Question 1

Analytical procedures are often used for verification of income statement accounts.

Accepted Answer

A) True 
 B)False

Question 2

Auditors often request that the audit client send a letter of inquiry to those attorneys who have been consulted with respect to litigation, claims, or assessments. The primary reason for this request is to provide the auditors with:

Accepted Answer

A)  An estimate of the dollar amount of the probable loss. 
B)  An expert opinion as to whether a loss is possible, probable, or remote. 
C)  Information concerning the progress of cases to date. 
D)  Corroborative audit evidence. 
A)  An estimate of the dollar amount of the probable loss. 
B)  An expert opinion as to whether a loss is possible, probable, or remote. 
C)  Information concerning the progress of cases to date. 
D)  Corroborative audit evidence.

Question 3

An auditor's decision concerning whether or not to "dual-date" the audit report is based upon the auditor's willingness to:

Accepted Answer

A)  Extend auditing procedures. 
B)  Accept responsibility for year-end adjusting entries. 
C)  Permit inclusion of a note captioned: event (unaudited) subsequent to the date of the auditor's report. 
D)  Assume responsibility for resolving all events subsequent to the issuance of the auditor's report. 
A)  Extend auditing procedures. 
B)  Accept responsibility for year-end adjusting entries. 
C)  Permit inclusion of a note captioned: event (unaudited) subsequent to the date of the auditor's report. 
D)  Assume responsibility for resolving all events subsequent to the issuance of the auditor's report.

Question 4

An example of an internal control weakness is to assign the personnel department responsibility for:

Accepted Answer

A)  Distribution of paychecks. 
B)  Hiring personnel. 
C)  Authorizing deductions from pay. 
D)  Interviewing employees for jobs. 
A)  Distribution of paychecks. 
B)  Hiring personnel. 
C)  Authorizing deductions from pay. 
D)  Interviewing employees for jobs.

Question 5

An approach that quantifies the total likely misstatement as of the current year-end based on the effects of reflecting misstatements during the current year (and not considering any unadjusted previous year misstatements) is referred to as the:

Accepted Answer

A)  Evaluation materiality approach. 
B)  Iron curtain approach. 
C)  Projected misstatement approach. 
D)  Rollover approach. 
A)  Evaluation materiality approach. 
B)  Iron curtain approach. 
C)  Projected misstatement approach. 
D)  Rollover approach.

Question 6

Which of the following is an analytical procedure that should be applied to the income statement?

Accepted Answer

A)  Select sales and expense items and trace amounts to related supporting documents. 
B)  Ascertain that the net income amount in the statement of cash flows agrees with the net income amount in the income statement. 
C)  Obtain from the proper client representatives, the beginning and ending inventory amounts that were used to determine costs of sales. 
D)  Compare the actual revenues and expenses with the corresponding figures of the previous year and investigate significant differences. 
A)  Select sales and expense items and trace amounts to related supporting documents. 
B)  Ascertain that the net income amount in the statement of cash flows agrees with the net income amount in the income statement. 
C)  Obtain from the proper client representatives, the beginning and ending inventory amounts that were used to determine costs of sales. 
D)  Compare the actual revenues and expenses with the corresponding figures of the previous year and investigate significant differences.

Question 7

A refusal by a lawyer to furnish information related to litigation included in the letter of inquiry is likely to result in:

Accepted Answer

A)  Confirmation of related lawsuits with the claimants. 
B)  Qualification of the audit report. 
C)  An assessment that loss of the litigation is probable. 
D)  An adverse opinion. 
A)  Confirmation of related lawsuits with the claimants. 
B)  Qualification of the audit report. 
C)  An assessment that loss of the litigation is probable. 
D)  An adverse opinion.

Question 8

It would be appropriate for the payroll accounting department to be responsible for which of the following functions?

Accepted Answer

A)  Approval of employee time records. 
B)  Maintenance of records of employment, discharges, and pay increases. 
C)  Preparation of periodic governmental reports as to employees' earnings and withholding taxes. 
D)  Distribution of paychecks to employees. 
A)  Approval of employee time records. 
B)  Maintenance of records of employment, discharges, and pay increases. 
C)  Preparation of periodic governmental reports as to employees' earnings and withholding taxes. 
D)  Distribution of paychecks to employees.

Question 9

Which of the following procedures is not a procedure that is completed near the end of the engagement?

Accepted Answer

A)  Review cash transactions. 
B)  Review to identify subsequent events. 
C)  Obtain the lawyer's letter. 
D)  Obtain the letter of representations. 
A)  Review cash transactions. 
B)  Review to identify subsequent events. 
C)  Obtain the lawyer's letter. 
D)  Obtain the letter of representations.

Analytical procedures are often used for verification of income statement accounts.

Auditors often request that the audit client send a letter of inquiry to those attorneys who have been consulted with respect to litigation, claims, or assessments. The primary reason for this request is to provide the auditors with:

An auditor's decision concerning whether or not to "dual-date" the audit report is based upon the auditor's willingness to:

An example of an internal control weakness is to assign the personnel department responsibility for:

An approach that quantifies the total likely misstatement as of the current year-end based on the effects of reflecting misstatements during the current year (and not considering any unadjusted previous year misstatements) is referred to as the:

Which of the following is an analytical procedure that should be applied to the income statement?

A refusal by a lawyer to furnish information related to litigation included in the letter of inquiry is likely to result in:

It would be appropriate for the payroll accounting department to be responsible for which of the following functions?

Which of the following procedures is not a procedure that is completed near the end of the engagement?

The Role of the Public Accountant in the American Economy

Professional Standards

Professional Ethics

Legal Liability of Cpas

Audit Evidence and Documentation

Planning the Audit; Linking Audit Procedures to Risk

Internal Control

Consideration of Internal Control in an Information Technology Environment

Audit Sampling

Cash and Financial Investments

Accounts Receivable, Notes Receivable, and Revenue

Inventories and Cost of Goods Sold

Property, Plant, and Equipment: Depreciation and Depletion

Accounts Payable and Other Liabilities

Debt and Equity Capital

Auditors Report

Integrated Audits of Public Companies

Additional Assurance Services: Historical Financial Information

Additional Assurance Services: Other Information

Internal, Operational, and Compliance Auditing

Filters

Exam 16: Auditing Operations and Completing the Audit

Analytical procedures are often used for verification of income statement accounts.

Auditors often request that the audit client send a letter of inquiry to those attorneys who have been consulted with respect to litigation, claims, or assessments. The primary reason for this request is to provide the auditors with:

An auditor's decision concerning whether or not to "dual-date" the audit report is based upon the auditor's willingness to:

An example of an internal control weakness is to assign the personnel department responsibility for:

An approach that quantifies the total likely misstatement as of the current year-end based on the effects of reflecting misstatements during the current year (and not considering any unadjusted previous year misstatements) is referred to as the:

Which of the following is an analytical procedure that should be applied to the income statement?

A refusal by a lawyer to furnish information related to litigation included in the letter of inquiry is likely to result in:

It would be appropriate for the payroll accounting department to be responsible for which of the following functions?

Which of the following procedures is not a procedure that is completed near the end of the engagement?

The Role of the Public Accountant in the American Economy

Professional Standards

Professional Ethics

Legal Liability of Cpas

Audit Evidence and Documentation

Planning the Audit; Linking Audit Procedures to Risk

Internal Control

Consideration of Internal Control in an Information Technology Environment

Audit Sampling

Cash and Financial Investments

Accounts Receivable, Notes Receivable, and Revenue

Inventories and Cost of Goods Sold

Property, Plant, and Equipment: Depreciation and Depletion

Accounts Payable and Other Liabilities

Debt and Equity Capital

Auditors Report

Integrated Audits of Public Companies

Additional Assurance Services: Historical Financial Information

Additional Assurance Services: Other Information

Internal, Operational, and Compliance Auditing

Filters