Question 1

If the auditor decides that the internal controls are not designed appropriately then:

Accepted Answer

A)  the auditor tests those controls in-depth. 
B)  the auditor performs tests of internal control for those transactions and accounts deemed risky. 
C)  the auditor performs substantive procedures. 
D)  All of the above. 
A)  the auditor tests those controls in-depth. 
B)  the auditor performs tests of internal control for those transactions and accounts deemed risky. 
C)  the auditor performs substantive procedures. 
D)  All of the above.

Question 2

GAAS refers to:

Accepted Answer

A)  ten auditing standards grouped into three sections. 
B)  those auditing standards that apply only to audits of public companies. 
C)  accounting principles generally accepted. 
D)  None of the above. 
A)  ten auditing standards grouped into three sections. 
B)  those auditing standards that apply only to audits of public companies. 
C)  accounting principles generally accepted. 
D)  None of the above.

Question 3

Which assertion(s) is met if proper cut-off is achieved:

Accepted Answer

A)  right and obligations. 
B)  completeness. 
C)  existence or occurrence. 
D)  Both b and c 
A)  right and obligations. 
B)  completeness. 
C)  existence or occurrence. 
D)  Both b and c

Question 4

Non public companies:

Accepted Answer

A)  do not have to be audited. 
B)  are not required to have an audit of their ICFR. 
C)  follow different standards than public companies. 
D)  present little, if any, risk to auditors. 
A)  do not have to be audited. 
B)  are not required to have an audit of their ICFR. 
C)  follow different standards than public companies. 
D)  present little, if any, risk to auditors.

Question 5

Auditing Standard #5 requires:

Accepted Answer

A)  auditors perform tests of internal control. 
B)  auditors have technical competence to perform audits. 
C)  auditors exercise professional skepticism. 
D)  Both b and c 
A)  auditors perform tests of internal control. 
B)  auditors have technical competence to perform audits. 
C)  auditors exercise professional skepticism. 
D)  Both b and c

Question 6

If an entity's financial records do not contain sufficient evidentiary matter the auditor must:

Accepted Answer

A)  issue a qualified opinion. 
B)  decline the audit. 
C)  perform the audit and obtain the evidence itself. 
D)  None of the above. 
A)  issue a qualified opinion. 
B)  decline the audit. 
C)  perform the audit and obtain the evidence itself. 
D)  None of the above.

Question 7

Which of the following source of evidence would be the most reliable:

Accepted Answer

A)  a written confirmation sent by a bank directly to the auditor. 
B)  a written confirmation sent by a debtor to the client. 
C)  a written document produced electronically by a client with good internal controls. 
D)  a written document in the form of a fax sent by a debtor to the client indicating acceptance of a special offer. 
A)  a written confirmation sent by a bank directly to the auditor. 
B)  a written confirmation sent by a debtor to the client. 
C)  a written document produced electronically by a client with good internal controls. 
D)  a written document in the form of a fax sent by a debtor to the client indicating acceptance of a special offer.

Question 8

Materiality decisions are based on:

Accepted Answer

A)  qualitative factors. 
B)  quantitative factors. 
C)  the audit fees. 
D)  Both a and b 
A)  qualitative factors. 
B)  quantitative factors. 
C)  the audit fees. 
D)  Both a and b

Question 9

Which of the below depicts the correct path of action an auditor takes in assessing assertions:

Accepted Answer

A)  management assertions-audit procedures-risk assessment. 
B)  management assertions-risk assessment-audit evidence. 
C)  management assertions-risk assessment-audit procedures. 
D)  management assertions-material risk assessment-audit procedures. 
A)  management assertions-audit procedures-risk assessment. 
B)  management assertions-risk assessment-audit evidence. 
C)  management assertions-risk assessment-audit procedures. 
D)  management assertions-material risk assessment-audit procedures.

Question 10

As part of the proposal process the auditor:

Accepted Answer

A)  determines if the potential client is a good fit. 
B)  determines of the auditor can perform an effective audit. 
C)  determines if the potential client management is reputed to be of good character. 
D)  All of the above. 
A)  determines if the potential client is a good fit. 
B)  determines of the auditor can perform an effective audit. 
C)  determines if the potential client management is reputed to be of good character. 
D)  All of the above.

Question 11

Audit risk is defined as:

Accepted Answer

A)  the risk that the client is committing fraud. 
B)  the risk associated with a specific client. 
C)  the risk that the auditor fails to detect a material misstatement. 
D)  All of the above. 
A)  the risk that the client is committing fraud. 
B)  the risk associated with a specific client. 
C)  the risk that the auditor fails to detect a material misstatement. 
D)  All of the above.

Question 12

Due professional care applies to:

Accepted Answer

A)  sample selection. 
B)  follows appropriate audit standards. 
C)  accepts professional guidance. 
D)  All of the above apply to due professional care. 
A)  sample selection. 
B)  follows appropriate audit standards. 
C)  accepts professional guidance. 
D)  All of the above apply to due professional care.

Question 13

The planning process begins with an evaluation of entry level controls.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following could cause an auditor to refuse to submit a proposal for a prospective audit client:

Accepted Answer

A)  a senior sales V.P.'s 10 year-old conviction for tax evasion. 
B)  a board of directors comprised of management's close friends. 
C)  a reputation for high employee turnover. 
D)  None of the above. 
A)  a senior sales V.P.'s 10 year-old conviction for tax evasion. 
B)  a board of directors comprised of management's close friends. 
C)  a reputation for high employee turnover. 
D)  None of the above.

Question 15

To come to an opinion on management's assertions, an auditor must:

Accepted Answer

A)  obtain evidence in writing. 
B)  obtain evidence that is convincing. 
C)  obtain evidence that is appropriate and reliable. 
D)  All of the above. 
A)  obtain evidence in writing. 
B)  obtain evidence that is convincing. 
C)  obtain evidence that is appropriate and reliable. 
D)  All of the above.

Question 16

Which of the below is an example of an inherent risk:

Accepted Answer

A)  the risk that the economy will sink into recession. 
B)  the risk that the firm will be a take-over target. 
C)  the risk that a particular financial statement account is incorrect. 
D)  All of the above. 
A)  the risk that the economy will sink into recession. 
B)  the risk that the firm will be a take-over target. 
C)  the risk that a particular financial statement account is incorrect. 
D)  All of the above.

Question 17

An audit firm must submit a proposal if a potential new client inquires about their audit services.

Accepted Answer

A) True 
 B)False

Question 18

For public companies, the auditor also reviews which of the following on a regular basis:

Accepted Answer

A)  the 10Qs filed quarterly with the SEC. 
B)  the 8-Ks (if filed) with the SEC. 
C)  the 10Ks filed annually with the SEC. 
D)  All of the above. 
A)  the 10Qs filed quarterly with the SEC. 
B)  the 8-Ks (if filed) with the SEC. 
C)  the 10Ks filed annually with the SEC. 
D)  All of the above.

Question 19

An auditor selects a sample using a random number generator, even though she believes the account being audited presents increased risk. This is a violation of:

Accepted Answer

A)  professional care. 
B)  professional skepticism. 
C)  Both a and b 
D)  Neither a nor b. 
A)  professional care. 
B)  professional skepticism. 
C)  Both a and b 
D)  Neither a nor b.

Question 20

Information system refers to:

Accepted Answer

A)  the client's accounting information system. 
B)  the system by which management collects and analyzes information. 
C)  the computer system used by the client. 
D)  Both a and b 
A)  the client's accounting information system. 
B)  the system by which management collects and analyzes information. 
C)  the computer system used by the client. 
D)  Both a and b

If the auditor decides that the internal controls are not designed appropriately then:

GAAS refers to:

Which assertion(s) is met if proper cut-off is achieved:

Non public companies:

Auditing Standard #5 requires:

If an entity's financial records do not contain sufficient evidentiary matter the auditor must:

Which of the following source of evidence would be the most reliable:

Materiality decisions are based on:

Which of the below depicts the correct path of action an auditor takes in assessing assertions:

As part of the proposal process the auditor:

Audit risk is defined as:

Due professional care applies to:

The planning process begins with an evaluation of entry level controls.

Which of the following could cause an auditor to refuse to submit a proposal for a prospective audit client:

To come to an opinion on management's assertions, an auditor must:

Which of the below is an example of an inherent risk:

An audit firm must submit a proposal if a potential new client inquires about their audit services.

For public companies, the auditor also reviews which of the following on a regular basis:

An auditor selects a sample using a random number generator, even though she believes the account being audited presents increased risk. This is a violation of:

Information system refers to:

An Introduction to Auditing

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

Completing the Integrated Audit and Reporting

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

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Exam 2: Overview of an Integrated Audit

If the auditor decides that the internal controls are not designed appropriately then:

GAAS refers to:

Which assertion(s) is met if proper cut-off is achieved:

Non public companies:

Auditing Standard #5 requires:

If an entity's financial records do not contain sufficient evidentiary matter the auditor must:

Which of the following source of evidence would be the most reliable:

Materiality decisions are based on:

Which of the below depicts the correct path of action an auditor takes in assessing assertions:

As part of the proposal process the auditor:

Audit risk is defined as:

Due professional care applies to:

The planning process begins with an evaluation of entry level controls.

Which of the following could cause an auditor to refuse to submit a proposal for a prospective audit client:

To come to an opinion on management's assertions, an auditor must:

Which of the below is an example of an inherent risk:

An audit firm must submit a proposal if a potential new client inquires about their audit services.

For public companies, the auditor also reviews which of the following on a regular basis:

An auditor selects a sample using a random number generator, even though she believes the account being audited presents increased risk. This is a violation of:

Information system refers to:

An Introduction to Auditing

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

Completing the Integrated Audit and Reporting

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