Exam 8: Audit Planning and Analytical Procedures

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Rodgers CPA has requested permission to communicate with predecessor auditor in order to review certain workpapers for high risk accounts for a new audit client. The new audit clients refusal to allow this communication to occur would impact Rodgers decision concerning:

(Multiple Choice)

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Question 81

Discuss the essential activities involved in the initial planning of an audit.

(Essay)

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Question 82

Which is a liquidity activity ratio?

(Multiple Choice)

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Question 83

All known related parties must be identified and included in the auditor's permanent files related to the client.

(True/False)

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Question 84

An auditor searching for related party transactions should obtain an understanding of each subsidiary's relationship to the total entity because:

(Multiple Choice)

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Question 85

Which of the following best describes the first standard of field work?

(Multiple Choice)

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Question 86

When an auditor decides there is higher inherent risk for an account, one potential effect is that more audit evidence will be required for that account.

(True/False)

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Question 87

When a successor auditor contacts a company's previous auditor, the predecessor auditor is required to respond fully and without limit to the request for information.

(True/False)

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Question 88

Discuss several reasons why an auditor may not wish to continue a relationship with an existing audit client.

(Essay)

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Question 89

Because of the requirements of Rule 201 of the AICPA's Code of Professional Conduct which state that auditors should "undertake only those professional services that the member or the member's firm can reasonably expect to be completed with professional competence," auditors are not normally permitted to consult with, or rely on the work of, outside specialists during an audit engagement.

(True/False)

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Question 90

The auditor determines that Mathews Company occupies the 3rd floor of an office tower for which it pays no rent. The most likely explanation is:

(Multiple Choice)

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Question 91

Before accepting a new client, most CPA firms investigate the company to determine its acceptability. However, AICPA confidentiality requirements prohibit CPA firms from contacting certain parties-namely the company's attorneys and bankers-during this investigation.

(True/False)

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Question 92

There are three primary reasons for obtaining a thorough understanding of the client's industry and external environment. What are these reasons?

(Essay)

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Question 93

The auditor is likely to accumulate more evidence when the audit is for a company:

(Multiple Choice)

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Question 94

The first standard of field work, which states that the work is to be adequately planned and that assistants, if any, are to be properly supervised, recognizes that:

(Multiple Choice)

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Question 95

Showing 81 - 95 of 95

Rodgers CPA has requested permission to communicate with predecessor auditor in order to review certain workpapers for high risk accounts for a new audit client. The new audit clients refusal to allow this communication to occur would impact Rodgers decision concerning:

Discuss the essential activities involved in the initial planning of an audit.

Which is a liquidity activity ratio?

All known related parties must be identified and included in the auditor's permanent files related to the client.

An auditor searching for related party transactions should obtain an understanding of each subsidiary's relationship to the total entity because:

Which of the following best describes the first standard of field work?

When an auditor decides there is higher inherent risk for an account, one potential effect is that more audit evidence will be required for that account.

When a successor auditor contacts a company's previous auditor, the predecessor auditor is required to respond fully and without limit to the request for information.

Discuss several reasons why an auditor may not wish to continue a relationship with an existing audit client.

The auditor determines that Mathews Company occupies the 3rd floor of an office tower for which it pays no rent. The most likely explanation is:

Before accepting a new client, most CPA firms investigate the company to determine its acceptability. However, AICPA confidentiality requirements prohibit CPA firms from contacting certain parties-namely the company's attorneys and bankers-during this investigation.

There are three primary reasons for obtaining a thorough understanding of the client's industry and external environment. What are these reasons?

The auditor is likely to accumulate more evidence when the audit is for a company:

The first standard of field work, which states that the work is to be adequately planned and that assistants, if any, are to be properly supervised, recognizes that:

The Demand for Audit and Other Assurance Services

The CPA Profession

Audit Reports

Professional Ethics

Legal Liability

The CPA Profession

Audit Evidence

Materiality and Risk

Section 404 Audits of Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details and Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls and Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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