Question 1

Professional scepticism does not involve:

Accepted Answer

A)  the professional requirement that all management representations be substantiated with supporting documentation. 
B)  seeking independent evidence to corroborate information provided by their client 
C)  being suspicious when evidence contradicts documents held by their client or enquiries made of client personnel 
D)  none of the above. 
A)  the professional requirement that all management representations be substantiated with supporting documentation. 
B)  seeking independent evidence to corroborate information provided by their client 
C)  being suspicious when evidence contradicts documents held by their client or enquiries made of client personnel 
D)  none of the above.

Question 2

Describe the three levels of assurance. Name the types of engagements they would come up in and the expression of opinions that would be provided by the assurance provider

Accepted Answer

Level of Assurance
Type of Eng

Question 3

The expectation gap is caused by:

Accepted Answer

A)  realistic auditor expectations 
B)  unrealistic user expectations 
C)  realistic user expectations 
D)  unrealistic auditor expectations 
A)  realistic auditor expectations 
B)  unrealistic user expectations 
C)  realistic user expectations 
D)  unrealistic auditor expectations

Question 4

An example of the three parties in an assurance engagement would be:

Accepted Answer

A)  audit client, employee, customer 
B)  audit client, supplier, auditor 
C)  auditor, shareholder, general public 
D)  auditor, general public, employees. 
A)  audit client, employee, customer 
B)  audit client, supplier, auditor 
C)  auditor, shareholder, general public 
D)  auditor, general public, employees.

Question 5

An operational audit is an example of a compliance audit.

Accepted Answer

A) True 
 B)False

Question 6

The main assurance service the general public are familiar with are financial statement audits. Briefly describe the other services that an auditor can provide.

Accepted Answer

A compliance audit involves gathering ev

Question 7

It is the auditor's responsibility to prepare the financial statements.

Accepted Answer

A) True 
 B)False

Question 8

While awaiting a meeting in his firm's boardroom, the senior partner, Bill Goldsworthy, read the following statement in an article in the Globe & Mail: "The greater the perceived
Quality of the information contained in the financial statements, the more likely it will be relied
Upon by the users of that information." This statement best describes

Accepted Answer

A)  the expectations gap 
B)  agency theory 
C)  information hypothesis 
D)  insurance hypothesis 
A)  the expectations gap 
B)  agency theory 
C)  information hypothesis 
D)  insurance hypothesis

Question 9

What does pervasive mean? When would an auditor use an audit report that was material and pervasive?

Accepted Answer

'Pervasive' refers to misstatements that

Question 10

Larry Dibitonto is a partner in his firm and runs management consulting, mergers and acquisitions, insolvency, tax, and accounting services. How are these services referred to
Collectively?

Accepted Answer

A)  audit 
B)  non-assurance services 
C)  reviews 
D)  none of the above 
A)  audit 
B)  non-assurance services 
C)  reviews 
D)  none of the above

Question 11

Mary Logan was careful to undertake her audits in a most responsible manner. Her audit manager complimented her on her diligence and how well she documented her work at the
Different stages of the audit process. Which element of responsibility did she display?

Accepted Answer

A)  due care 
B)  professional judgment 
C)  professional scepticism 
D)  none of these 
A)  due care 
B)  professional judgment 
C)  professional scepticism 
D)  none of these

Question 12

The largest accounting firms in Canada are known collectively as the

Accepted Answer

A)  'Big-3' 
B)  'Big-4' 
C)  'Big-5' 
D)  'Big-6' 
A)  'Big-3' 
B)  'Big-4' 
C)  'Big-5' 
D)  'Big-6'

Question 13

The expectation gap is caused by unrealistic user expectations such as the auditor providing a moderate level of assurance.

Accepted Answer

A) True 
 B)False

Question 14

Theodore Heinrich prepared a set of financial statements based on information provided to him. He checked mathematical accuracy of the data, and the client complimented him on the reasonable cost of the work he performed. Theodore performed

Accepted Answer

A)  a compilation 
B)  a review 
C)  an audit 
D)  none of the above 
A)  a compilation 
B)  a review 
C)  an audit 
D)  none of the above

Question 15

A limitation of an audit is caused by:

Accepted Answer

A)  the nature of financial reporting 
B)  the nature of audit procedures 
C)  the need for the audit to be conducted within a reasonable period of time and at a reasonable cost 
D)  all of the above. 
A)  the nature of financial reporting 
B)  the nature of audit procedures 
C)  the need for the audit to be conducted within a reasonable period of time and at a reasonable cost 
D)  all of the above.

Question 16

A reasonable level of assurance is the highest level of assurance that an auditor can provide.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following would be an example of a reasonable assurance engagement?

Accepted Answer

A)  the review of annual financial statements. 
B)  the audit of annual financial statements. 
C)  the reporting of procedures performed by the auditor as agreed by the client. 
D)  all of the above. 
A)  the review of annual financial statements. 
B)  the audit of annual financial statements. 
C)  the reporting of procedures performed by the auditor as agreed by the client. 
D)  all of the above.

Question 18

As users of the financial statements, suppliers would least consider which of the following aspects of the financial statements:

Accepted Answer

A)  solvency of the entity 
B)  profitability of the entity 
C)  return on investment of the entity 
D)  corporate social responsibility of the entity 
A)  solvency of the entity 
B)  profitability of the entity 
C)  return on investment of the entity 
D)  corporate social responsibility of the entity

Question 19

In a review engagement, which of the following is least likely to occur during the engagement?

Accepted Answer

A)  analytical procedures 
B)  enquiries with management and other personnel 
C)  substantive audit procedures 
D)  review of the internal controls of the entity. 
A)  analytical procedures 
B)  enquiries with management and other personnel 
C)  substantive audit procedures 
D)  review of the internal controls of the entity.

Question 20

Insurance hypothesis tells us that:

Accepted Answer

A)  investors will demand that financial statements be audited as a way of insuring against some of their loss should their investment fail. 
B)  investors can insure themselves against loss by investing in a diverse investment portfolio should an individual investment fail. 
C)  investors cannot insure themselves against loss when investing in an entity. 
D)  the entity can take out insurance to protect itself from such risks as employee or management fraud which can lead to material misstatements in the financial statements. 
A)  investors will demand that financial statements be audited as a way of insuring against some of their loss should their investment fail. 
B)  investors can insure themselves against loss by investing in a diverse investment portfolio should an individual investment fail. 
C)  investors cannot insure themselves against loss when investing in an entity. 
D)  the entity can take out insurance to protect itself from such risks as employee or management fraud which can lead to material misstatements in the financial statements.

Professional scepticism does not involve:

Describe the three levels of assurance. Name the types of engagements they would come up in and the expression of opinions that would be provided by the assurance provider

The expectation gap is caused by:

An example of the three parties in an assurance engagement would be:

An operational audit is an example of a compliance audit.

The main assurance service the general public are familiar with are financial statement audits. Briefly describe the other services that an auditor can provide.

It is the auditor's responsibility to prepare the financial statements.

What does pervasive mean? When would an auditor use an audit report that was material and pervasive?

Larry Dibitonto is a partner in his firm and runs management consulting, mergers and acquisitions, insolvency, tax, and accounting services. How are these services referred to Collectively?

Mary Logan was careful to undertake her audits in a most responsible manner. Her audit manager complimented her on her diligence and how well she documented her work at the Different stages of the audit process. Which element of responsibility did she display?

The largest accounting firms in Canada are known collectively as the

The expectation gap is caused by unrealistic user expectations such as the auditor providing a moderate level of assurance.

Theodore Heinrich prepared a set of financial statements based on information provided to him. He checked mathematical accuracy of the data, and the client complimented him on the reasonable cost of the work he performed. Theodore performed

A limitation of an audit is caused by:

A reasonable level of assurance is the highest level of assurance that an auditor can provide.

Which of the following would be an example of a reasonable assurance engagement?

As users of the financial statements, suppliers would least consider which of the following aspects of the financial statements:

In a review engagement, which of the following is least likely to occur during the engagement?

Insurance hypothesis tells us that:

Ethics, Legal Liability and Client Acceptance

Audit Planning I

Audit Planning II

Audit Evidence

Sampling and Overview of the Risk Response Phase of the Audit

Gaining an Understanding of the Clients System of Internal Controls

Execution of the Audittesting of Controls

Execution of the Auditperforming Substantive Procedures

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Completing and Reporting on the Audit

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Exam 1: Introduction and Overview of Audit and Assurance

Professional scepticism does not involve:

Describe the three levels of assurance. Name the types of engagements they would come up in and the expression of opinions that would be provided by the assurance provider

The expectation gap is caused by:

An example of the three parties in an assurance engagement would be:

An operational audit is an example of a compliance audit.

The main assurance service the general public are familiar with are financial statement audits. Briefly describe the other services that an auditor can provide.

It is the auditor's responsibility to prepare the financial statements.

What does pervasive mean? When would an auditor use an audit report that was material and pervasive?

Larry Dibitonto is a partner in his firm and runs management consulting, mergers and acquisitions, insolvency, tax, and accounting services. How are these services referred to Collectively?

Mary Logan was careful to undertake her audits in a most responsible manner. Her audit manager complimented her on her diligence and how well she documented her work at the Different stages of the audit process. Which element of responsibility did she display?

The largest accounting firms in Canada are known collectively as the

The expectation gap is caused by unrealistic user expectations such as the auditor providing a moderate level of assurance.

Theodore Heinrich prepared a set of financial statements based on information provided to him. He checked mathematical accuracy of the data, and the client complimented him on the reasonable cost of the work he performed. Theodore performed

A limitation of an audit is caused by:

A reasonable level of assurance is the highest level of assurance that an auditor can provide.

Which of the following would be an example of a reasonable assurance engagement?

As users of the financial statements, suppliers would least consider which of the following aspects of the financial statements:

In a review engagement, which of the following is least likely to occur during the engagement?

Insurance hypothesis tells us that:

Ethics, Legal Liability and Client Acceptance

Audit Planning I

Audit Planning II

Audit Evidence

Sampling and Overview of the Risk Response Phase of the Audit

Gaining an Understanding of the Clients System of Internal Controls

Execution of the Audittesting of Controls

Execution of the Auditperforming Substantive Procedures

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Completing and Reporting on the Audit

Filters