Question 1

The PCAOB does not currently have a mandate for convergence with other auditing standards.

Accepted Answer

A) True 
 B)False

Question 2

Which type of audit documentation is required by PCAOB standards?

Accepted Answer

A) Flowcharts. 
B) Narratives. 
C) Questionnaires. 
D) A specific form of documentation is not required. 
A) Flowcharts. 
B) Narratives. 
C) Questionnaires. 
D) A specific form of documentation is not required.

Question 3

Tests of controls are a type of substantive procedure.

Accepted Answer

A) True 
 B)False

Question 4

Which statement is correct?

Accepted Answer

A) Assertions affected by highly objective estimates usually require direct tests of balances. 
B) The materiality of the account totally dictates the substantive procedures to be performed. 
C) The evidence the auditor obtains from risk assessment procedures does not influence the substantive procedures to be performed. 
D) The extent and results of control tests performed by the auditor will influence the substantive procedures to be performed. 
A) Assertions affected by highly objective estimates usually require direct tests of balances. 
B) The materiality of the account totally dictates the substantive procedures to be performed. 
C) The evidence the auditor obtains from risk assessment procedures does not influence the substantive procedures to be performed. 
D) The extent and results of control tests performed by the auditor will influence the substantive procedures to be performed.

Question 5

An integrated audit requires the issuance of separate reports for the opinions expressed on the financial statements and on internal control.

Accepted Answer

A) True 
 B)False

Question 6

An auditor would follow the PCAOB's guidance when auditing a company whose stock is traded on the London Stock Exchange if the company conducts operations in multiple U.S.cities.

Accepted Answer

A) True 
 B)False

Question 7

Which assertion addresses whether all transactions and accounts that should be included in the financial statements are included?

Accepted Answer

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

Question 8

Which of the following statements is true regarding client acceptance or continuance decisions?

Accepted Answer

A) An audit firm cannot discontinue providing audit services to a client without just cause. 
B) Potential audit fees are not a valid consideration in the acceptance or continuance decision. 
C) The client acceptance/continuance decision is one of the most important factors in audit quality. 
D) Audit firms are not permitted to conduct background checks on the management of a potential client. 
A) An audit firm cannot discontinue providing audit services to a client without just cause. 
B) Potential audit fees are not a valid consideration in the acceptance or continuance decision. 
C) The client acceptance/continuance decision is one of the most important factors in audit quality. 
D) Audit firms are not permitted to conduct background checks on the management of a potential client.

Question 9

The AICPA's fundamental principles can be divided into four sections: purpose of the audit,responsibility of the auditor,performance of the audit,and reporting of the results.

Accepted Answer

A) True 
 B)False

Question 10

The activities performed by the auditor throughout the opinion formulation process are determined by whether the auditor is conducting a financial statement audit only or an integrated audit.

Accepted Answer

A) True 
 B)False

Question 11

Financial Statement Assertions Identify and describe the five management assertions inherent in financial statement.Provide examples.

Accepted Answer

Existence or Occurrence: Assertions abou

Question 12

What does business risk include?

Accepted Answer

A) Economic factors. 
B) Competitive factors. 
C) Regulatory risk. 
D) All of the above. 
A) Economic factors. 
B) Competitive factors. 
C) Regulatory risk. 
D) All of the above.

Question 13

Phases of the Audit Opinion Formulation Process Identify the five phases involved in the audit opinion formulation process.

Accepted Answer

Phase I Making Client Acceptance and Con

Question 14

With a substantive audit strategy,what is an auditor likely to do?

Accepted Answer

A) Extensively tests internal controls. 
B) Limit the testing of internal controls. 
C) Not assess control risks. 
D) Issue an adverse opinion on the financial statements. 
A) Extensively tests internal controls. 
B) Limit the testing of internal controls. 
C) Not assess control risks. 
D) Issue an adverse opinion on the financial statements.

Question 15

Which of the following is a procedure that requests a direct written response to the auditor from a third party?

Accepted Answer

A) Inquiry. 
B) Confirmation. 
C) Inspection. 
D) Observation. 
A) Inquiry. 
B) Confirmation. 
C) Inspection. 
D) Observation.

Question 16

What is the scope of applicability of the auditing standards of the AICPA?

Accepted Answer

A) Nonpublic companies traded in non-U.S.markets. 
B) Nonpublic companies in the U.S. 
C) Public companies traded in non-U.S.markets. 
D) Public companies traded in the U.S. 
A) Nonpublic companies traded in non-U.S.markets. 
B) Nonpublic companies in the U.S. 
C) Public companies traded in non-U.S.markets. 
D) Public companies traded in the U.S.

Question 17

When testing accounts receivable,which of the following audit procedures would an auditor likely use with respect to accounts with unusual sales terms?

Accepted Answer

A) Inquiries. 
B) Confirmation. 
C) Contract review. 
D) Aging of receivables. 
A) Inquiries. 
B) Confirmation. 
C) Contract review. 
D) Aging of receivables.

Question 18

The AICPA principles governing an audit explicitly state that an audit has inherent limitations prohibiting an auditor from obtaining reasonable assurance that the statements are free from misstatement.

Accepted Answer

A) True 
 B)False

Question 19

In an integrated audit,the auditor issues an opinion on both the financial statements and internal control.

Accepted Answer

A) True 
 B)False

Question 20

Auditors in the U.S.follow guidance issued by the PCAOB,AICPA,and the IAASB.

Accepted Answer

A) True 
 B)False

The PCAOB does not currently have a mandate for convergence with other auditing standards.

Which type of audit documentation is required by PCAOB standards?

Tests of controls are a type of substantive procedure.

Which statement is correct?

An integrated audit requires the issuance of separate reports for the opinions expressed on the financial statements and on internal control.

An auditor would follow the PCAOB's guidance when auditing a company whose stock is traded on the London Stock Exchange if the company conducts operations in multiple U.S.cities.

Which assertion addresses whether all transactions and accounts that should be included in the financial statements are included?

Which of the following statements is true regarding client acceptance or continuance decisions?

The AICPA's fundamental principles can be divided into four sections: purpose of the audit,responsibility of the auditor,performance of the audit,and reporting of the results.

The activities performed by the auditor throughout the opinion formulation process are determined by whether the auditor is conducting a financial statement audit only or an integrated audit.

Financial Statement Assertions Identify and describe the five management assertions inherent in financial statement.Provide examples.

What does business risk include?

Phases of the Audit Opinion Formulation Process Identify the five phases involved in the audit opinion formulation process.

With a substantive audit strategy,what is an auditor likely to do?

Which of the following is a procedure that requests a direct written response to the auditor from a third party?

What is the scope of applicability of the auditing standards of the AICPA?

When testing accounts receivable,which of the following audit procedures would an auditor likely use with respect to accounts with unusual sales terms?

The AICPA principles governing an audit explicitly state that an audit has inherent limitations prohibiting an auditor from obtaining reasonable assurance that the statements are free from misstatement.

In an integrated audit,the auditor issues an opinion on both the financial statements and internal control.

Auditors in the U.S.follow guidance issued by the PCAOB,AICPA,and the IAASB.

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

The PCAOB does not currently have a mandate for convergence with other auditing standards.

Which type of audit documentation is required by PCAOB standards?

Tests of controls are a type of substantive procedure.

Which statement is correct?

An integrated audit requires the issuance of separate reports for the opinions expressed on the financial statements and on internal control.

An auditor would follow the PCAOB's guidance when auditing a company whose stock is traded on the London Stock Exchange if the company conducts operations in multiple U.S.cities.

Which assertion addresses whether all transactions and accounts that should be included in the financial statements are included?

Which of the following statements is true regarding client acceptance or continuance decisions?

The AICPA's fundamental principles can be divided into four sections: purpose of the audit,responsibility of the auditor,performance of the audit,and reporting of the results.

The activities performed by the auditor throughout the opinion formulation process are determined by whether the auditor is conducting a financial statement audit only or an integrated audit.

Financial Statement Assertions Identify and describe the five management assertions inherent in financial statement.Provide examples.

What does business risk include?

Phases of the Audit Opinion Formulation Process Identify the five phases involved in the audit opinion formulation process.

With a substantive audit strategy,what is an auditor likely to do?

Which of the following is a procedure that requests a direct written response to the auditor from a third party?

What is the scope of applicability of the auditing standards of the AICPA?

When testing accounts receivable,which of the following audit procedures would an auditor likely use with respect to accounts with unusual sales terms?

The AICPA principles governing an audit explicitly state that an audit has inherent limitations prohibiting an auditor from obtaining reasonable assurance that the statements are free from misstatement.

In an integrated audit,the auditor issues an opinion on both the financial statements and internal control.

Auditors in the U.S.follow guidance issued by the PCAOB,AICPA,and the IAASB.

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