Question 1

With a dual-purpose test,what is an auditor likely to do?

Accepted Answer

A) Perform a substantive procedure concurrently with a test of a control. 
B) Perform a substantive procedure concurrently with a risk assessment test. 
C) Perform a risk assessment test concurrently with a test of a control. 
D) None of the above. 
A) Perform a substantive procedure concurrently with a test of a control. 
B) Perform a substantive procedure concurrently with a risk assessment test. 
C) Perform a risk assessment test concurrently with a test of a control. 
D) None of the above.

Question 2

The first phase in the audit opinion formulation process is performing a risk assessment.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following terms describes procedures designed to detect material misstatements in accounts?

Accepted Answer

A) Substantive procedures. 
B) Control tests. 
C) Risk assessment procedures. 
D) Business risk procedures. 
A) Substantive procedures. 
B) Control tests. 
C) Risk assessment procedures. 
D) Business risk procedures.

Question 4

Audit documentation is frequently referred to as working papers.

Accepted Answer

A) True 
 B)False

Question 5

Which statement is true concerning materiality?

Accepted Answer

A) Misstatements are material if they could reasonably be expected to influence the decisions of users of the financial statements. 
B) Materiality guidelines are specifically prescribed by the PCAOB. 
C) Materiality is not a useful concept in assessing internal control effectiveness. 
D) Materiality is a concept applied to financial statement presentation but not to disclosures. 
A) Misstatements are material if they could reasonably be expected to influence the decisions of users of the financial statements. 
B) Materiality guidelines are specifically prescribed by the PCAOB. 
C) Materiality is not a useful concept in assessing internal control effectiveness. 
D) Materiality is a concept applied to financial statement presentation but not to disclosures.

Question 6

Evidence is required to be sufficient and appropriate in order to provide a reasonable basis for the auditor's opinion.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a use of audit documentation?

Accepted Answer

A) Assisting the engagement team in planning and performing the audit. 
B) Assisting members of the engagement team responsible for supervising and reviewing the audit work. 
C) Retaining a record of matters of continuing significance to future audits of the same organization. 
D) All of the above. 
A) Assisting the engagement team in planning and performing the audit. 
B) Assisting members of the engagement team responsible for supervising and reviewing the audit work. 
C) Retaining a record of matters of continuing significance to future audits of the same organization. 
D) All of the above.

Question 8

Which auditing standards apply to private companies?

Accepted Answer

A) The AICPA Standards. 
B) The IASSB Standards. 
C) The Standards of the PCAOB. 
D) All of the above. 
A) The AICPA Standards. 
B) The IASSB Standards. 
C) The Standards of the PCAOB. 
D) All of the above.

Question 9

For an integrated audit,the auditor's opinion about internal control effectiveness is based on control effectiveness at year-end as opposed to throughout the year.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following factors has the greatest effect on the reliability of financial statements?

Accepted Answer

A) The size of the client 
B) The industry of the client 
C) The client's internal control structure. 
D) The client's trend of earnings. 
A) The size of the client 
B) The industry of the client 
C) The client's internal control structure. 
D) The client's trend of earnings.

Question 11

Identify at least five specific procedures an auditor can apply to collect audit evidence and provide an example of each.

Accepted Answer

Audit Procedure (examples in italics)
In

Question 12

If controls are effective,there is a higher likelihood that the financial statements are free of material misstatement.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a procedure which analyzes plausible relationships among financial and nonfinancial data?

Accepted Answer

A) Analytical procedures. 
B) Scanning. 
C) Reviewing. 
D) Observation. 
A) Analytical procedures. 
B) Scanning. 
C) Reviewing. 
D) Observation.

Question 14

Identify at least five purposes served by audit documentation.

Accepted Answer

The overall purpose of audit documentati

Question 15

Control risk refers to the risk that a misstatement could occur in an assertion about a class of transaction,account balance,or disclosure,and which could be material,either individually or when aggregated with other misstatements,will not be prevented,or detected and corrected,on a timely basis by the entity's internal control.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not a typical accounting cycle?

Accepted Answer

A) Revenue. 
B) Inventory. 
C) Cash. 
D) Internal controls. 
A) Revenue. 
B) Inventory. 
C) Cash. 
D) Internal controls.

Question 17

The Public Company Accounting Oversight Board (PCAOB)does not set specific standards for audits of public companies.

Accepted Answer

A) True 
 B)False

Question 18

The cycle approach to auditing is a convenient way to break the audit into manageable time periods.

Accepted Answer

A) True 
 B)False

Question 19

There is an inverse relationship between the assessment of risk of material misstatement in an account and the amount of evidence required.

Accepted Answer

A) True 
 B)False

Question 20

In some circumstances,the auditor will not express an opinion on the financial statements but will instead state that an opinion cannot be expressed.

Accepted Answer

A) True 
 B)False

With a dual-purpose test,what is an auditor likely to do?

The first phase in the audit opinion formulation process is performing a risk assessment.

Which of the following terms describes procedures designed to detect material misstatements in accounts?

Audit documentation is frequently referred to as working papers.

Which statement is true concerning materiality?

Evidence is required to be sufficient and appropriate in order to provide a reasonable basis for the auditor's opinion.

Which of the following is a use of audit documentation?

Which auditing standards apply to private companies?

For an integrated audit,the auditor's opinion about internal control effectiveness is based on control effectiveness at year-end as opposed to throughout the year.

Which of the following factors has the greatest effect on the reliability of financial statements?

Identify at least five specific procedures an auditor can apply to collect audit evidence and provide an example of each.

If controls are effective,there is a higher likelihood that the financial statements are free of material misstatement.

Which of the following is a procedure which analyzes plausible relationships among financial and nonfinancial data?

Identify at least five purposes served by audit documentation.

Which of the following is not a typical accounting cycle?

The Public Company Accounting Oversight Board (PCAOB)does not set specific standards for audits of public companies.

The cycle approach to auditing is a convenient way to break the audit into manageable time periods.

There is an inverse relationship between the assessment of risk of material misstatement in an account and the amount of evidence required.

In some circumstances,the auditor will not express an opinion on the financial statements but will instead state that an opinion cannot be expressed.

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

With a dual-purpose test,what is an auditor likely to do?

The first phase in the audit opinion formulation process is performing a risk assessment.

Which of the following terms describes procedures designed to detect material misstatements in accounts?

Audit documentation is frequently referred to as working papers.

Which statement is true concerning materiality?

Evidence is required to be sufficient and appropriate in order to provide a reasonable basis for the auditor's opinion.

Which of the following is a use of audit documentation?

Which auditing standards apply to private companies?

For an integrated audit,the auditor's opinion about internal control effectiveness is based on control effectiveness at year-end as opposed to throughout the year.

Which of the following factors has the greatest effect on the reliability of financial statements?

Identify at least five specific procedures an auditor can apply to collect audit evidence and provide an example of each.

If controls are effective,there is a higher likelihood that the financial statements are free of material misstatement.

Which of the following is a procedure which analyzes plausible relationships among financial and nonfinancial data?

Identify at least five purposes served by audit documentation.

Which of the following is not a typical accounting cycle?

The Public Company Accounting Oversight Board (PCAOB)does not set specific standards for audits of public companies.

The cycle approach to auditing is a convenient way to break the audit into manageable time periods.

There is an inverse relationship between the assessment of risk of material misstatement in an account and the amount of evidence required.

In some circumstances,the auditor will not express an opinion on the financial statements but will instead state that an opinion cannot be expressed.

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