Question 1

If auditors work together on areas of a report, they must disclose this in the report.

Accepted Answer

A) True 
 B)False  False

Question 2

The relationship of risks for a specific client may change:

Accepted Answer

A)  Daily. 
B)  Monthly. 
C)  From year to year. 
D)  From audit to audit. 
A)  Daily. 
B)  Monthly. 
C)  From year to year. 
D)  From audit to audit. D

Question 3

What is an estimation of misstatement and comparison to tolerable misstatement?

Accepted Answer

Tolerable misstatement is used to determine whether a segment is materially misstated by comparing the tolerable misstatement to the results of testing. The amount of misstatement in a segment is estimated by use of sampling procedures (see section on sampling below) and compared to the tolerable misstatement. If the amount of the estimated misstatement exceeds the tolerable misstatement amount, the auditor concludes that the segment is materially misstated.

Question 4

If a company has changed accounting principles, the auditor will issue what type of statement?

Accepted Answer

A)  Lack of accounting standards. 
B)  Change in costing principles. 
C)  Lack of consistency. 
D)  Misstatement of accounting principles. 
A)  Lack of accounting standards. 
B)  Change in costing principles. 
C)  Lack of consistency. 
D)  Misstatement of accounting principles.

Question 5

Which of the following is not a type of test that an auditor might perform?

Accepted Answer

A)  Tests of Controls. 
B)  Tests of Principles. 
C)  Substantive tests of transactions. 
D)  Substantive tests of balances. 
A)  Tests of Controls. 
B)  Tests of Principles. 
C)  Substantive tests of transactions. 
D)  Substantive tests of balances.

Question 6

Which of the following is another auditing function?

Accepted Answer

A)  Internal Auditing. 
B)  Operational Auditing. 
C)  Governmental Auditing. 
D)  All of the above. 
A)  Internal Auditing. 
B)  Operational Auditing. 
C)  Governmental Auditing. 
D)  All of the above.

Question 7

Why is risk in financial misstatements too important not to recognize?

Accepted Answer

A)  Because the employees need good information to ask for appropriate raises from. 
B)  So suppliers will know how much to charge for future deliveries. 
C)  Due to SEC regulations. 
D)  Users of the financial statements will be harmed if they are not correct. 
A)  Because the employees need good information to ask for appropriate raises from. 
B)  So suppliers will know how much to charge for future deliveries. 
C)  Due to SEC regulations. 
D)  Users of the financial statements will be harmed if they are not correct.

Question 8

What two conditions must be met in order to issue a qualified statement?

Accepted Answer

A qualified opinion is issued when one o

Question 9

Investors in a company often want assurance that the financial statements are true and accurate. They can achieve this assurance by using:

Accepted Answer

A)  Auditors. 
B)  Internal controls. 
C)  Forensic accountants. 
D)  Ratio analysis. 
A)  Auditors. 
B)  Internal controls. 
C)  Forensic accountants. 
D)  Ratio analysis.

Question 10

What are tests of controls used for?

Accepted Answer

Tests of controls are used to determine

Question 11

In 2003, what board replaced the AICPA as the auditing standard-setter for companies that are publicly held?

Accepted Answer

A)  SOX. 
B)  SEC. 
C)  FASB. 
D)  PCAOB. 
A)  SOX. 
B)  SEC. 
C)  FASB. 
D)  PCAOB.

Question 12

After individuals become licensed in accounting, such as earning their CPA status, they typically must do what?

Accepted Answer

A)  Work for an auditing firm for 120 hours. 
B)  Continue their education by acquiring CPE's. 
C)  Become an Enrolled Agent with the IRS. 
D)  Open a public practice in accounting. 
A)  Work for an auditing firm for 120 hours. 
B)  Continue their education by acquiring CPE's. 
C)  Become an Enrolled Agent with the IRS. 
D)  Open a public practice in accounting.

Question 13

Compare and contrast sampling for risk and sampling for attributes.

Accepted Answer

When less than an entire population is e

Question 14

The Institute of Internal Auditors (IIA) publishes what?

Accepted Answer

A)  FASB Statements. 
B)  GAAP. 
C)  SIAS. 
D)  SAIS. 
A)  FASB Statements. 
B)  GAAP. 
C)  SIAS. 
D)  SAIS.

Question 15

What is the model for the relationship of the four components of risk?

Accepted Answer

A)  ADR = IR/(AAR x CR). 
B)  ADR = AAR/(IR x CR). 
C)  AAR = ADR x IR / CR. 
D)  IR = AAR/ADR x CR. 
A)  ADR = IR/(AAR x CR). 
B)  ADR = AAR/(IR x CR). 
C)  AAR = ADR x IR / CR. 
D)  IR = AAR/ADR x CR.

Question 16

Which of the following is a phase of an audit?

Accepted Answer

A)  The engagement letter. 
B)  Meeting with the audit committee. 
C)  Industry comparisons. 
D)  Completion of the audit and issuance of the audit report. 
A)  The engagement letter. 
B)  Meeting with the audit committee. 
C)  Industry comparisons. 
D)  Completion of the audit and issuance of the audit report.

Question 17

Which of the following is not a component of risk?

Accepted Answer

A)  Acceptable Detection Risk. 
B)  Audit Risk. 
C)  Inherent Risk. 
D)  Control Risk. 
A)  Acceptable Detection Risk. 
B)  Audit Risk. 
C)  Inherent Risk. 
D)  Control Risk.

Question 18

Auditors may be employed to audit:

Accepted Answer

A)  Part of a financial statement. 
B)  Part of a balance sheet. 
C)  The internal controls of a company. 
D)  All of the above. 
A)  Part of a financial statement. 
B)  Part of a balance sheet. 
C)  The internal controls of a company. 
D)  All of the above.

Question 19

What does the model ADR = AAR/(IR x CR) represent?

Accepted Answer

This model is conceptual and is used by

Question 20

Which of the following is not a report that OMB Circular A-133 requires?

Accepted Answer

A)  A report that includes an opinion on whether the financial statements are presented in accordance with GAAP. 
B)  A report that includes an opinion on whether the schedule of Federal awards is presented fairly and is consistent with the financial statements. 
C)  A report on the entity's internal controls over financial reporting and its major programs. 
D)  A report that other auditor's findings of errors/misrepresentations have been addressed and corrected. 
A)  A report that includes an opinion on whether the financial statements are presented in accordance with GAAP. 
B)  A report that includes an opinion on whether the schedule of Federal awards is presented fairly and is consistent with the financial statements. 
C)  A report on the entity's internal controls over financial reporting and its major programs. 
D)  A report that other auditor's findings of errors/misrepresentations have been addressed and corrected.

If auditors work together on areas of a report, they must disclose this in the report.

The relationship of risks for a specific client may change:

What is an estimation of misstatement and comparison to tolerable misstatement?

If a company has changed accounting principles, the auditor will issue what type of statement?

Which of the following is not a type of test that an auditor might perform?

Which of the following is another auditing function?

Why is risk in financial misstatements too important not to recognize?

What two conditions must be met in order to issue a qualified statement?

Investors in a company often want assurance that the financial statements are true and accurate. They can achieve this assurance by using:

What are tests of controls used for?

In 2003, what board replaced the AICPA as the auditing standard-setter for companies that are publicly held?

After individuals become licensed in accounting, such as earning their CPA status, they typically must do what?

Compare and contrast sampling for risk and sampling for attributes.

The Institute of Internal Auditors (IIA) publishes what?

What is the model for the relationship of the four components of risk?

Which of the following is a phase of an audit?

Which of the following is not a component of risk?

Auditors may be employed to audit:

What does the model ADR = AAR/(IR x CR) represent?

Which of the following is not a report that OMB Circular A-133 requires?

Introduction to Forensic Accounting and Fraud Examination

The Forensic Accounting Legal Environment

Fundamentals I: Accounting Information Systems

Fraud Prevention and Risk Management

Fraud Detection

The Fraud Investigation and Engagement Processes

The Evidence Collection Process

Fraud Examination Evidence I: Physical, Documentary, and Observational Evidence

Fraud Examination Evidence II: Interview and Interrogation Methods

Fraud Examination Evidence III: Forensic Science and Computer Forensics

The Fraud Report, Litigation, and the Recovery Process

Employee, Vendor, and Other Frauds Against the Organization

Financial Statement Fraud

Fraud and Sox Compliance

Tax Fraud

Bankruptcy, Divorce, Identity Theft

Organized Crime, Counterterrorism, and Anti-Money Laundering

Business Valuation

Dispute Resolution Services

Filters

Exam 4: Fundamentals II: The Auditing Environment

If auditors work together on areas of a report, they must disclose this in the report.

The relationship of risks for a specific client may change:

What is an estimation of misstatement and comparison to tolerable misstatement?

If a company has changed accounting principles, the auditor will issue what type of statement?

Which of the following is not a type of test that an auditor might perform?

Which of the following is another auditing function?

Why is risk in financial misstatements too important not to recognize?

What two conditions must be met in order to issue a qualified statement?

Investors in a company often want assurance that the financial statements are true and accurate. They can achieve this assurance by using:

What are tests of controls used for?

In 2003, what board replaced the AICPA as the auditing standard-setter for companies that are publicly held?

After individuals become licensed in accounting, such as earning their CPA status, they typically must do what?

Compare and contrast sampling for risk and sampling for attributes.

The Institute of Internal Auditors (IIA) publishes what?

What is the model for the relationship of the four components of risk?

Which of the following is a phase of an audit?

Which of the following is not a component of risk?

Auditors may be employed to audit:

What does the model ADR = AAR/(IR x CR) represent?

Which of the following is not a report that OMB Circular A-133 requires?

Introduction to Forensic Accounting and Fraud Examination

The Forensic Accounting Legal Environment

Fundamentals I: Accounting Information Systems

Fraud Prevention and Risk Management

Fraud Detection

The Fraud Investigation and Engagement Processes

The Evidence Collection Process

Fraud Examination Evidence I: Physical, Documentary, and Observational Evidence

Fraud Examination Evidence II: Interview and Interrogation Methods

Fraud Examination Evidence III: Forensic Science and Computer Forensics

The Fraud Report, Litigation, and the Recovery Process

Employee, Vendor, and Other Frauds Against the Organization

Financial Statement Fraud

Fraud and Sox Compliance

Tax Fraud

Bankruptcy, Divorce, Identity Theft

Organized Crime, Counterterrorism, and Anti-Money Laundering

Business Valuation

Dispute Resolution Services

Filters