Question 1

Management letters are not a means of

Accepted Answer

A) Reporting recommendations to the client. 
B) Assisting the client in improving its operations. 
C) Satisfying professional requirements to communicate matters related to the client's internal control. 
D) Developing rapport with the client. 
A) Reporting recommendations to the client. 
B) Assisting the client in improving its operations. 
C) Satisfying professional requirements to communicate matters related to the client's internal control. 
D) Developing rapport with the client.

Question 2

Following the audit report release date,auditors became aware of facts existing at the report date that would have affected the reports had auditors then been aware of such facts.What is the most appropriate initial course of action that auditors should take?

Accepted Answer

A) Determine whether there are persons relying or likely to rely on the financial statements who would attach importance to the information. 
B) Request that management disclose the newly-discovered information by issuing revised financial statements. 
C) Issue revised pro forma financial statements taking into consideration the newly discovered information. 
D) Give public notice that auditors are no longer associated with financial statements. 
A) Determine whether there are persons relying or likely to rely on the financial statements who would attach importance to the information. 
B) Request that management disclose the newly-discovered information by issuing revised financial statements. 
C) Issue revised pro forma financial statements taking into consideration the newly discovered information. 
D) Give public notice that auditors are no longer associated with financial statements.

Question 3

Roll-forward work normally occurs between the ____ and the ____.

Accepted Answer

A) Beginning of the year under audit; audit report release date. 
B) Date of the financial statements; audit report release date. 
C) Beginning of the year under audit; date of the financial statements. 
D) Date of interim work; date of the auditors' report. 
A) Beginning of the year under audit; audit report release date. 
B) Date of the financial statements; audit report release date. 
C) Beginning of the year under audit; date of the financial statements. 
D) Date of interim work; date of the auditors' report.

Question 4

Which of the following substantive procedures would not ordinarily be used by auditors in evaluating the potential existence of subsequent events?

Accepted Answer

A) Reviewing the latest interim financial statements. 
B) Performing cut-off testing near year end. 
C) Inquiring of officers and other client executives. 
D) Obtaining written representations. 
A) Reviewing the latest interim financial statements. 
B) Performing cut-off testing near year end. 
C) Inquiring of officers and other client executives. 
D) Obtaining written representations.

Question 5

Indicate the type of communication(s)that correspond to each of the following statements.Use the letters A (attorney letter),M (management letter),and WR (written representations).Each statement may be related to more than one type of communication.
1____.Discusses management's responsibility for the fairness of the financial statements.
2____.Is obtained on the date of the auditors' report.
3____.Provides auditors with significant evidence regarding litigation,claims,and assessments.
4____.Discusses the absence of fraud activity by the client and its personnel.
5____.Is not required by generally accepted auditing standards.
6____.Is intended to be returned to auditors as a form of evidence.
7____.Is typically prepared following the audit report release date.
8____.Is signed by an executive of the client.

Accepted Answer

1.WR; 2.WR

Question 6

Auditors must complete various phases of an audit after the date of the financial statements.The auditors' responsibility for matters affecting the client extends from the date of the financial statements to the

Accepted Answer

A) Date of the auditors' report. 
B) Final review of the audit documentation. 
C) Audit report release date. 
D) Delivery of the auditors' reports to the client. 
A) Date of the auditors' report. 
B) Final review of the audit documentation. 
C) Audit report release date. 
D) Delivery of the auditors' reports to the client.

Question 7

Which of the following reporting options is available if the client refuses to provide auditors with written representations?

Accepted Answer

A) Unmodified or qualified opinion. 
B) Qualified or adverse opinion. 
C) Qualified opinion or disclaimer of opinion. 
D) Disclaimer of opinion or adverse opinion. 
A) Unmodified or qualified opinion. 
B) Qualified or adverse opinion. 
C) Qualified opinion or disclaimer of opinion. 
D) Disclaimer of opinion or adverse opinion.

Question 8

Which of the following auditing procedures most likely would assist auditors in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern?

Accepted Answer

A) Inspecting title documents to verify whether any assets are pledged as collateral. 
B) Confirming with third parties the details of arrangements to maintain financial support. 
C) Reconciling the client's cash balance with the cut-off bank statement and the bank confirmation. 
D) Comparing the entity's depreciation and asset capitalization policies to other entities in the industry. 
A) Inspecting title documents to verify whether any assets are pledged as collateral. 
B) Confirming with third parties the details of arrangements to maintain financial support. 
C) Reconciling the client's cash balance with the cut-off bank statement and the bank confirmation. 
D) Comparing the entity's depreciation and asset capitalization policies to other entities in the industry.

Question 9

If auditors are appointed on January 3,2017,the date of the financial statements is December 31,2017,the date of the auditors' report is February 7,2018 and the audit report release date is March 3,2018,what is the appropriate date of the written representations?

Accepted Answer

A) January 3,2017. 
B) December 31,2017. 
C) February 7,2018. 
D) March 3,2018. 
A) January 3,2017. 
B) December 31,2017. 
C) February 7,2018. 
D) March 3,2018.

Question 10

In an audit of contingent liabilities,which of the following procedures would be least effective?

Accepted Answer

A) Examining customer confirmation replies. 
B) Reviewing a bank confirmation letter. 
C) Examining invoices for professional services. 
D) Reading the minutes of the board of directors meetings. 
A) Examining customer confirmation replies. 
B) Reviewing a bank confirmation letter. 
C) Examining invoices for professional services. 
D) Reading the minutes of the board of directors meetings.

Question 11

For which of the following objectives would auditors be least likely to use analytical procedures near the end of the audit?

Accepted Answer

A) Obtaining evidence about assertions related to account balances or classes of transactions. 
B) Evaluating the adequacy of evidence gathered in response to unexpected account balances. 
C) Identifying unusual or unexpected account balances or relationships among account balances that were not previously identified during the audit. 
D) Evaluating the adequacy of evidence gathered in response to unexpected relationships among account balances. 
A) Obtaining evidence about assertions related to account balances or classes of transactions. 
B) Evaluating the adequacy of evidence gathered in response to unexpected account balances. 
C) Identifying unusual or unexpected account balances or relationships among account balances that were not previously identified during the audit. 
D) Evaluating the adequacy of evidence gathered in response to unexpected relationships among account balances.

Question 12

Interim testing normally occurs between the ____ and the ____.

Accepted Answer

A) Beginning of the year under audit; audit report release date. 
B) Date of the financial statements; audit report release date. 
C) Beginning of the year under audit; date of the financial statements. 
D) End of the year under audit; date of the auditors' report. 
A) Beginning of the year under audit; audit report release date. 
B) Date of the financial statements; audit report release date. 
C) Beginning of the year under audit; date of the financial statements. 
D) End of the year under audit; date of the auditors' report.

Question 13

What is the primary purpose of obtaining written representations?

Accepted Answer

A) To provide auditors with substantive evidence of important assertions. 
B) To impress upon management its primary responsibility for the financial statements. 
C) To allow auditors to communicate important internal control deficiencies to management. 
D) To allow auditors to communicate important suggestions for improvement to management. 
A) To provide auditors with substantive evidence of important assertions. 
B) To impress upon management its primary responsibility for the financial statements. 
C) To allow auditors to communicate important internal control deficiencies to management. 
D) To allow auditors to communicate important suggestions for improvement to management.

Question 14

Which of the following subsequent events would represent an event that provides information about conditions that arose following the date of the financial statements?

Accepted Answer

A) Settlement of long outstanding litigation. 
B) Collection of a past due accounts receivable. 
C) Loss of inventory as a result of a flood. 
D) An additional tax assessment on prior income. 
A) Settlement of long outstanding litigation. 
B) Collection of a past due accounts receivable. 
C) Loss of inventory as a result of a flood. 
D) An additional tax assessment on prior income.

Question 15

A partner of the accounting firm who has not been involved in the audit performs an engagement quality review of documentation.This review usually focuses on

Accepted Answer

A) The fair presentation of the financial statements in conformity with GAAP. 
B) Irregularities involving the client's management and its employees. 
C) The materiality of the adjusting entries proposed by the audit staff. 
D) The communication of internal control deficiencies to the client's audit committee (or those charged with governance). 
A) The fair presentation of the financial statements in conformity with GAAP. 
B) Irregularities involving the client's management and its employees. 
C) The materiality of the adjusting entries proposed by the audit staff. 
D) The communication of internal control deficiencies to the client's audit committee (or those charged with governance).

Question 16

Which party should request a letter regarding litigation,claims,and assessments from the client's attorney?

Accepted Answer

A) Attorney. 
B) Auditors. 
C) Client. 
D) Securities and Exchange Commission or other regulatory body. 
A) Attorney. 
B) Auditors. 
C) Client. 
D) Securities and Exchange Commission or other regulatory body.

Question 17

An engagement quality review by a second partner of the audit documentation and financial statements is performed to ensure that the:

Accepted Answer

A) "To-do lists" are reviewed and cleared. 
B) Audit plan procedures are "signed off." 
C) Tick-mark notations are cleared. 
D) Audit work meets the quality standards of the firm. 
A) "To-do lists" are reviewed and cleared. 
B) Audit plan procedures are "signed off." 
C) Tick-mark notations are cleared. 
D) Audit work meets the quality standards of the firm.

Question 18

If the date of an entity's financial statements is December 31,the date of the auditor's report is February 20,and the audit report release date is February 22,which of the following is considered a subsequent event?

Accepted Answer

A) A significant acquisition that was announced on February 1 and will be finalized on October 1. 
B) A court settlement on March 3 related to a case that was pending on December 31. 
C) Losses from the devaluation of a foreign currency that became finalized on February 21. 
D) The entity's announcement of a major restructuring plan on December 30 that will be implemented during the upcoming year. 
A) A significant acquisition that was announced on February 1 and will be finalized on October 1. 
B) A court settlement on March 3 related to a case that was pending on December 31. 
C) Losses from the devaluation of a foreign currency that became finalized on February 21. 
D) The entity's announcement of a major restructuring plan on December 30 that will be implemented during the upcoming year.

Question 19

Which of the following procedures would auditors most likely perform to obtain evidence about the occurrence of subsequent events?

Accepted Answer

A) Confirming a sample of material accounts receivable established after year-end. 
B) Comparing the financial statements being reported on with those of the prior period. 
C) Reading minutes of meetings of owners,management,or those charged with governance held after the date of the financial statements. 
D) Inquiring as to whether any unusual adjustments were made just before year-end. 
A) Confirming a sample of material accounts receivable established after year-end. 
B) Comparing the financial statements being reported on with those of the prior period. 
C) Reading minutes of meetings of owners,management,or those charged with governance held after the date of the financial statements. 
D) Inquiring as to whether any unusual adjustments were made just before year-end.

Management letters are not a means of

Following the audit report release date,auditors became aware of facts existing at the report date that would have affected the reports had auditors then been aware of such facts.What is the most appropriate initial course of action that auditors should take?

Roll-forward work normally occurs between the and the .

Which of the following substantive procedures would not ordinarily be used by auditors in evaluating the potential existence of subsequent events?

Auditors must complete various phases of an audit after the date of the financial statements.The auditors' responsibility for matters affecting the client extends from the date of the financial statements to the

Which of the following reporting options is available if the client refuses to provide auditors with written representations?

Which of the following auditing procedures most likely would assist auditors in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern?

If auditors are appointed on January 3,2017,the date of the financial statements is December 31,2017,the date of the auditors' report is February 7,2018 and the audit report release date is March 3,2018,what is the appropriate date of the written representations?

In an audit of contingent liabilities,which of the following procedures would be least effective?

For which of the following objectives would auditors be least likely to use analytical procedures near the end of the audit?

Interim testing normally occurs between the and the .

What is the primary purpose of obtaining written representations?

Which of the following subsequent events would represent an event that provides information about conditions that arose following the date of the financial statements?

A partner of the accounting firm who has not been involved in the audit performs an engagement quality review of documentation.This review usually focuses on

Which party should request a letter regarding litigation,claims,and assessments from the client's attorney?

An engagement quality review by a second partner of the audit documentation and financial statements is performed to ensure that the:

If the date of an entity's financial statements is December 31,the date of the auditor's report is February 20,and the audit report release date is February 22,which of the following is considered a subsequent event?

Which of the following procedures would auditors most likely perform to obtain evidence about the occurrence of subsequent events?

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 Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 11: Completing the Audit

Management letters are not a means of

Following the audit report release date,auditors became aware of facts existing at the report date that would have affected the reports had auditors then been aware of such facts.What is the most appropriate initial course of action that auditors should take?

Roll-forward work normally occurs between the ____ and the ____.

Which of the following substantive procedures would not ordinarily be used by auditors in evaluating the potential existence of subsequent events?

Auditors must complete various phases of an audit after the date of the financial statements.The auditors' responsibility for matters affecting the client extends from the date of the financial statements to the

Which of the following reporting options is available if the client refuses to provide auditors with written representations?

Which of the following auditing procedures most likely would assist auditors in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern?

If auditors are appointed on January 3,2017,the date of the financial statements is December 31,2017,the date of the auditors' report is February 7,2018 and the audit report release date is March 3,2018,what is the appropriate date of the written representations?

In an audit of contingent liabilities,which of the following procedures would be least effective?

For which of the following objectives would auditors be least likely to use analytical procedures near the end of the audit?

Interim testing normally occurs between the ____ and the ____.

What is the primary purpose of obtaining written representations?

Which of the following subsequent events would represent an event that provides information about conditions that arose following the date of the financial statements?

A partner of the accounting firm who has not been involved in the audit performs an engagement quality review of documentation.This review usually focuses on

Which party should request a letter regarding litigation,claims,and assessments from the client's attorney?

An engagement quality review by a second partner of the audit documentation and financial statements is performed to ensure that the:

If the date of an entity's financial statements is December 31,the date of the auditor's report is February 20,and the audit report release date is February 22,which of the following is considered a subsequent event?

Which of the following procedures would auditors most likely perform to obtain evidence about the occurrence of subsequent events?

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 Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Roll-forward work normally occurs between the and the .

Interim testing normally occurs between the and the .