Question 1

Which of the following statements regarding judgmental misstatements is incorrect?

Accepted Answer

A)  They are the same as errors. 
B)  They can arise as a result of a difference in underlying assumptions by the client and the auditor. 
C)  They are not the same as errors. 
D)  They can arise as a result of a difference in the application of judgment by the client and the auditor. 
A)  They are the same as errors. 
B)  They can arise as a result of a difference in underlying assumptions by the client and the auditor. 
C)  They are not the same as errors. 
D)  They can arise as a result of a difference in the application of judgment by the client and the auditor.

Question 2

What are examples of matters of governance interest that the auditor may wish to discuss with those charged with governance.

Accepted Answer

a) Some of the factors to consider in ev

Question 3

If it is not possible to obtain sufficient appropriate audit evidence, the auditor should:

Accepted Answer

A)  express an unqualified opinion. 
B)  express a qualified, adverse or disclaimer of opinion. 
C)  report the client to CICA. 
D)  express an unqualified opinion with an emphasis of matter. 
A)  express an unqualified opinion. 
B)  express a qualified, adverse or disclaimer of opinion. 
C)  report the client to CICA. 
D)  express an unqualified opinion with an emphasis of matter.

Question 4

Which of the following factors is not relevant when management is assessing the going concern assumption?

Accepted Answer

A)  whether the auditor specializes in the client's industry 
B)  the time into the future that an event is likely to take place 
C)  the nature and condition of the entity's business 
D)  the size and complexity of the entity 
A)  whether the auditor specializes in the client's industry 
B)  the time into the future that an event is likely to take place 
C)  the nature and condition of the entity's business 
D)  the size and complexity of the entity

Question 5

Manuel DeSousa knew that the nature of his concern about a client matter would not require a qualification. What kind of audit report was he considering?

Accepted Answer

A)  qualified opinion 
B)  emphasis of matter 
C)  compilation 
D)  none of the above 
A)  qualified opinion 
B)  emphasis of matter 
C)  compilation 
D)  none of the above

Question 6

Which of the following statements is correct regarding a type 1 subsequent event?

Accepted Answer

A)  They are events that do not result in changes to amounts in the financial statements. 
B)  They occur before the end of the client's financial year. 
C)  They may be of such significance as to require disclosure in the financial statements. 
D)  The financial statements are adjusted for any material changes in estimates from these types of events. 
A)  They are events that do not result in changes to amounts in the financial statements. 
B)  They occur before the end of the client's financial year. 
C)  They may be of such significance as to require disclosure in the financial statements. 
D)  The financial statements are adjusted for any material changes in estimates from these types of events.

Question 7

If the auditor is not able to obtain sufficient appropriate audit evidence, the appropriate audit opinion will either be:

Accepted Answer

A)  a qualified opinion or an unqualified opinion. 
B)  a disclaimer of opinion or an emphasis of matter. 
C)  a qualified opinion or disclaimer of opinion. 
D)  an emphasis of matter or a qualified opinion. 
A)  a qualified opinion or an unqualified opinion. 
B)  a disclaimer of opinion or an emphasis of matter. 
C)  a qualified opinion or disclaimer of opinion. 
D)  an emphasis of matter or a qualified opinion.

Question 8

Which of the following are examples of qualitative considerations that may cause misstatements of quantitatively immaterial amounts to be considered material?

Accepted Answer

A)  the client's compliance with contractual requirements of operating or other agreements 
B)  key ratios monitored by analysts or other key users of the financial statements 
C)  both a and b 
D)  none of the above 
A)  the client's compliance with contractual requirements of operating or other agreements 
B)  key ratios monitored by analysts or other key users of the financial statements 
C)  both a and b 
D)  none of the above

Question 9

Subsequent events procedures are normally performed through to and including the date of the auditor's report.

Accepted Answer

A) True 
 B)False

Question 10

A limitation on the scope of the auditor's work could result from an inability to perform procedures or an imposition by the entity.

Accepted Answer

A) True 
 B)False

Question 11

Procedures used by an auditor when conducting a subsequent events review include:

Accepted Answer

A)  assessing continued compliance with borrowing limits and loan covenants. 
B)  enquiring of those charged with governance as to whether any subsequent events have occurred that may affect the financial statements. 
C)  reading minutes of the meetings of the board of directors. 
D)  all of the above. 
A)  assessing continued compliance with borrowing limits and loan covenants. 
B)  enquiring of those charged with governance as to whether any subsequent events have occurred that may affect the financial statements. 
C)  reading minutes of the meetings of the board of directors. 
D)  all of the above.

Question 12

Under the going concern assumption:

Accepted Answer

A)  an entity is viewed as not likely to continue in operation for the foreseeable future. 
B)  an entity's assets and liabilities are recorded at liquidation values. 
C)  an entity is viewed as continuing in business for the foreseeable future. 
D)  an entity is considered to be a separate legal entity from its owners. 
A)  an entity is viewed as not likely to continue in operation for the foreseeable future. 
B)  an entity's assets and liabilities are recorded at liquidation values. 
C)  an entity is viewed as continuing in business for the foreseeable future. 
D)  an entity is considered to be a separate legal entity from its owners.

Question 13

Generally, the further into the future an event is likely to take place, the greater the uncertainty surrounding the event.

Accepted Answer

A) True 
 B)False

Question 14

Sufficiency relates to the quality of audit evidence gathered.

Accepted Answer

A) True 
 B)False

Question 15

A type 1 subsequent event provides evidence with respect to conditions that developed subsequent to year-end.

Accepted Answer

A) True 
 B)False

Question 16

Which items are matters of governance interest that an auditor would wish to discuss with those charged with governance?

Accepted Answer

A)  the general approach and overall scope of the audit 
B)  the potential effect on the financial statements of any material risks and exposures 
C)  material uncertainties related to events and conditions that may cast significant doubt on the entity's ability to continue as a going concern 
D)  all of the above 
A)  the general approach and overall scope of the audit 
B)  the potential effect on the financial statements of any material risks and exposures 
C)  material uncertainties related to events and conditions that may cast significant doubt on the entity's ability to continue as a going concern 
D)  all of the above

Question 17

The final phase of an audit is to assess all of the audit evidence obtained and determine whether it is sufficient and appropriate.

Accepted Answer

A) True 
 B)False

Question 18

A limitation on the scope of the auditor's work may result from:

Accepted Answer

A)  damage to accounting records. 
B)  lack of access to key personnel. 
C)  absence of adequate accounting records. 
D)  all of the above. 
A)  damage to accounting records. 
B)  lack of access to key personnel. 
C)  absence of adequate accounting records. 
D)  all of the above.

Question 19

Matters of governance that the auditor may wish to discuss with those charged with governance include any practical difficulties encountered in performing the audit.

Accepted Answer

A) True 
 B)False

Question 20

At year-end Marissa Albion sent out accounts receivable confirmations. One of the major customers of her client confirmed that they would not be able to pay off the receivable. The client subsequently went bankrupt and an aggrieved shareholder of Marissa's client sued her firm. What type of subsequent event was this?

Accepted Answer

A)  Type 1 
B)  Type 2 
C)  Type 1 and 2 
D)  this was not a subsequent event 
A)  Type 1 
B)  Type 2 
C)  Type 1 and 2 
D)  this was not a subsequent event

Which of the following statements regarding judgmental misstatements is incorrect?

What are examples of matters of governance interest that the auditor may wish to discuss with those charged with governance.

If it is not possible to obtain sufficient appropriate audit evidence, the auditor should:

Which of the following factors is not relevant when management is assessing the going concern assumption?

Manuel DeSousa knew that the nature of his concern about a client matter would not require a qualification. What kind of audit report was he considering?

Which of the following statements is correct regarding a type 1 subsequent event?

If the auditor is not able to obtain sufficient appropriate audit evidence, the appropriate audit opinion will either be:

Which of the following are examples of qualitative considerations that may cause misstatements of quantitatively immaterial amounts to be considered material?

Subsequent events procedures are normally performed through to and including the date of the auditor's report.

A limitation on the scope of the auditor's work could result from an inability to perform procedures or an imposition by the entity.

Procedures used by an auditor when conducting a subsequent events review include:

Under the going concern assumption:

Generally, the further into the future an event is likely to take place, the greater the uncertainty surrounding the event.

Sufficiency relates to the quality of audit evidence gathered.

A type 1 subsequent event provides evidence with respect to conditions that developed subsequent to year-end.

Which items are matters of governance interest that an auditor would wish to discuss with those charged with governance?

The final phase of an audit is to assess all of the audit evidence obtained and determine whether it is sufficient and appropriate.

A limitation on the scope of the auditor's work may result from:

Matters of governance that the auditor may wish to discuss with those charged with governance include any practical difficulties encountered in performing the audit.

Introduction and Overview of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Risk Assessment I

Risk Assessment II

Audit Evidence

Gaining an Understanding of the Clients System of Internal Controls

Sampling and Overview of the Risk Response Phase of the Audit

Execution of the Audit Testing of Controls

Execution of the Audit Performing Substantive Procedures

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Filters

Exam 12: Completing and Reporting on the Audit

Which of the following statements regarding judgmental misstatements is incorrect?

What are examples of matters of governance interest that the auditor may wish to discuss with those charged with governance.

If it is not possible to obtain sufficient appropriate audit evidence, the auditor should:

Which of the following factors is not relevant when management is assessing the going concern assumption?

Manuel DeSousa knew that the nature of his concern about a client matter would not require a qualification. What kind of audit report was he considering?

Which of the following statements is correct regarding a type 1 subsequent event?

If the auditor is not able to obtain sufficient appropriate audit evidence, the appropriate audit opinion will either be:

Which of the following are examples of qualitative considerations that may cause misstatements of quantitatively immaterial amounts to be considered material?

Subsequent events procedures are normally performed through to and including the date of the auditor's report.

A limitation on the scope of the auditor's work could result from an inability to perform procedures or an imposition by the entity.

Procedures used by an auditor when conducting a subsequent events review include:

Under the going concern assumption:

Generally, the further into the future an event is likely to take place, the greater the uncertainty surrounding the event.

Sufficiency relates to the quality of audit evidence gathered.

A type 1 subsequent event provides evidence with respect to conditions that developed subsequent to year-end.

Which items are matters of governance interest that an auditor would wish to discuss with those charged with governance?

The final phase of an audit is to assess all of the audit evidence obtained and determine whether it is sufficient and appropriate.

A limitation on the scope of the auditor's work may result from:

Matters of governance that the auditor may wish to discuss with those charged with governance include any practical difficulties encountered in performing the audit.

Introduction and Overview of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Risk Assessment I

Risk Assessment II

Audit Evidence

Gaining an Understanding of the Clients System of Internal Controls

Sampling and Overview of the Risk Response Phase of the Audit

Execution of the Audit Testing of Controls

Execution of the Audit Performing Substantive Procedures

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Filters