Question 1

Audit documentation would not include analyses prepared by the client.

Accepted Answer

A) True 
 B)False  False

Question 2

Which assertion addresses whether the financial statement items are properly classified in the financial statements?

Accepted Answer

A) Completeness. 
B) Existence. 
C) Valuation. 
D) Presentation and Disclosure. 
A) Completeness. 
B) Existence. 
C) Valuation. 
D) Presentation and Disclosure. D

Question 3

Auditors are responsible for having the appropriate competence and capabilities to perform the audit,complying with ethical requirements,and maintaining professional skepticism throughout the audit.

Accepted Answer

A) True 
 B)False  True

Question 4

An auditor gathers evidence on internal controls for which respective time periods for the purposes of expressing an opinion on (1)control effectiveness and for (2)testing controls in the financial statement period? Control Effectiveness Financial Statement

Accepted Answer

A) (1)As of year-end (2)As of year end 
B) (1)As of year-end (2)Throughout the year 
C) (1)Throughout the year (2)As of year end 
D) (1)Throughout the year (2)Throughout the year 
A) (1)As of year-end (2)As of year end 
B) (1)As of year-end (2)Throughout the year 
C) (1)Throughout the year (2)As of year end 
D) (1)Throughout the year (2)Throughout the year

Question 5

If the auditor assesses internal controls to be effective,substantive testing likely will be performed for some,but not all,significant accounts and disclosures.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is the primary assertion related to testing inventory on hand to see if it includes consignment goods?

Accepted Answer

A) Existence. 
B) Completeness. 
C) Valuation. 
D) Rights and Obligations. 
A) Existence. 
B) Completeness. 
C) Valuation. 
D) Rights and Obligations.

Question 7

What are the three broad types of audit procedures? What is the purpose of each test?

Accepted Answer

Risk assessment procedures.Procedures pe

Question 8

The auditor performs substantive procedures to detect material misstatements in account balances.

Accepted Answer

A) True 
 B)False

Question 9

An auditor should give equal emphasis to all management assertions when testing accounts.

Accepted Answer

A) True 
 B)False

Question 10

The PCAOB is committed to merging its standards with those of the AICPA and the IAASB.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following would not affect an auditor's judgment concerning internal controls?

Accepted Answer

A) The assertion being tested. 
B) The design of the control. 
C) The operation of the control. 
D) The level of inherent risk. 
A) The assertion being tested. 
B) The design of the control. 
C) The operation of the control. 
D) The level of inherent risk.

Question 12

The AICPA Principles Governing an Audit include which of the following categories that guide the conduct of an audit?

Accepted Answer

A) Purpose of an audit and premise upon which an audit is conducted. 
B) Responsibilities. 
C) Performance. 
D) All of the above. 
A) Purpose of an audit and premise upon which an audit is conducted. 
B) Responsibilities. 
C) Performance. 
D) All of the above.

Question 13

Presentation and disclosure assertions address whether components of the financial statements are properly classified,described,and disclosed.

Accepted Answer

A) True 
 B)False

Question 14

The auditor needs to obtain absolute assurance as to whether the financial statements are free from material misstatement.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would not be a factor in whether a control weakness would be considered to be a material weakness as opposed to a significant deficiency?

Accepted Answer

A) The materiality of the related balance. 
B) The volume of transactions affected. 
C) The subjectivity of the account balance. 
D) The nature of the client's industry. 
A) The materiality of the related balance. 
B) The volume of transactions affected. 
C) The subjectivity of the account balance. 
D) The nature of the client's industry.

Question 16

Which of the following is a reason why an auditor needs an understanding of internal controls?

Accepted Answer

A) To provide individual comments on internal control non-compliance. 
B) To become comfortable that the client will pay its audit bills. 
C) To assess materiality. 
D) To assess the risk of possible misstatements in the financial statements. 
A) To provide individual comments on internal control non-compliance. 
B) To become comfortable that the client will pay its audit bills. 
C) To assess materiality. 
D) To assess the risk of possible misstatements in the financial statements.

Question 17

An audit firm's portfolio management includes client acceptance and continuance decisions that occur before the audit opinion formation process is initiated.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements accurately describes the auditor's reporting responsibility for a financial statement audit?

Accepted Answer

A) The auditor will state explicitly whether the financial statements are fairly presented in accordance with the applicable financial reporting framework. 
B) The auditor will identify in the auditor's report those circumstances in which auditing principles have not been consistently observed in the current period in comparison to the preceding period. 
C) The auditor will review adjusting journal entries for accuracy,and if the auditor concludes those entries are not reasonably accurate,the auditor must so state in the auditor's report. 
D) The auditor will express an unqualified opinion on the financial statements or will conduct additional audit procedures until such an opinion can be expressed. 
A) The auditor will state explicitly whether the financial statements are fairly presented in accordance with the applicable financial reporting framework. 
B) The auditor will identify in the auditor's report those circumstances in which auditing principles have not been consistently observed in the current period in comparison to the preceding period. 
C) The auditor will review adjusting journal entries for accuracy,and if the auditor concludes those entries are not reasonably accurate,the auditor must so state in the auditor's report. 
D) The auditor will express an unqualified opinion on the financial statements or will conduct additional audit procedures until such an opinion can be expressed.

Question 19

Assertions about existence address whether assets and liabilities exist,and assertions about occurrence address whether recorded transactions,such as sales transactions,have occurred.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following factors influence the risk of material misstatement?

Accepted Answer

A) Business risks. 
B) Management incentives. 
C) IT risks. 
D) All of the above. 
A) Business risks. 
B) Management incentives. 
C) IT risks. 
D) All of the above.

Audit documentation would not include analyses prepared by the client.

Which assertion addresses whether the financial statement items are properly classified in the financial statements?

Auditors are responsible for having the appropriate competence and capabilities to perform the audit,complying with ethical requirements,and maintaining professional skepticism throughout the audit.

An auditor gathers evidence on internal controls for which respective time periods for the purposes of expressing an opinion on (1)control effectiveness and for (2)testing controls in the financial statement period? Control Effectiveness Financial Statement

If the auditor assesses internal controls to be effective,substantive testing likely will be performed for some,but not all,significant accounts and disclosures.

Which of the following is the primary assertion related to testing inventory on hand to see if it includes consignment goods?

What are the three broad types of audit procedures? What is the purpose of each test?

The auditor performs substantive procedures to detect material misstatements in account balances.

An auditor should give equal emphasis to all management assertions when testing accounts.

The PCAOB is committed to merging its standards with those of the AICPA and the IAASB.

Which of the following would not affect an auditor's judgment concerning internal controls?

The AICPA Principles Governing an Audit include which of the following categories that guide the conduct of an audit?

Presentation and disclosure assertions address whether components of the financial statements are properly classified,described,and disclosed.

The auditor needs to obtain absolute assurance as to whether the financial statements are free from material misstatement.

Which of the following would not be a factor in whether a control weakness would be considered to be a material weakness as opposed to a significant deficiency?

Which of the following is a reason why an auditor needs an understanding of internal controls?

An audit firm's portfolio management includes client acceptance and continuance decisions that occur before the audit opinion formation process is initiated.

Which of the following statements accurately describes the auditor's reporting responsibility for a financial statement audit?

Assertions about existence address whether assets and liabilities exist,and assertions about occurrence address whether recorded transactions,such as sales transactions,have occurred.

Which of the following factors influence the risk of material misstatement?

Quality Auditing: Why It Matters

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditor

Professional Legal Liability

Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Long-Term Liabilities and Stockholders Equity Transactions

Completing a Quality Audit

Audit Reports

Filters

Exam 5: Professional Auditing Standards and the Audit Opinion Formulation Process

Audit documentation would not include analyses prepared by the client.

Which assertion addresses whether the financial statement items are properly classified in the financial statements?

Auditors are responsible for having the appropriate competence and capabilities to perform the audit,complying with ethical requirements,and maintaining professional skepticism throughout the audit.

An auditor gathers evidence on internal controls for which respective time periods for the purposes of expressing an opinion on (1)control effectiveness and for (2)testing controls in the financial statement period? Control Effectiveness Financial Statement

If the auditor assesses internal controls to be effective,substantive testing likely will be performed for some,but not all,significant accounts and disclosures.

Which of the following is the primary assertion related to testing inventory on hand to see if it includes consignment goods?

What are the three broad types of audit procedures? What is the purpose of each test?

The auditor performs substantive procedures to detect material misstatements in account balances.

An auditor should give equal emphasis to all management assertions when testing accounts.

The PCAOB is committed to merging its standards with those of the AICPA and the IAASB.

Which of the following would not affect an auditor's judgment concerning internal controls?

The AICPA Principles Governing an Audit include which of the following categories that guide the conduct of an audit?

Presentation and disclosure assertions address whether components of the financial statements are properly classified,described,and disclosed.

The auditor needs to obtain absolute assurance as to whether the financial statements are free from material misstatement.

Which of the following would not be a factor in whether a control weakness would be considered to be a material weakness as opposed to a significant deficiency?

Which of the following is a reason why an auditor needs an understanding of internal controls?

An audit firm's portfolio management includes client acceptance and continuance decisions that occur before the audit opinion formation process is initiated.

Which of the following statements accurately describes the auditor's reporting responsibility for a financial statement audit?

Assertions about existence address whether assets and liabilities exist,and assertions about occurrence address whether recorded transactions,such as sales transactions,have occurred.

Which of the following factors influence the risk of material misstatement?

Quality Auditing: Why It Matters

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditor

Professional Legal Liability

Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Long-Term Liabilities and Stockholders Equity Transactions

Completing a Quality Audit

Audit Reports

Filters