Question 1

Known misstatements ________.

Accepted Answer

A)  are those actually identified during the audit, so there is no uncertainty about their existence 
B)  are those that probably exist, based on audit evidence examined 
C)  are those that could exist over and above the total of known and likely misstatements because of the fundamental limitations of auditing 
D)  are those for which the amount of possible misstatement cannot be precisely quantified 
A)  are those actually identified during the audit, so there is no uncertainty about their existence 
B)  are those that probably exist, based on audit evidence examined 
C)  are those that could exist over and above the total of known and likely misstatements because of the fundamental limitations of auditing 
D)  are those for which the amount of possible misstatement cannot be precisely quantified

Question 2

Auditors consider materiality at each of the following stages of an audit EXCEPT ________.

Accepted Answer

A)  at the planning stage 
B)  at the interim audit to assess internal controls 
C)  while performing the year-end audit 
D)  at the final evaluation stage when forming the audit opinion 
A)  at the planning stage 
B)  at the interim audit to assess internal controls 
C)  while performing the year-end audit 
D)  at the final evaluation stage when forming the audit opinion

Question 3

________ paragraphs refer only to information presented or disclosed in the financial statements.

Accepted Answer

A)  Scope 
B)  Other Matter 
C)  Opinion 
D)  Emphasis of Matter 
A)  Scope 
B)  Other Matter 
C)  Opinion 
D)  Emphasis of Matter

Question 4

When should an independence letter be received?

Accepted Answer

A)  At the audit report date. 
B)  Near the end of the audit. 
C)  Before the engagement. 
D)  Throughout the audit. 
A)  At the audit report date. 
B)  Near the end of the audit. 
C)  Before the engagement. 
D)  Throughout the audit.

Question 5

What is an Other Matter (OM) paragraph?
A.

Accepted Answer

An OM is like a EOM paragraph except tha

Question 6

What are the three categories of uncorrected misstatements?

Accepted Answer

For evaluation, uncorrected misstatement

Question 7

A reply to a lawyer's letters should be issued ________.

Accepted Answer

A)  at the audit report date 
B)  near the end of the audit 
C)  before the engagement 
D)  throughout the audit 
A)  at the audit report date 
B)  near the end of the audit 
C)  before the engagement 
D)  throughout the audit

Question 8

Emphasis of Matter paragraphs refer only to information presented or disclosed in the financial statements.

Accepted Answer

A) True 
 B)False

Question 9

The auditor actively seeks audit evidence up to the date of the audit report. After that date, the auditor does not seek new evidence.

Accepted Answer

A) True 
 B)False

Question 10

Auditors have a responsibility to perform audit procedures ________.

Accepted Answer

A)  after the report date 
B)  until the report date 
C)  after the report issuance date 
D)  after the report date for events between the report date and a later dual dated event 
A)  after the report date 
B)  until the report date 
C)  after the report issuance date 
D)  after the report date for events between the report date and a later dual dated event

Question 11

Further possible misstatements ________.

Accepted Answer

A)  are those actually identified during the audit, so there is no uncertainty about their existence 
B)  are those that probably exist, based on audit evidence examined 
C)  are those that could exist over and above the total of known and likely misstatements because of the fundamental limitations of auditing 
D)  are those for which the amount of possible misstatement cannot be precisely quantified 
A)  are those actually identified during the audit, so there is no uncertainty about their existence 
B)  are those that probably exist, based on audit evidence examined 
C)  are those that could exist over and above the total of known and likely misstatements because of the fundamental limitations of auditing 
D)  are those for which the amount of possible misstatement cannot be precisely quantified

Question 12

Likely misstatements are those that probably exist, based on audit evidence examined.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements about forming an audit opinion is FALSE?

Accepted Answer

A)  Auditors need to form an opinion on whether the financial statements are presented fairly in all material respects and in accordance with GAAP. 
B)  The auditor must make a number of professional judgments as set out in CAS 700. 
C)  The auditor must decide whether the audit team has obtained sufficient appropriate audit evidence providing reasonable assurance that the financial statements as a whole are free from material misstatement due to fraud or error. 
D)  The auditor must decide if any uncorrected misstatements are material individually but not in aggregate. 
A)  Auditors need to form an opinion on whether the financial statements are presented fairly in all material respects and in accordance with GAAP. 
B)  The auditor must make a number of professional judgments as set out in CAS 700. 
C)  The auditor must decide whether the audit team has obtained sufficient appropriate audit evidence providing reasonable assurance that the financial statements as a whole are free from material misstatement due to fraud or error. 
D)  The auditor must decide if any uncorrected misstatements are material individually but not in aggregate.

Question 14

Dual dating is used to cut off the subsequent event procedural responsibility at the earlier date.

Accepted Answer

A) True 
 B)False

Question 15

The auditor must decide if any uncorrected misstatements are material individually but not in aggregate.

Accepted Answer

A) True 
 B)False

Question 16

Auditors typically do not keep track of the differences between management estimates and the most reasonable estimates supported by audit evidence.

Accepted Answer

A) True 
 B)False

Question 17

List the most important matters arising from the audit of financial statements that should be communicated to the audit committee.

Accepted Answer

The audit committee's expectations need

Question 18

CAS 200 provides a framework for the key principles that guide the conduct of a financial statement audit in accordance with generally accepted auditing standards. It defines all of the following with respect to Canadian Auditing Standards EXCEPT their ________.

Accepted Answer

A)  scope 
B)  authority 
C)  interrelationship 
D)  structure 
A)  scope 
B)  authority 
C)  interrelationship 
D)  structure

Question 19

You are auditing Green Corporation for the calendar year 20X2. Among other items related to the audit, Green is being sued for personal injury resulting from the malfunction of one of its products. Sue Ewe filed the lawsuit 8 years earlier in September 20W4. The officers of the company and its outside legal counsel estimate that the loss from the suit will be approximately $250,000. This amount has been accrued and properly disclosed in the footnotes of the financial statements. You have no reason to believe that the estimate is wrong. You completed your audit and dated your report March 2, 20X3. The financial statements were issued on March 14, 20X3. The trial was in progress at that date. On March 20, 20X3, you read in a national business periodical that the jury in the trial awarded Sue Ewe $1.5 million.
Required:
Discuss the nature of these events and what responsibility the auditor has, if any, regarding the news of March 20.

Accepted Answer

The auditor has no responsibility with r

Question 20

In the current CAS 700 audit report, the description of an auditor's responsibilities and the work performed is covered in ________.

Accepted Answer

A)  three paragraphs 
B)  half a paragraph 
C)  one paragraph 
D)  two paragraphs 
A)  three paragraphs 
B)  half a paragraph 
C)  one paragraph 
D)  two paragraphs

Known misstatements ________.

Auditors consider materiality at each of the following stages of an audit EXCEPT ________.

________ paragraphs refer only to information presented or disclosed in the financial statements.

When should an independence letter be received?

What is an Other Matter (OM) paragraph? A.

What are the three categories of uncorrected misstatements?

A reply to a lawyer's letters should be issued ________.

Emphasis of Matter paragraphs refer only to information presented or disclosed in the financial statements.

The auditor actively seeks audit evidence up to the date of the audit report. After that date, the auditor does not seek new evidence.

Auditors have a responsibility to perform audit procedures ________.

Further possible misstatements ________.

Likely misstatements are those that probably exist, based on audit evidence examined.

Which of the following statements about forming an audit opinion is FALSE?

Dual dating is used to cut off the subsequent event procedural responsibility at the earlier date.

The auditor must decide if any uncorrected misstatements are material individually but not in aggregate.

Auditors typically do not keep track of the differences between management estimates and the most reasonable estimates supported by audit evidence.

List the most important matters arising from the audit of financial statements that should be communicated to the audit committee.

CAS 200 provides a framework for the key principles that guide the conduct of a financial statement audit in accordance with generally accepted auditing standards. It defines all of the following with respect to Canadian Auditing Standards EXCEPT their ________.

In the current CAS 700 audit report, the description of an auditor's responsibilities and the work performed is covered in ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

Completing the Audit Work

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

Part I the Audit of Accounting Estimates: Basic Material Relating to Accountingestimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud

Filters

Exam 16: Applying Professional Judgment to Form the Audit Opinion and Issue Theaudit Report

Known misstatements ________.

Auditors consider materiality at each of the following stages of an audit EXCEPT ________.

________ paragraphs refer only to information presented or disclosed in the financial statements.

When should an independence letter be received?

What is an Other Matter (OM) paragraph? A.

What are the three categories of uncorrected misstatements?

A reply to a lawyer's letters should be issued ________.

Emphasis of Matter paragraphs refer only to information presented or disclosed in the financial statements.

The auditor actively seeks audit evidence up to the date of the audit report. After that date, the auditor does not seek new evidence.

Auditors have a responsibility to perform audit procedures ________.

Further possible misstatements ________.

Likely misstatements are those that probably exist, based on audit evidence examined.

Which of the following statements about forming an audit opinion is FALSE?

Dual dating is used to cut off the subsequent event procedural responsibility at the earlier date.

The auditor must decide if any uncorrected misstatements are material individually but not in aggregate.

Auditors typically do not keep track of the differences between management estimates and the most reasonable estimates supported by audit evidence.

List the most important matters arising from the audit of financial statements that should be communicated to the audit committee.

CAS 200 provides a framework for the key principles that guide the conduct of a financial statement audit in accordance with generally accepted auditing standards. It defines all of the following with respect to Canadian Auditing Standards EXCEPT their ________.

In the current CAS 700 audit report, the description of an auditor's responsibilities and the work performed is covered in ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

Completing the Audit Work

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

Part I the Audit of Accounting Estimates: Basic Material Relating to Accountingestimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud

Filters