Question 1

When an auditor relies on the work of another auditor, the auditor issuing the audit report may:

Accepted Answer

A)  state this fact in the audit report. 
B)  disclaim responsibility for this audit work. 
C)  issue a qualified opinion with an explanatory paragraph. 
D)  issue a qualified opinion, except for the work of the other auditor. 
A)  state this fact in the audit report. 
B)  disclaim responsibility for this audit work. 
C)  issue a qualified opinion with an explanatory paragraph. 
D)  issue a qualified opinion, except for the work of the other auditor.

Question 2

If a predecessor auditor re-issues an audit report, the date of the predecessor auditor's report should be:

Accepted Answer

A)  the end of field work for the current year. 
B)  the date the predecessor auditor was removed as auditor. 
C)  the original report date. 
D)  the same date as that of the successor auditor's report. 
A)  the end of field work for the current year. 
B)  the date the predecessor auditor was removed as auditor. 
C)  the original report date. 
D)  the same date as that of the successor auditor's report.

Question 3

Company A hired Q to perform its year-end audit. Subsequent to year-end, A discovers that one of its customers, who owes Company A a material amount, has filed for bankruptcy protection. Assume that the financial statements and audit report have already been issued. Q should:

Accepted Answer

A)  recall the financial statements. 
B)  inform regulators that the audit report can no longer be relied upon. 
C)  inform the client that the regulators should be notified that the audit report can no longer be relied upon. 
D)  reissue a revised audit report. 
A)  recall the financial statements. 
B)  inform regulators that the audit report can no longer be relied upon. 
C)  inform the client that the regulators should be notified that the audit report can no longer be relied upon. 
D)  reissue a revised audit report.

Question 4

Who is responsible for the contents and filing of the 10K?

Accepted Answer

A)  The auditors. 
B)  Management. 
C)  The audit committee. 
D)  All of the above. 
A)  The auditors. 
B)  Management. 
C)  The audit committee. 
D)  All of the above.

Question 5

Assume you are a senior who has been assigned to the audit of Overkill Motor Yachts, when the senior previously assigned to the engagement left the firm for another position. Most of the audit planning has been completed, but the audit plan for the wrap-up phase is not finished. Draft the audit plan for the wrap up, including all audit procedures and steps for the wrap up stage of the integrated audit of Overkill Motor Yachts.

Accepted Answer

Wrap-up audit procedures include the fol

Question 6

If a client changes auditors, the new auditors may have to reissue the audit report for the previous year.

Accepted Answer

A) True 
 B)False

Question 7

The auditors should communicate any material concerns regarding internal control:

Accepted Answer

A)  to the audit committee. 
B)  to the shareholders via the audit report of the ICFR. 
C)  to the SEC directly. 
D)  Both "a" and "b". 
A)  to the audit committee. 
B)  to the shareholders via the audit report of the ICFR. 
C)  to the SEC directly. 
D)  Both "a" and "b".

Question 8

If a subsequent event that has a material effect on ICFR is discovered after the financial report date, but existed at year-end, the duty of the auditor is to:

Accepted Answer

A)  disclose the event in the audit report and issue a qualified opinion. 
B)  disclose the event in the audit report and issue an adverse opinion on the ICFR. 
C)  disclose the event in the audit report and add an explanatory paragraph. 
D)  depending on the circumstances, the auditor may choose any of the above. 
A)  disclose the event in the audit report and issue a qualified opinion. 
B)  disclose the event in the audit report and issue an adverse opinion on the ICFR. 
C)  disclose the event in the audit report and add an explanatory paragraph. 
D)  depending on the circumstances, the auditor may choose any of the above.

Question 9

Who is responsible for compliance with SOX section 404:

Accepted Answer

A)  management. 
B)  the auditors. 
C)  both management and the auditors. 
D)  It depends on the specifics. 
A)  management. 
B)  the auditors. 
C)  both management and the auditors. 
D)  It depends on the specifics.

Question 10

Inquiry of a client's lawyer:

Accepted Answer

A)  is required by GAAS. 
B)  requests that the lawyer identify the nature and reason for any limitation on her response. 
C)  requires disclosure of any omission made by management in identifying existing and pending litigation. 
D)  All of the above. 
A)  is required by GAAS. 
B)  requests that the lawyer identify the nature and reason for any limitation on her response. 
C)  requires disclosure of any omission made by management in identifying existing and pending litigation. 
D)  All of the above.

Question 11

A client decides to change accounting procedures for certain types of transactions which have a material impact on the financial statements. The client changes from the LIFO method of inventory valuation to the FIFO method without justification. The auditor should issue what type of opinion?

Accepted Answer

A)  Adverse opinion. 
B)  Disclaimer of opinion. 
C)  Qualified opinion. 
D)  Depending on the circumstances, the auditor may choose either "a" or "c" above. 
A)  Adverse opinion. 
B)  Disclaimer of opinion. 
C)  Qualified opinion. 
D)  Depending on the circumstances, the auditor may choose either "a" or "c" above.

Question 12

Type I subsequent events are always referenced in the audit report.

Accepted Answer

A) True 
 B)False

Question 13

If an auditor has serious going concern issues regarding the client, but the financial statements are correctly stated, then the auditor should:

Accepted Answer

A)  issue an adverse opinion. 
B)  issue a disclaimer of opinion. 
C)  issue an unqualified opinion with appropriate explanatory language. 
D)  perform analytical procedures of the adjusted financial statements. 
A)  issue an adverse opinion. 
B)  issue a disclaimer of opinion. 
C)  issue an unqualified opinion with appropriate explanatory language. 
D)  perform analytical procedures of the adjusted financial statements.

Question 14

Per GAAS, a standard audit report consists of at least:

Accepted Answer

A)  opinion, scope, and explanatory paragraphs in that order. 
B)  introductory, explanatory, and scope paragraphs in that order. 
C)  introductory, scope, and opinion paragraphs in that order. 
D)  None of the above. 
A)  opinion, scope, and explanatory paragraphs in that order. 
B)  introductory, explanatory, and scope paragraphs in that order. 
C)  introductory, scope, and opinion paragraphs in that order. 
D)  None of the above.

Question 15

Cohen and Single, LLP, are auditing the ICFR and financial statements of Copley and Sons, a public company that sells supplies to government agencies. Copley and Sons has a 12/31 fiscal year end. Cohen and Single conclude that the financial statements for the current and prior year are fairly stated. However, they found a material weakness in ICFR. There is a lack of separation of duties because the company's CFO has the ability to change passwords on employee's computer identification numbers and has unlimited access to a computer terminal through which any journal entry can be entered without approval and review. Management's evaluation of ICFR is also as of 12/31, and management's report states that ICFR is not effective due to the computer security problem causing the lack of separation of duties. Draft Cohen and Single's combined audit report with opinions on the financial statements and ICFR as described.

Accepted Answer

To the Board of Directors and Shareholde

Question 16

An adverse opinion is issued when the auditor cannot perform appropriate audit procedures because of a scope limitation.

Accepted Answer

A) True 
 B)False

Question 17

An audit report on a client's ICFR differs from the audit report for a financial statement by:

Accepted Answer

A)  being separate from the audit report for the financial statements. 
B)  including an explanatory paragraph. 
C)  including a definition paragraph. 
D)  All of the above. 
A)  being separate from the audit report for the financial statements. 
B)  including an explanatory paragraph. 
C)  including a definition paragraph. 
D)  All of the above.

Question 18

Unasserted claims are:

Accepted Answer

A)  potential claims. 
B)  existing claims. 
C)  pending claims. 
D)  None of the above. 
A)  potential claims. 
B)  existing claims. 
C)  pending claims. 
D)  None of the above.

Question 19

A material type II subsequent event:

Accepted Answer

A)  requires disclosure in the notes to the financial statements. 
B)  requires recognition in the body of the financial statements. 
C)  Either "a" or "b" depending on the circumstances. 
D)  None of the above. 
A)  requires disclosure in the notes to the financial statements. 
B)  requires recognition in the body of the financial statements. 
C)  Either "a" or "b" depending on the circumstances. 
D)  None of the above.

Question 20

Failure to provide the auditor information regarding pending litigation is grounds for a scope limitation.

Accepted Answer

A) True 
 B)False

When an auditor relies on the work of another auditor, the auditor issuing the audit report may:

If a predecessor auditor re-issues an audit report, the date of the predecessor auditor's report should be:

Company A hired Q to perform its year-end audit. Subsequent to year-end, A discovers that one of its customers, who owes Company A a material amount, has filed for bankruptcy protection. Assume that the financial statements and audit report have already been issued. Q should:

Who is responsible for the contents and filing of the 10K?

If a client changes auditors, the new auditors may have to reissue the audit report for the previous year.

The auditors should communicate any material concerns regarding internal control:

If a subsequent event that has a material effect on ICFR is discovered after the financial report date, but existed at year-end, the duty of the auditor is to:

Who is responsible for compliance with SOX section 404:

Inquiry of a client's lawyer:

A client decides to change accounting procedures for certain types of transactions which have a material impact on the financial statements. The client changes from the LIFO method of inventory valuation to the FIFO method without justification. The auditor should issue what type of opinion?

Type I subsequent events are always referenced in the audit report.

If an auditor has serious going concern issues regarding the client, but the financial statements are correctly stated, then the auditor should:

Per GAAS, a standard audit report consists of at least:

An adverse opinion is issued when the auditor cannot perform appropriate audit procedures because of a scope limitation.

An audit report on a client's ICFR differs from the audit report for a financial statement by:

Unasserted claims are:

A material type II subsequent event:

Failure to provide the auditor information regarding pending litigation is grounds for a scope limitation.

An Introduction to Auditing

Overview of an Integrated Audit

The Auditors Role in Society

Legal Environment Affecting Audits Pt Iii Executing an Integrated Audit

Client Acceptance and Continuance and Preliminary Engagement Procedures

Audit Planning and Risk Assessment

Internal Control, Understanding the Clients Internal Control Over Financial Reporting and Auditing Design Effectiveness

Planning and Testing Operating Effectiveness of Internal Control Over Financial Reporting

Substantive Procedures and the Financial Statement Audit

Auditing Revenue Process: Sales, Billing and Collection in the Health-Care Provider and Retailing Industries

The Acquisition and Payments Cycle and Related Accounts: Purchases, Cash Disbursements and Other Related Activities in the Automotive Industry

Auditing Human Resources Cycle Process: Personnel and Payroll in Service Industries

Auditing Inventory Processes: Tracking and Costing Products in the Land Development and Home Building Industry

Assets, Liabilities and Equity Related to the Financing Cycle

Topics Beyond the Integrated Audit

Filters

Exam 11: Completing the Integrated Audit and Reporting

When an auditor relies on the work of another auditor, the auditor issuing the audit report may:

If a predecessor auditor re-issues an audit report, the date of the predecessor auditor's report should be:

Company A hired Q to perform its year-end audit. Subsequent to year-end, A discovers that one of its customers, who owes Company A a material amount, has filed for bankruptcy protection. Assume that the financial statements and audit report have already been issued. Q should:

Who is responsible for the contents and filing of the 10K?

If a client changes auditors, the new auditors may have to reissue the audit report for the previous year.

The auditors should communicate any material concerns regarding internal control:

If a subsequent event that has a material effect on ICFR is discovered after the financial report date, but existed at year-end, the duty of the auditor is to:

Who is responsible for compliance with SOX section 404:

Inquiry of a client's lawyer:

A client decides to change accounting procedures for certain types of transactions which have a material impact on the financial statements. The client changes from the LIFO method of inventory valuation to the FIFO method without justification. The auditor should issue what type of opinion?

Type I subsequent events are always referenced in the audit report.

If an auditor has serious going concern issues regarding the client, but the financial statements are correctly stated, then the auditor should:

Per GAAS, a standard audit report consists of at least:

An adverse opinion is issued when the auditor cannot perform appropriate audit procedures because of a scope limitation.

An audit report on a client's ICFR differs from the audit report for a financial statement by:

Unasserted claims are:

A material type II subsequent event:

Failure to provide the auditor information regarding pending litigation is grounds for a scope limitation.

An Introduction to Auditing

Overview of an Integrated Audit

The Auditors Role in Society

Legal Environment Affecting Audits Pt Iii Executing an Integrated Audit

Client Acceptance and Continuance and Preliminary Engagement Procedures

Audit Planning and Risk Assessment

Internal Control, Understanding the Clients Internal Control Over Financial Reporting and Auditing Design Effectiveness

Planning and Testing Operating Effectiveness of Internal Control Over Financial Reporting

Substantive Procedures and the Financial Statement Audit

Auditing Revenue Process: Sales, Billing and Collection in the Health-Care Provider and Retailing Industries

The Acquisition and Payments Cycle and Related Accounts: Purchases, Cash Disbursements and Other Related Activities in the Automotive Industry

Auditing Human Resources Cycle Process: Personnel and Payroll in Service Industries

Auditing Inventory Processes: Tracking and Costing Products in the Land Development and Home Building Industry

Assets, Liabilities and Equity Related to the Financing Cycle

Topics Beyond the Integrated Audit

Filters