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

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Comparability is one of the five management assertions.

(True/False)
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An audit must be performed by persons who can make sound judgments relating to complex accounting issues.

(True/False)
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A controls reliance audit includes substantive procedures and does not include tests of controls.

(True/False)
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Which of the following groups are committed to the convergence of the auditing standards?

(Multiple Choice)
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Which of the following is not a component of business risk?

(Multiple Choice)
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The common purpose of auditing standards created by the various authorities is to provide reasonable assurance that audits are conducted in a quality manner.

(True/False)
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PCAOB guidance includes standards on certain auditor responsibilities related to SEC filings.

(True/False)
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Which of the following statements about the auditing standards issued by the AICPA is true?

(Multiple Choice)
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Which of the following is not required by the PCAOB's General Auditing Standards category?

(Multiple Choice)
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Inherent risk refers to the susceptibility of an assertion about a class of transaction,account balance,or disclosure to a misstatement that could be immaterial,either individually or when aggregated with other misstatements,before consideration of any related controls.

(True/False)
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The auditor is not required to test every control related to relevant assertions in a significant account.

(True/False)
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In performing substantive tests on account balances,the auditor performs tests for all five assertions.

(True/False)
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Which of the following organizations provides auditing standards for public companies?

(Multiple Choice)
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Assertions are relevant to the audit process because they are the representations of management embodied in the financial statements.

(True/False)
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Making client acceptance and continuance decisions is the first phase of the audit opinion formulation process.

(True/False)
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The auditing standards issued by the PCAOB are identical to the auditing standards issued by the AICPA.

(True/False)
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Which of the following is not a question an auditor considers in deciding whether to pursue a lower control risk approach prior to substantive testing?

(Multiple Choice)
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Tests of controls are procedures are procedures performed by the auditor to obtain information for identifying and assessing the risks of material misstatement in the financial statements.

(True/False)
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If the auditor's assessment of the materiality of the account balance is high,what would be the respective effect on (1)the extent of substantive testing and (2)the nature of procedures performed?

(Multiple Choice)
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The PCAOB's General Auditing Standards requires that an audit be performed by which type of person?

(Multiple Choice)
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