Question 1

Decision makers demand reliable information that is provided by accountants.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following best describes the concept of audit risk?

Accepted Answer

A)  The risk of the auditor being sued because of association with an auditee. 
B)  The risk that the auditor will provide a "clean" opinion on financial statements that are, in fact, materially misstated. 
C)  The overall risk that a material misstatement exists in the financial statements. 
D)  The risk that auditors use audit procedures that are inappropriate. 
A)  The risk of the auditor being sued because of association with an auditee. 
B)  The risk that the auditor will provide a "clean" opinion on financial statements that are, in fact, materially misstated. 
C)  The overall risk that a material misstatement exists in the financial statements. 
D)  The risk that auditors use audit procedures that are inappropriate.

Question 3

Sally Thompson's company,Sally's Shoes,is a successful shoe retail business with one store.Sally would like to expand to two locations,but the bank has asked for an independent audit before it will provide financing.Sally hires her brother-in-law,George Thompson,to perform the audit.George has experience in auditing non-profit organizations and he decides to perform the audit the same way as his other audits.After completing all the steps of the audit process,George issues an unqualified opinion indicating that he is certain that the company's financial statements contain no misstatements.Comment on any potential problems with George's audit of Sally's Shoes.

Accepted Answer

Possible solutions:
Independence: Becaus

Question 4

Which of the following best describes the fundamental,underlying reason for why there is demand for an independent auditor to report on financial statements?

Accepted Answer

A)  A management fraud may exist and it is more likely to be detected by auditors if they are independent. 
B)  Different interests may exist between the company preparing the statements and the parties using the statements. 
C)  A misstatement of account balances may exist and it is the independent auditor's responsibility to ensure that financial statements are not misstated. 
D)  A poorly designed internal control system may be in place. 
A)  A management fraud may exist and it is more likely to be detected by auditors if they are independent. 
B)  Different interests may exist between the company preparing the statements and the parties using the statements. 
C)  A misstatement of account balances may exist and it is the independent auditor's responsibility to ensure that financial statements are not misstated. 
D)  A poorly designed internal control system may be in place.

Question 5

Testing all transactions that occurred during the period is cost prohibitive.

Accepted Answer

A) True 
 B)False

Question 6

Name and discuss the seven phases of the audit process.

Accepted Answer

1.Client acceptance/continuance: To mini

Decision makers demand reliable information that is provided by accountants.

Which of the following best describes the concept of audit risk?

Which of the following best describes the fundamental,underlying reason for why there is demand for an independent auditor to report on financial statements?

Testing all transactions that occurred during the period is cost prohibitive.

Name and discuss the seven phases of the audit process.

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Auditing the Inventory Management Process

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professsional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,amd Internal Auditing Services-professional Judgement Module

Filters

Exam 1: An Introduction to Assurance and Financial Statement Auditing

Decision makers demand reliable information that is provided by accountants.

Which of the following best describes the concept of audit risk?

Which of the following best describes the fundamental,underlying reason for why there is demand for an independent auditor to report on financial statements?

Testing all transactions that occurred during the period is cost prohibitive.

Name and discuss the seven phases of the audit process.

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Auditing the Inventory Management Process

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professsional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,amd Internal Auditing Services-professional Judgement Module

Filters