engagement quality partner.

Question 11

A situation in which substantial doubt exists about the client's ability to continue in existence is known as __________________________.

Accepted Answer

The answer of A situation in which substantial doubt exists...

Question 12

A(n)__________________________________________ is a proposed adjustment auditors decide not to insist that the client make because it does not have a material effect on the client's financial statements.

Accepted Answer

uncorrecte

Question 13

Assume that Krenzel Company is subject to a class action lawsuit from its customers resulting from the failure of one of its projects.The suit was filed on November 10,2012 and properly disclosed in Krenzel's December 31,2012 financial statements.How would a settlement of this lawsuit on January 17,2013 be properly reflected in Krenzel's financial statements?

Accepted Answer

A)  The financial statements would not reflect the settlement of the lawsuit because it occurred after the date of the financial statements. 
B)  Krenzel would prepare pro forma financial statements to reveal the effects of this settlement. 
C)  Krenzel would adjust its disclosure of the lawsuit to reflect the effects of this settlement. 
D)  Krenzel would provide a separate disclosure to persons known to be relying on its financial statements to describe the effects of this settlement. 
A)  The financial statements would not reflect the settlement of the lawsuit because it occurred after the date of the financial statements. 
B)  Krenzel would prepare pro forma financial statements to reveal the effects of this settlement. 
C)  Krenzel would adjust its disclosure of the lawsuit to reflect the effects of this settlement. 
D)  Krenzel would provide a separate disclosure to persons known to be relying on its financial statements to describe the effects of this settlement.

Question 14

Subsequent events occur between the date of the financial statements and the date of the _______________________________.

Accepted Answer

The answer of Subsequent events occur between the date of...

Question 15

Before the impact of adjusting entries proposed by auditors are included in the client's financial statements,the adjustments must be approved by the

Accepted Answer

A)  Client's management. 
B)  Audit manager. 
C)  Engagement partner. 
D)  Engagement quality review partner. 
A)  Client's management. 
B)  Audit manager. 
C)  Engagement partner. 
D)  Engagement quality review partner.

Question 16

Which of the following best describes auditors' responsibilities with respect to evaluating the going-concern status of the entity?

Accepted Answer

A)  Auditors are required to specifically gather evidence with respect to going-concern status and separately report on the entity's ability to continue as a going concern. 
B)  Auditors are required to specifically gather evidence with respect to going-concern status and modify their report on the financial statements if substantial doubts exist. 
C)  Auditors are required to consider evidence obtained during the audit that may provide information with respect to going-concern status and separately report on the entity's ability to continue as a going concern. 
D)  Auditors are required to consider evidence obtained during the audit that may provide information with respect to going-concern status and modify their report on the financial statements if substantial doubts exist. 
A)  Auditors are required to specifically gather evidence with respect to going-concern status and separately report on the entity's ability to continue as a going concern. 
B)  Auditors are required to specifically gather evidence with respect to going-concern status and modify their report on the financial statements if substantial doubts exist. 
C)  Auditors are required to consider evidence obtained during the audit that may provide information with respect to going-concern status and separately report on the entity's ability to continue as a going concern. 
D)  Auditors are required to consider evidence obtained during the audit that may provide information with respect to going-concern status and modify their report on the financial statements if substantial doubts exist.

Question 17

Match each statement or descriptions with the terms to which it is most likely related.Each term is associated with only one statement.

Accepted Answer

The answer of Match each statement or descriptions with the...

Question 18

Which of the following best describes the role of analytical procedures in the review stages of the audit engagement?

Accepted Answer

A)  To identify possible deficiencies in the client's internal control over financial reporting. 
B)  To identify accounts that appear to be misstated with the intention of planning the nature, timing, and extent of other substantive procedures. 
C)  To gather evidence to support one or more assertion(s) related to the account balance or class of transactions. 
D)  To provide an overall review of the financial information and assessment of the adequacy of evidence gathered during the audit engagement. 
A)  To identify possible deficiencies in the client's internal control over financial reporting. 
B)  To identify accounts that appear to be misstated with the intention of planning the nature, timing, and extent of other substantive procedures. 
C)  To gather evidence to support one or more assertion(s) related to the account balance or class of transactions. 
D)  To provide an overall review of the financial information and assessment of the adequacy of evidence gathered during the audit engagement.

Question 19

Auditors conclude that the omission of a substantive procedure considered necessary at the time of the examination may impair their present ability to support the previously expressed opinion.Auditors need not try to perform the omitted procedure if

Accepted Answer

A)  The risk of adverse publicity or litigation is low. 
B)  Some financial statement users are currently relying on the auditors' reports. 
C)  The auditors' opinion was qualified because of a departure from generally accepted accounting principles. 
D)  The results of other procedures that were applied at the time compensated adequately for the omitted procedure by providing sufficient appropriate evidence. 
A)  The risk of adverse publicity or litigation is low. 
B)  Some financial statement users are currently relying on the auditors' reports. 
C)  The auditors' opinion was qualified because of a departure from generally accepted accounting principles. 
D)  The results of other procedures that were applied at the time compensated adequately for the omitted procedure by providing sufficient appropriate evidence.

Question 20

Auditors have a responsibility related to management's disclosure of new information related to subsequent events until

Accepted Answer

A)  The date of the financial statements. 
B)  The date of the auditors' report. 
C)  The audit report release date. 
D)  The following year's date of the financial statements. 
A)  The date of the financial statements. 
B)  The date of the auditors' report. 
C)  The audit report release date. 
D)  The following year's date of the financial statements.

Reviewing the latest interim financial statements is one method of identifying subsequent events.

Which of these substantive procedures is not used to obtain evidence about contingencies?

The primary objective of analytical procedures used in the final review stage of an audit is to

The review of audit documentation by a partner or equivalent within the firm who has not been involved with the audit is referred to as a(n)______________________________ review.

To whom should written representations be addressed?

Which of the following is not a subject that appears in all written representations without regard to materiality?

A communication that provides the client with recommendations for improving the effectiveness and efficiency of its operations is known as a(n)_______________________________.

To obtain evidence regarding litigation,claims,and assessments,auditors request that the client send a letter to its ____________________________.

Which of the following parties provides a review of audit documentation for the primary purpose of ensuring that the quality of the work and reporting is consistent with the quality standards of the accounting firm?

A situation in which substantial doubt exists about the client's ability to continue in existence is known as __________________________.

A(n)__________________________________________ is a proposed adjustment auditors decide not to insist that the client make because it does not have a material effect on the client's financial statements.

Subsequent events occur between the date of the financial statements and the date of the _______________________________.

Before the impact of adjusting entries proposed by auditors are included in the client's financial statements,the adjustments must be approved by the

Which of the following best describes auditors' responsibilities with respect to evaluating the going-concern status of the entity?

Match each statement or descriptions with the terms to which it is most likely related.Each term is associated with only one statement.

Which of the following best describes the role of analytical procedures in the review stages of the audit engagement?

Auditors conclude that the omission of a substantive procedure considered necessary at the time of the examination may impair their present ability to support the previously expressed opinion.Auditors need not try to perform the omitted procedure if

Auditors have a responsibility related to management's disclosure of new information related to subsequent events until

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

Exam 11: Completing the Audit

Reviewing the latest interim financial statements is one method of identifying subsequent events.

Which of these substantive procedures is not used to obtain evidence about contingencies?

The primary objective of analytical procedures used in the final review stage of an audit is to

The review of audit documentation by a partner or equivalent within the firm who has not been involved with the audit is referred to as a(n)______________________________ review.

To whom should written representations be addressed?

Which of the following is not a subject that appears in all written representations without regard to materiality?

A communication that provides the client with recommendations for improving the effectiveness and efficiency of its operations is known as a(n)_______________________________.

To obtain evidence regarding litigation,claims,and assessments,auditors request that the client send a letter to its ____________________________.

Which of the following parties provides a review of audit documentation for the primary purpose of ensuring that the quality of the work and reporting is consistent with the quality standards of the accounting firm?

A situation in which substantial doubt exists about the client's ability to continue in existence is known as __________________________.

A(n)__________________________________________ is a proposed adjustment auditors decide not to insist that the client make because it does not have a material effect on the client's financial statements.

Subsequent events occur between the date of the financial statements and the date of the _______________________________.

Before the impact of adjusting entries proposed by auditors are included in the client's financial statements,the adjustments must be approved by the

Which of the following best describes auditors' responsibilities with respect to evaluating the going-concern status of the entity?

Match each statement or descriptions with the terms to which it is most likely related.Each term is associated with only one statement.

Which of the following best describes the role of analytical procedures in the review stages of the audit engagement?

Auditors conclude that the omission of a substantive procedure considered necessary at the time of the examination may impair their present ability to support the previously expressed opinion.Auditors need not try to perform the omitted procedure if

Auditors have a responsibility related to management's disclosure of new information related to subsequent events until

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters