Question 1

In addition to contingent liabilities,a company may have another type of potential liability in the form of

Accepted Answer

A) under funded pension plans 
B) future commitments made to lease holders,suppliers of raw materials,or consolidated or non-consolidated subsidiaries 
C) over funded pension plans 
D) unfunded health care plans 
A) under funded pension plans 
B) future commitments made to lease holders,suppliers of raw materials,or consolidated or non-consolidated subsidiaries 
C) over funded pension plans 
D) unfunded health care plans

Question 2

Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

Accepted Answer

A) net asset positions 
B) negative operating cash flows 
C) ability to pay creditors on due dates 
D) change from credit to cash-on-delivery transactions with suppliers 
E) loss of key management with replacement
F)both A and E
G)both B and C
H)Both B and D 
A) net asset positions 
B) negative operating cash flows 
C) ability to pay creditors on due dates 
D) change from credit to cash-on-delivery transactions with suppliers 
E) loss of key management with replacement
F)both A and E
G)both B and C
H)Both B and D

Question 3

The auditing standards have listed several circumstances that might cause quantitatively immaterial misstatements to be judged material.These include

Accepted Answer

A) misstatements that change a loss into income 
B) the effect of the misstatement on compliance with loan covenants,contractual agreements and regulatory provisions 
C) the existence of statutory or regulatory reporting requirements that might have an impact on quantitative levels 
D) misstatements that have the effect of increasing employees' compensation 
E) the effect of misclassifying income between operating and nonrecurring
F)both A and B
G)both C and E
H)both D and E 
A) misstatements that change a loss into income 
B) the effect of the misstatement on compliance with loan covenants,contractual agreements and regulatory provisions 
C) the existence of statutory or regulatory reporting requirements that might have an impact on quantitative levels 
D) misstatements that have the effect of increasing employees' compensation 
E) the effect of misclassifying income between operating and nonrecurring
F)both A and B
G)both C and E
H)both D and E

Question 4

Financial statements are prepared with the assumption that

Accepted Answer

A) the company will continue for an indefinite period of time in the future 
B) the company will continue for a reasonable period of time in the future 
C) the company may continue for a reasonable period of time in the future 
D) the company may continue for an indefinite period of time in the future 
A) the company will continue for an indefinite period of time in the future 
B) the company will continue for a reasonable period of time in the future 
C) the company may continue for a reasonable period of time in the future 
D) the company may continue for an indefinite period of time in the future

Question 5

The FASB define related parties as

Accepted Answer

A) affiliates of the company 
B) investments accounted for using the cost method of accounting for investment securities 
C) trusts for the benefit of employees,such as,pension and profit sharing trusts that are managed by management 
D) principal debtors of the company and their immediate families 
E) employees of the company and their immediate families
F)both A and C
G)both B and D
H)both D and E 
A) affiliates of the company 
B) investments accounted for using the cost method of accounting for investment securities 
C) trusts for the benefit of employees,such as,pension and profit sharing trusts that are managed by management 
D) principal debtors of the company and their immediate families 
E) employees of the company and their immediate families
F)both A and C
G)both B and D
H)both D and E

Question 6

At the end of the audit,the auditor performs specific audit procedures and makes the final decisions in the audit process.a.Describe six specific audit procedures performed at the "end of the audit".Explain how the auditor gathers evidence related to these audit procedures and how the evidence from these procedures may affect the financial statements.b.What decisions are made at the end of an audit? How does the auditor know he is done with an audit?
c.What should the audit risk be of a finalized audit?

Accepted Answer

a.7 listed below.Students should list an

Question 7

From the auditor's point of view,the problem with related party transactions is that

Accepted Answer

A) related party transactions may not have oversight in accordance with the applicable reporting framework 
B) related party transactions may not have been classified in accordance with the applicable reporting framework 
C) related party transactions may not have been occurred in accordance with the applicable reporting framework 
D) related party transactions may not have been recorded in accordance with the applicable reporting framework 
A) related party transactions may not have oversight in accordance with the applicable reporting framework 
B) related party transactions may not have been classified in accordance with the applicable reporting framework 
C) related party transactions may not have been occurred in accordance with the applicable reporting framework 
D) related party transactions may not have been recorded in accordance with the applicable reporting framework

Question 8

The auditor should obtain sufficient appropriate evidence for material amounts and disclosures in the financial statements that are determined by laws and regulations that have a direct impact on the financial statements.Examples include

Accepted Answer

A) SEC reporting requirements for public companies 
B) FASB reporting requirements for public companies 
C) industry specific management reporting issues 
D) recording transactions under government contracts,including the amount of revenue to be accrued 
E) the accrual and recognition of income tax and pension expense
F)both A and B
G)both A and E
H)both C and D 
A) SEC reporting requirements for public companies 
B) FASB reporting requirements for public companies 
C) industry specific management reporting issues 
D) recording transactions under government contracts,including the amount of revenue to be accrued 
E) the accrual and recognition of income tax and pension expense
F)both A and B
G)both A and E
H)both C and D

Question 9

Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

Accepted Answer

A) net liability positions 
B) positive operating cash flows 
C) inability to pay creditors on due dates 
D) change from cash-on-delivery to credit transactions with suppliers 
E) loss of key management with replacement
F)both A and C
G)both B and E
H)both D and E 
A) net liability positions 
B) positive operating cash flows 
C) inability to pay creditors on due dates 
D) change from cash-on-delivery to credit transactions with suppliers 
E) loss of key management with replacement
F)both A and C
G)both B and E
H)both D and E

Question 10

Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

Accepted Answer

A) net asset positions 
B) negative operating cash flows 
C) inability to pay creditors on due dates 
D) change from cash-on-delivery to credit transactions with suppliers 
E) loss of key management with replacement
F)both A and B
G)both B and C
H)both D and E 
A) net asset positions 
B) negative operating cash flows 
C) inability to pay creditors on due dates 
D) change from cash-on-delivery to credit transactions with suppliers 
E) loss of key management with replacement
F)both A and B
G)both B and C
H)both D and E

Question 11

On the last day of fieldwork,the auditors complete their work papers and advise the client of any recommended adjustments.The audit report must be signed within 20 days of completion of field work.

Accepted Answer

A) True 
 B)False

In addition to contingent liabilities,a company may have another type of potential liability in the form of

Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

The auditing standards have listed several circumstances that might cause quantitatively immaterial misstatements to be judged material.These include

Financial statements are prepared with the assumption that

The FASB define related parties as

From the auditor's point of view,the problem with related party transactions is that

The auditor should obtain sufficient appropriate evidence for material amounts and disclosures in the financial statements that are determined by laws and regulations that have a direct impact on the financial statements.Examples include

Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

On the last day of fieldwork,the auditors complete their work papers and advise the client of any recommended adjustments.The audit report must be signed within 20 days of completion of field work.

What Is Auditing

The Audit Planning Process: Understanding the Risk of Material Misstatement

Internal Controls

Auditing the Revenue Business Process

Audit Evidence and the Auditors Responsibility for Fraud Detection

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

Audit Reports

The Auditing Profession Glossary

Filters

Exam 12: Completing the Audit

In addition to contingent liabilities,a company may have another type of potential liability in the form of

Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

The auditing standards have listed several circumstances that might cause quantitatively immaterial misstatements to be judged material.These include

Financial statements are prepared with the assumption that

The FASB define related parties as

From the auditor's point of view,the problem with related party transactions is that

The auditor should obtain sufficient appropriate evidence for material amounts and disclosures in the financial statements that are determined by laws and regulations that have a direct impact on the financial statements.Examples include

Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

On the last day of fieldwork,the auditors complete their work papers and advise the client of any recommended adjustments.The audit report must be signed within 20 days of completion of field work.

What Is Auditing

The Audit Planning Process: Understanding the Risk of Material Misstatement

Internal Controls

Auditing the Revenue Business Process

Audit Evidence and the Auditors Responsibility for Fraud Detection

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

Audit Reports

The Auditing Profession Glossary

Filters