Question 1

Management can override controls by

Accepted Answer

A) recording fictitious journal entries (particularly at year end) 
B) appropriately changing assumptions and methods used to estimate account balances 
C) omitting,advancing,or delaying modification of events that occurred during the reporting period 
D) failing to disclose facts that could affect the amounts recorded in the financial statements 
E) engaging in complex transactions designed to represent the financial condition of the company
F)both A and C
G)both A and D
H)both B and D 
A) recording fictitious journal entries (particularly at year end) 
B) appropriately changing assumptions and methods used to estimate account balances 
C) omitting,advancing,or delaying modification of events that occurred during the reporting period 
D) failing to disclose facts that could affect the amounts recorded in the financial statements 
E) engaging in complex transactions designed to represent the financial condition of the company
F)both A and C
G)both A and D
H)both B and D G

Question 2

Management can override controls by

Accepted Answer

A) recording fictitious journal entries (particularly at year end) 
B) appropriately changing assumptions and methods used to estimate account balances 
C) omitting,advancing,or delaying recognition of events that occurred during the reporting period 
D) disclosing facts that could affect the amounts recorded in the financial statements 
E) engaging in complex transactions designed to represent the financial condition of the company
F)both A and B
G)both A and C
H)both D and E 
A) recording fictitious journal entries (particularly at year end) 
B) appropriately changing assumptions and methods used to estimate account balances 
C) omitting,advancing,or delaying recognition of events that occurred during the reporting period 
D) disclosing facts that could affect the amounts recorded in the financial statements 
E) engaging in complex transactions designed to represent the financial condition of the company
F)both A and B
G)both A and C
H)both D and E G

Question 3

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

Accepted Answer

A) who performed the work 
B) the date the work was started 
C) who reviewed the work 
D) the results of the review 
E) the results of the risk assessment
F)both A and C
G)both B and D
H)both A and E 
A) who performed the work 
B) the date the work was started 
C) who reviewed the work 
D) the results of the review 
E) the results of the risk assessment
F)both A and C
G)both B and D
H)both A and E F

Question 4

The auditor gathers evidence during the audit process to reduce audit risk to an acceptably low level.a.List the types of tests the auditor can apply in the audit and discuss the questions the auditor can answer with each type of test.b.Describe how the various tests are combined in the audit process to determine whether the financial statements are materially misstated.

Accepted Answer

The answer of The auditor gathers evidence during the audit...

Question 5

An estimation transaction involves

Accepted Answer

A) a decision by management to estimate an incurred cost 
B) a decision by management to estimate a future price 
C) a decision by management to estimate a future amount 
D) a decision by management to estimate a future profit 
A) a decision by management to estimate an incurred cost 
B) a decision by management to estimate a future price 
C) a decision by management to estimate a future amount 
D) a decision by management to estimate a future profit

Question 6

The fraud discussion may include the following elements

Accepted Answer

A) a discussion of management's involvement in supervising employees with access to cash or other assets susceptible to misappropriation 
B) a consideration of unusual or unexplained changes in the behavior or lifestyle of employees that have come to the attention of the auditor 
C) a consideration of the types of evidence that might indicate the possibility of fraud 
D) a discussion of how an element of predictability will be built into the nature,timing,and extent of audit procedures 
E) a discussion of any allegations of fraud that have come to the attention of management
F)both A and B
G)both C and D
H)both C and E 
A) a discussion of management's involvement in supervising employees with access to cash or other assets susceptible to misappropriation 
B) a consideration of unusual or unexplained changes in the behavior or lifestyle of employees that have come to the attention of the auditor 
C) a consideration of the types of evidence that might indicate the possibility of fraud 
D) a discussion of how an element of predictability will be built into the nature,timing,and extent of audit procedures 
E) a discussion of any allegations of fraud that have come to the attention of management
F)both A and B
G)both C and D
H)both C and E

Question 7

What is a "round-trip" transaction?

Accepted Answer

A company provides its customers with fu

Question 8

Fraudulent journal entries often have unique characteristics.These include

Accepted Answer

A) the use of an unrelated,unusual,or seldom used method in the entry 
B) an entry made by an individual who does not normally make journal entries 
C) an entry recorded at the end of a time period or as a post closing entry with a good explanation of the reason for the adjustment 
D) no account numbers are associated with the entry 
E) the journal entry contains no round numbers nor numbers with consistent ending digits
F)both A and C
G)both B and D
H)both C and E 
A) the use of an unrelated,unusual,or seldom used method in the entry 
B) an entry made by an individual who does not normally make journal entries 
C) an entry recorded at the end of a time period or as a post closing entry with a good explanation of the reason for the adjustment 
D) no account numbers are associated with the entry 
E) the journal entry contains no round numbers nor numbers with consistent ending digits
F)both A and C
G)both B and D
H)both C and E

Question 9

The fraud discussion may include the following elements

Accepted Answer

A) a discussion of management's involvement in supervising employees with access to cash or other assets susceptible to misappropriation 
B) a consideration of unusual or unexplained changes in the behavior or lifestyle of employees that have come to the attention of management 
C) a consideration of the types of evidence that might indicate the possibility of fraud 
D) a discussion of how an element of predictability will be built into the nature,timing,and extent of audit procedures 
E) a discussion of any allegations of fraud that have come to the attention of the auditor
F)both A and B
G)both B and C
H)Both A and E 
A) a discussion of management's involvement in supervising employees with access to cash or other assets susceptible to misappropriation 
B) a consideration of unusual or unexplained changes in the behavior or lifestyle of employees that have come to the attention of management 
C) a consideration of the types of evidence that might indicate the possibility of fraud 
D) a discussion of how an element of predictability will be built into the nature,timing,and extent of audit procedures 
E) a discussion of any allegations of fraud that have come to the attention of the auditor
F)both A and B
G)both B and C
H)Both A and E

Question 10

The fraud discussion may include the following elements

Accepted Answer

A) a discussion of auditor's involvement in supervising employees with access to cash or other assets susceptible to misappropriation 
B) a consideration of unusual or unexplained changes in the behavior or lifestyle of employees that have come to the attention of management 
C) a consideration of the types of circumstances that might indicate the possibility of fraud 
D) a discussion of how an element of unpredictability will be built into the nature,timing,and extent of audit procedures 
E) a discussion of any allegations of fraud that have come to the attention of management
F)both A and B
G)both C and D
H)both C and E 
A) a discussion of auditor's involvement in supervising employees with access to cash or other assets susceptible to misappropriation 
B) a consideration of unusual or unexplained changes in the behavior or lifestyle of employees that have come to the attention of management 
C) a consideration of the types of circumstances that might indicate the possibility of fraud 
D) a discussion of how an element of unpredictability will be built into the nature,timing,and extent of audit procedures 
E) a discussion of any allegations of fraud that have come to the attention of management
F)both A and B
G)both C and D
H)both C and E

Question 11

The auditor performs analytical procedures to identify changes in the financial statements in the current year compared to the prior year that are

Accepted Answer

A) inconsistent with the expectations of management 
B) inconsistent with other information known to the auditor 
C) represent larger fluctuations than the auditor might expect 
D) consistent with the prior year 
E) inconsistent with the footnotes on subsequent events
F)both A and B
G)both B and C 
A) inconsistent with the expectations of management 
B) inconsistent with other information known to the auditor 
C) represent larger fluctuations than the auditor might expect 
D) consistent with the prior year 
E) inconsistent with the footnotes on subsequent events
F)both A and B
G)both B and C

Question 12

The management of a company has a unique ability to perpetrate fraud because

Accepted Answer

A) management has authority to develop internal controls 
B) management has authority over employees 
C) internal controls do not guarantee that a fraud will not occur 
D) management often has the ability to override internal controls 
A) management has authority to develop internal controls 
B) management has authority over employees 
C) internal controls do not guarantee that a fraud will not occur 
D) management often has the ability to override internal controls

Question 13

Audit documentation

Accepted Answer

A) is referred to as an electronic file 
B) includes a record of the audit procedures attempted 
C) includes a record of the audit evidence obtained 
D) includes a record of the conclusions reached by the auditor from a review of the evidence 
E) may not be recorded on paper
F)both A and B
G)both C and D 
A) is referred to as an electronic file 
B) includes a record of the audit procedures attempted 
C) includes a record of the audit evidence obtained 
D) includes a record of the conclusions reached by the auditor from a review of the evidence 
E) may not be recorded on paper
F)both A and B
G)both C and D

Question 14

The auditor should complete the assembly of the final audit file within 45 days of the report release date (60 days for private companies).After the 45/60 day time period

Accepted Answer

A) the auditor should not delete or discard any information from the file 
B) new information can be added if necessary if accompanied by management's explanation for the addition 
C) new information can be added if necessary if accompanied by the reissuance of the audit report 
D) new information can be added if necessary if accompanied by the effect of the new information on the auditor's conclusions 
E) new information can be added if necessary if the information was inadvertently omitted during the course of the audit
F)both A and B
G)both A and D 
A) the auditor should not delete or discard any information from the file 
B) new information can be added if necessary if accompanied by management's explanation for the addition 
C) new information can be added if necessary if accompanied by the reissuance of the audit report 
D) new information can be added if necessary if accompanied by the effect of the new information on the auditor's conclusions 
E) new information can be added if necessary if the information was inadvertently omitted during the course of the audit
F)both A and B
G)both A and D

Question 15

Audit documentation

Accepted Answer

A) is referred to as working papers or workpapers 
B) includes a record of the audit procedures the auditor might choose to perform 
C) includes a record of the audit evidence obtained 
D) includes a record of the assumptions reached by the auditor from a review of the evidence 
E) may not be recorded on paper
F)Both A and B
G)Both A and C 
A) is referred to as working papers or workpapers 
B) includes a record of the audit procedures the auditor might choose to perform 
C) includes a record of the audit evidence obtained 
D) includes a record of the assumptions reached by the auditor from a review of the evidence 
E) may not be recorded on paper
F)Both A and B
G)Both A and C

Question 16

Professional skepticism is

Accepted Answer

A) a method of asking questions 
B) an attitude or state of mind 
C) a distrust of verbal explanations 
D) a resolve to obtain the best evidence 
A) a method of asking questions 
B) an attitude or state of mind 
C) a distrust of verbal explanations 
D) a resolve to obtain the best evidence

Question 17

The condition,pressure to commit fraud,is present when

Accepted Answer

A) An individual believes that he is underpaid 
B) An individual believes that the company has plenty of money 
C) An individual believes that the company does not deal with customers fairly 
D) An individual believes that internal controls can be overridden 
E) Analyst's forecasts indicate that a company's earnings will increase at a rate higher than the company can achieve 
A) An individual believes that he is underpaid 
B) An individual believes that the company has plenty of money 
C) An individual believes that the company does not deal with customers fairly 
D) An individual believes that internal controls can be overridden 
E) Analyst's forecasts indicate that a company's earnings will increase at a rate higher than the company can achieve

Question 18

Which of the following are audit procedures used by the auditor to gather evidence?

Accepted Answer

A) anecdotal procedures 
B) inspection 
C) analysis 
D) inquiry 
E) communication
F)both A and C
G)both B and D 
A) anecdotal procedures 
B) inspection 
C) analysis 
D) inquiry 
E) communication
F)both A and C
G)both B and D

Question 19

Audit documentation

Accepted Answer

A) is referred to as an electronic file 
B) includes a record of the audit procedures performed 
C) includes a record of the audit file obtained 
D) includes a record of the assumptions reached by the auditor from a review of the evidence 
E) may be recorded on paper or in electronic form
F)both A and C
G)both B and E 
A) is referred to as an electronic file 
B) includes a record of the audit procedures performed 
C) includes a record of the audit file obtained 
D) includes a record of the assumptions reached by the auditor from a review of the evidence 
E) may be recorded on paper or in electronic form
F)both A and C
G)both B and E

Question 20

Which of the following is a type of analytical procedure?

Accepted Answer

A) scanning 
B) observation 
C) inquiry 
D) reperformance 
A) scanning 
B) observation 
C) inquiry 
D) reperformance

Management can override controls by

Management can override controls by

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

An estimation transaction involves

The fraud discussion may include the following elements

What is a "round-trip" transaction?

Fraudulent journal entries often have unique characteristics.These include

The fraud discussion may include the following elements

The fraud discussion may include the following elements

The auditor performs analytical procedures to identify changes in the financial statements in the current year compared to the prior year that are

The management of a company has a unique ability to perpetrate fraud because

Audit documentation

The auditor should complete the assembly of the final audit file within 45 days of the report release date (60 days for private companies).After the 45/60 day time period

Audit documentation

Professional skepticism is

The condition,pressure to commit fraud,is present when

Which of the following are audit procedures used by the auditor to gather evidence?

Audit documentation

Which of the following is a type of analytical procedure?

What Is Auditing

The Audit Planning Process: Understanding the Risk of Material Misstatement

Internal Controls

Auditing the Revenue Business Process

Auditing the Acquisition and Expenditure Business Process

Auditing the Inventory Business Process

Audit Sampling: Tests of Internal Controls

Audit Sampling: Substantive Tests of Details

Cash and Investment Business Processes

Long-Term Debt and Owners Equity Business Process

Completing the Audit

Audit Reports

The Auditing Profession Glossary

Filters

Exam 5: Audit Evidence and the Auditors Responsibility for Fraud Detection

Management can override controls by

Management can override controls by

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

An estimation transaction involves

The fraud discussion may include the following elements

What is a "round-trip" transaction?

Fraudulent journal entries often have unique characteristics.These include

The fraud discussion may include the following elements

The fraud discussion may include the following elements

The auditor performs analytical procedures to identify changes in the financial statements in the current year compared to the prior year that are

The management of a company has a unique ability to perpetrate fraud because

Audit documentation

The auditor should complete the assembly of the final audit file within 45 days of the report release date (60 days for private companies).After the 45/60 day time period

Audit documentation

Professional skepticism is

The condition,pressure to commit fraud,is present when

Which of the following are audit procedures used by the auditor to gather evidence?

Audit documentation

Which of the following is a type of analytical procedure?

What Is Auditing

The Audit Planning Process: Understanding the Risk of Material Misstatement

Internal Controls

Auditing the Revenue Business Process

Auditing the Acquisition and Expenditure Business Process

Auditing the Inventory Business Process

Audit Sampling: Tests of Internal Controls

Audit Sampling: Substantive Tests of Details

Cash and Investment Business Processes

Long-Term Debt and Owners Equity Business Process

Completing the Audit

Audit Reports

The Auditing Profession Glossary

Filters