Question 1

The expectation gap can be reduced by:

Accepted Answer

A)  auditors performing their duties properly 
B)  enhanced reporting to explain what processes have been followed in arriving at an audit or a review opinion 
C)  assurance providers reporting accurately the level of assurance being provided 
D)  all of the above. 
A)  auditors performing their duties properly 
B)  enhanced reporting to explain what processes have been followed in arriving at an audit or a review opinion 
C)  assurance providers reporting accurately the level of assurance being provided 
D)  all of the above. D

Question 2

Outline the reasons for the demand for assurance services.

Accepted Answer

Remoteness - As most users do not have access to the entity under review, this makes it difficult to determine whether the information contained in the report is a fair presentation of the entity and its activities for the relevant period.
Complexity - Most financial statement users do not have the accounting and legal knowledge to enable them to assess the complex accounting and disclosure choices being made by the entity.
Competing incentives - Management may have their own incentives to present the information in a particular light which may help them achieve their own objectives. This may introduce bias in what is being presented.
Reliability - As the information is being depended upon to make important decisions, it is important that the information being presented is reliable

Question 3

An example of an unmodified audit opinion is:

Accepted Answer

A)  qualified audit opinion 
B)  adverse audit opinion 
C)  unqualified audit opinion with an emphasis of matter. 
D)  none of the above. 
A)  qualified audit opinion 
B)  adverse audit opinion 
C)  unqualified audit opinion with an emphasis of matter. 
D)  none of the above. C

Question 4

A negative expression of opinion is only given when there is a disagreement with management and the auditor.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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

Accepted Answer

A compliance audit involves gathering ev

Question 7

The most common typof assurance engagements are financial statement audits, confirmation audits, performance audits, comprehensive audits and assurance on corporate social responsibility (CSR) disclosures.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not a type of opinion?

Accepted Answer

A)  qualified opinion 
B)  modified opinion 
C)  adverse opinion 
D)  disclaimer of opinion 
A)  qualified opinion 
B)  modified opinion 
C)  adverse opinion 
D)  disclaimer of opinion

Question 9

Michael Stiller performed work for a client in the real estate business and issued a Notice to Reader. What degree of assurance doa Notice to Reader provide to the user of the statements?

Accepted Answer

A)  reasonable assurance 
B)  moderate assurance 
C)  no assurance 
D)  none of the above 
A)  reasonable assurance 
B)  moderate assurance 
C)  no assurance 
D)  none of the above

Question 10

An operational audit is an example of a compliance audit.

Accepted Answer

A) True 
 B)False

Question 11

Martha Minnati was reviewing the previous year's audited financial statements of a clothing manufacturer. Her manager explained to her that for a financial statement audit, the clothing company was the accountable party, its shareholders were the users, and the subject matter was the financial statements. What kind of audit engagement was her manager describing

Accepted Answer

A)  consulting engagement 
B)  assurance engagement 
C)  review engagement 
D)  compliance engagement 
A)  consulting engagement 
B)  assurance engagement 
C)  review engagement 
D)  compliance engagement

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

An example of the three partiin 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 15

Which of the following is NOT true about Corporate Social Responsibility assurance?

Accepted Answer

A)  reporting is voluntary and is becoming more widespread. 
B)  includes both financial and non-financial information. 
C)  is required to be performed by an auditor. 
D)  disclosures include environmental, employee and social reporting. 
A)  reporting is voluntary and is becoming more widespread. 
B)  includes both financial and non-financial information. 
C)  is required to be performed by an auditor. 
D)  disclosures include environmental, employee and social reporting.

Question 16

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 17

Larry Dibitonto is a partner in his firm and runs management consulting, mergers and acquisitions, insolvency, tax, and accounting services. How are these servicreferred 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 18

Indicate whether you agree or disagree with the following statements and explain your reasoning.
a) Rejean Tremblay 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) Angela Pelletier discovered a very material overstatement in the financial statements of McKenzie Growth. 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.

Accepted Answer

a) Disagree. The internal auditor's inde

Question 19

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

Accepted Answer

'Pervasive' refers to misstatements that

Question 20

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

The expectation gap can be reduced by:

Outline the reasons for the demand for assurance services.

An example of an unmodified audit opinion is:

A negative expression of opinion is only given when there is a disagreement with management and the auditor.

A limitation of an audit is caused by:

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

The most common typof assurance engagements are financial statement audits, confirmation audits, performance audits, comprehensive audits and assurance on corporate social responsibility (CSR) disclosures.

Which of the following is not a type of opinion?

Michael Stiller performed work for a client in the real estate business and issued a Notice to Reader. What degree of assurance doa Notice to Reader provide to the user of the statements?

An operational audit is an example of a compliance audit.

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

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

An example of the three partiin an assurance engagement would be:

Which of the following is NOT true about Corporate Social Responsibility assurance?

The largest accounting firms in Canada are known collectively as the

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

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

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

Understanding and Testing the Clients System of Internal Controls

Execution of the Audit Performing Substantive Procedur

Auditing Saland Receivabl

Auditing Purchases, Payabland Payroll

Auditing Inventoriand PPE

Auditing Cash and Investments

Completing and Reporting on the Audit

Filters

Exam 1: Introduction and Review of Audit and Assurance

The expectation gap can be reduced by:

Outline the reasons for the demand for assurance services.

An example of an unmodified audit opinion is:

A negative expression of opinion is only given when there is a disagreement with management and the auditor.

A limitation of an audit is caused by:

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

The most common typof assurance engagements are financial statement audits, confirmation audits, performance audits, comprehensive audits and assurance on corporate social responsibility (CSR) disclosures.

Which of the following is not a type of opinion?

Michael Stiller performed work for a client in the real estate business and issued a Notice to Reader. What degree of assurance doa Notice to Reader provide to the user of the statements?

An operational audit is an example of a compliance audit.

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

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

An example of the three partiin an assurance engagement would be:

Which of the following is NOT true about Corporate Social Responsibility assurance?

The largest accounting firms in Canada are known collectively as the

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

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

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

Understanding and Testing the Clients System of Internal Controls

Execution of the Audit Performing Substantive Procedur

Auditing Saland Receivabl

Auditing Purchases, Payabland Payroll

Auditing Inventoriand PPE

Auditing Cash and Investments

Completing and Reporting on the Audit

Filters