Question 1

Physically inspecting a client's assets is an audit procedure.

Accepted Answer

A) True 
 B)False

Question 2

The revenue cycles includes transactions related to revenue such as sales,receivables,and gain or loss from disposal of equipment.

Accepted Answer

A) True 
 B)False

Question 3

Which assertion is most closely related to the determination of the adequacy of the allowance for doubtful accounts?

Accepted Answer

A) Existence. 
B) Valuation. 
C) Rights and Obligations. 
D) Presentation and Disclosure. 
A) Existence. 
B) Valuation. 
C) Rights and Obligations. 
D) Presentation and Disclosure.

Question 4

Developing an understanding of the client's business and industry is essential to the auditor's assessment of risk.

Accepted Answer

A) True 
 B)False

Question 5

Audit procedures can be classified as risk assessment procedures,tests of controls,or substantive procedures.

Accepted Answer

A) True 
 B)False

Question 6

The auditing standards What is the structure or format of each auditing standard issued by the AICPA and by the IAASB? What is the purpose of each section?

Accepted Answer

Introduction explains the purpose and sc

Question 7

At what level does the auditor assess the risk of material misstatement?

Accepted Answer

A) The financial statement level. 
B) The company level. 
C) The assertion level. 
D) Both A and C. 
E) All of the above. 
A) The financial statement level. 
B) The company level. 
C) The assertion level. 
D) Both A and C. 
E) All of the above.

Question 8

The purpose of the audit program is to list the audit procedures to be followed in gathering audit evidence and to help those in charge of the audit to monitor the progress and supervise the work.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following factors affect the substantive procedures performed in an audit?

Accepted Answer

A) The subjectivity of the accounting process. 
B) Size of the account. 
C) Effectiveness of the relevant controls. 
D) All of the above affect the substantive procedures that are performed. 
A) The subjectivity of the accounting process. 
B) Size of the account. 
C) Effectiveness of the relevant controls. 
D) All of the above affect the substantive procedures that are performed.

Question 10

What does the effectiveness of internal controls influence?

Accepted Answer

A) Inherent risk. 
B) Control risk. 
C) Risk of material misstatement. 
D) Both B and C. 
A) Inherent risk. 
B) Control risk. 
C) Risk of material misstatement. 
D) Both B and C.

Question 11

Which of the following is not a control that the PCAOB has identified that auditors should consider in evaluating whether or not an organization has sufficiently addressed fraud risk?

Accepted Answer

A) Controls over significant,unusual transaction. 
B) Controls over related-party transactions. 
C) Controls related to marketable securities. 
D) Controls related to significant management estimates. 
A) Controls over significant,unusual transaction. 
B) Controls over related-party transactions. 
C) Controls related to marketable securities. 
D) Controls related to significant management estimates.

Question 12

Which of the following statements about assertions is true?

Accepted Answer

A) All assertions are equally important for all accounts. 
B) The importance of an assertion depends upon the account. 
C) Assertions are not related to accounts. 
D) None of the above. 
A) All assertions are equally important for all accounts. 
B) The importance of an assertion depends upon the account. 
C) Assertions are not related to accounts. 
D) None of the above.

Question 13

If the auditor's assessment is that there is high risk due to the subjectivity of the accounting process,substantive procedures should be more rigorous.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following assertions would the auditor usually consider most relevant for accounts payable?

Accepted Answer

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

Question 15

Which of the following is not a reason why an auditor obtains an understanding of internal controls?

Accepted Answer

A) Understanding the entity's internal control is a requirement of professional auditing standards. 
B) The auditor must use the information to assess the risk of material misstatements arising from the lack of internal control. 
C) It is the primary basis for the audit report. 
D) It assists the auditor in designing the nature,timing,and extent of further audit procedures. 
A) Understanding the entity's internal control is a requirement of professional auditing standards. 
B) The auditor must use the information to assess the risk of material misstatements arising from the lack of internal control. 
C) It is the primary basis for the audit report. 
D) It assists the auditor in designing the nature,timing,and extent of further audit procedures.

Question 16

The effectiveness of entity-wide controls may reduce the extent of testing of transaction controls.

Accepted Answer

A) True 
 B)False

Question 17

What are the AICPA's fundamental principles?

Accepted Answer

The AICPA has developed seven fundamenta

Question 18

When assessing the effectiveness of controls for relevant assertions,the auditor tests only transaction controls.

Accepted Answer

A) True 
 B)False

Question 19

Substantive analytical procedures are optional for significant accounts and disclosures.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements is correct concerning the auditor's opinion on internal control effectiveness?

Accepted Answer

A) The report describes any material weaknesses and discusses actions taken by management to remediate the problems. 
B) The report does not discuss whether the control weaknesses were first identified by management or the auditor. 
C) The report does not recognize the integrated nature of the audit and the effect of the material weakness on the planning of the financial statement audit. 
D) The report identifies management's actions to remedy the prior year's control weaknesses. 
A) The report describes any material weaknesses and discusses actions taken by management to remediate the problems. 
B) The report does not discuss whether the control weaknesses were first identified by management or the auditor. 
C) The report does not recognize the integrated nature of the audit and the effect of the material weakness on the planning of the financial statement audit. 
D) The report identifies management's actions to remedy the prior year's control weaknesses.

Physically inspecting a client's assets is an audit procedure.

The revenue cycles includes transactions related to revenue such as sales,receivables,and gain or loss from disposal of equipment.

Which assertion is most closely related to the determination of the adequacy of the allowance for doubtful accounts?

Developing an understanding of the client's business and industry is essential to the auditor's assessment of risk.

Audit procedures can be classified as risk assessment procedures,tests of controls,or substantive procedures.

The auditing standards What is the structure or format of each auditing standard issued by the AICPA and by the IAASB? What is the purpose of each section?

At what level does the auditor assess the risk of material misstatement?

The purpose of the audit program is to list the audit procedures to be followed in gathering audit evidence and to help those in charge of the audit to monitor the progress and supervise the work.

Which of the following factors affect the substantive procedures performed in an audit?

What does the effectiveness of internal controls influence?

Which of the following is not a control that the PCAOB has identified that auditors should consider in evaluating whether or not an organization has sufficiently addressed fraud risk?

Which of the following statements about assertions is true?

If the auditor's assessment is that there is high risk due to the subjectivity of the accounting process,substantive procedures should be more rigorous.

Which of the following assertions would the auditor usually consider most relevant for accounts payable?

Which of the following is not a reason why an auditor obtains an understanding of internal controls?

The effectiveness of entity-wide controls may reduce the extent of testing of transaction controls.

What are the AICPA's fundamental principles?

When assessing the effectiveness of controls for relevant assertions,the auditor tests only transaction controls.

Substantive analytical procedures are optional for significant accounts and disclosures.

Which of the following statements is correct concerning the auditor's opinion on internal control effectiveness?

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

Physically inspecting a client's assets is an audit procedure.

The revenue cycles includes transactions related to revenue such as sales,receivables,and gain or loss from disposal of equipment.

Which assertion is most closely related to the determination of the adequacy of the allowance for doubtful accounts?

Developing an understanding of the client's business and industry is essential to the auditor's assessment of risk.

Audit procedures can be classified as risk assessment procedures,tests of controls,or substantive procedures.

The auditing standards What is the structure or format of each auditing standard issued by the AICPA and by the IAASB? What is the purpose of each section?

At what level does the auditor assess the risk of material misstatement?

The purpose of the audit program is to list the audit procedures to be followed in gathering audit evidence and to help those in charge of the audit to monitor the progress and supervise the work.

Which of the following factors affect the substantive procedures performed in an audit?

What does the effectiveness of internal controls influence?

Which of the following is not a control that the PCAOB has identified that auditors should consider in evaluating whether or not an organization has sufficiently addressed fraud risk?

Which of the following statements about assertions is true?

If the auditor's assessment is that there is high risk due to the subjectivity of the accounting process,substantive procedures should be more rigorous.

Which of the following assertions would the auditor usually consider most relevant for accounts payable?

Which of the following is not a reason why an auditor obtains an understanding of internal controls?

The effectiveness of entity-wide controls may reduce the extent of testing of transaction controls.

What are the AICPA's fundamental principles?

When assessing the effectiveness of controls for relevant assertions,the auditor tests only transaction controls.

Substantive analytical procedures are optional for significant accounts and disclosures.

Which of the following statements is correct concerning the auditor's opinion on internal control effectiveness?

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