Exam 1: Introduction and Review of Audit and Assurance

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

An example of an unmodified audit opinion is

The sources of demand for audit and assurance services does not include

The largest accounting firms in Canada are known collectively as the

The nature of audit procedures refers to the reliance on evidence provided by the client and its management.

An operational audit is an example of a compliance audit.

The expectation gap can be reduced by

Based on the evidence gathered, if an auditor concludes all noted misstatements in the financial statements to be immaterial, individually and collectively, then the auditor would

A limitation of an audit is caused by

The top tier of accounting firms is comprised of

Outline the reasons for the demand for assurance services.

For a financial report to be reliable, it must

Insurance hypothesis tells us that

For a financial report to be relevant, it must

Insurance hypothesis is a means whereby the investor can guarantee the success of their investment.

An audit is one way for investors to insure against at least part of their loss should the company they invest in fail - this is an example of

Auditors of reporting issuers are required to be a member in good standing with

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

Indicate whether you agree or disagree with the following statements and explain your reasoning. a) Maurice Lecuyer feels that an internal auditor that reports to the chief financial officer of the company can be as independent as an auditor that reports to the audit committee. b) Jillian Humphrey discovered a very material overstatement in the financial statements of Humphrey's Holistic Medicine. She felt that the misstatement would have an impact on the decisions of users of the financial statements, and indicated to her audit senior that she would be including it as an "emphasis of matter" paragraph in the audit report. c) An auditor is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. d) An assurance engagement involves evaluation or measurement of subject matter against criteria.

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