Question 1

The audit of the year-end franchise revenue balances is normally conducted in conjunction with which related account group?

Accepted Answer

A) Fixed assets,receivables. 
B) Receivables,intangibles. 
C) Receivables,investments. 
D) Revenues,receivables. 
A) Fixed assets,receivables. 
B) Receivables,intangibles. 
C) Receivables,investments. 
D) Revenues,receivables. B

Question 2

A type of subsequent event that provides new information regarding financial conditions that existed at the date of the balance sheet requires only footnote disclosure.

Accepted Answer

A) True 
 B)False  False

Question 3

A second partner review of the audit file is mandatory on all audit engagements.

Accepted Answer

A) True 
 B)False  False

Question 4

An auditor is most likely to suspect the existence of undisclosed related parties by noticing _______.

Accepted Answer

A) large-sales transactions 
B) abnormally long collection terms for a receivable 
C) a large number of sales to numbered corporations 
D) a significant increase in sales over the prior year 
A) large-sales transactions 
B) abnormally long collection terms for a receivable 
C) a large number of sales to numbered corporations 
D) a significant increase in sales over the prior year

Question 5

Careful analysis is made of miscellaneous and other expense accounts,primarily because ________.

Accepted Answer

A) they contain a very large volume of transactions. 
B) the expenses aren't budgeted for by management. 
C) they often contain improperly classified and non-deductible amounts. 
D) they have highly material balances. 
A) they contain a very large volume of transactions. 
B) the expenses aren't budgeted for by management. 
C) they often contain improperly classified and non-deductible amounts. 
D) they have highly material balances.

Question 6

Auditors must complete phases of an audit after the balance sheet date.This subsequent period extends from the balance sheet date to the date of the ________.

Accepted Answer

A) audit report 
B) final review of the audit working papers 
C) public issuance of the financial statements 
D) delivery of the audit report to the client 
A) audit report 
B) final review of the audit working papers 
C) public issuance of the financial statements 
D) delivery of the audit report to the client

Question 7

The main procedure for identifying related party transactions is:

Accepted Answer

A) External confirmation. 
B) Management inquiry. 
C) Analytical review. 
D) Observation. 
A) External confirmation. 
B) Management inquiry. 
C) Analytical review. 
D) Observation.

Question 8

Analytical procedures used in the overall review stage of an audit generally include ________.

Accepted Answer

A) considering unusual or unexpected account balances that were not previously identified 
B) performing tests of transactions to corroborate management's financial statement assertions 
C) gathering evidence concerning account balances that have not changed from the prior year 
D) retesting control procedures that appeared to be ineffective during the assessment of control risk 
A) considering unusual or unexpected account balances that were not previously identified 
B) performing tests of transactions to corroborate management's financial statement assertions 
C) gathering evidence concerning account balances that have not changed from the prior year 
D) retesting control procedures that appeared to be ineffective during the assessment of control risk

Question 9

Which of the following representations would be made by the client in writing?

Accepted Answer

A) Losses from sales commitments. 
B) Unasserted claims and assessments. 
C) That all transactions have been recorded. 
D) Noncompliance with contractual agreements. 
A) Losses from sales commitments. 
B) Unasserted claims and assessments. 
C) That all transactions have been recorded. 
D) Noncompliance with contractual agreements.

Question 10

A major means by which an auditor obtains evidence about material contingencies is ________.

Accepted Answer

A) examining documents in the client's possession concerning contingencies 
B) enquiring and discussing them with management 
C) obtaining a response from the client's lawyer to the client's letter of enquiry 
D) reading minutes of shareholders' meeting 
A) examining documents in the client's possession concerning contingencies 
B) enquiring and discussing them with management 
C) obtaining a response from the client's lawyer to the client's letter of enquiry 
D) reading minutes of shareholders' meeting

Question 11

The impact of a subsequent event on the audit report depends on whether it is detected before or after the ________.

Accepted Answer

A) balance sheet date 
B) audit report date 
C) year-end date 
D) dual date 
A) balance sheet date 
B) audit report date 
C) year-end date 
D) dual date

Question 12

A written letter of representation from a client can provide a good defense for not performing audit procedures.

Accepted Answer

A) True 
 B)False

Question 13

An analysis of the comparative balances of minor expense accounts is often sufficient to decide whether the amounts are fairly presented.

Accepted Answer

A) True 
 B)False

Question 14

At the review stage of an audit,the application of analytical procedures is ________.

Accepted Answer

A) recommended by auditing standards 
B) not mentioned by auditing standards 
C) not useful,since detailed substantive tests have already been performed 
D) required by auditing standards 
A) recommended by auditing standards 
B) not mentioned by auditing standards 
C) not useful,since detailed substantive tests have already been performed 
D) required by auditing standards

Question 15

What is the objective of completing analytical procedures at the completion stage of the audit? How are they helpful to ensuring a quality audit?

Accepted Answer

According to CAS 520,auditors must desig

Question 16

What procedures should an auditor perform if he or she is auditing the financial statements of a company and finds out that the company has several clearing accounts?

Accepted Answer

Clearing and other miscellaneous account

Question 17

A loss on uncollectible trade accounts receivable resulting from the bankruptcy of a major customer requires financial statement disclosure only.

Accepted Answer

A) True 
 B)False

Question 18

Having identified related party transactions,the auditor should _______.

Accepted Answer

A) confirm the terms and amounts of the transactions with the related parties 
B) inform the audit committee in writing 
C) consult with a fraud specialist to consider extended procedures 
D) consider including an emphasis of matter paragraph in the audit opinion 
A) confirm the terms and amounts of the transactions with the related parties 
B) inform the audit committee in writing 
C) consult with a fraud specialist to consider extended procedures 
D) consider including an emphasis of matter paragraph in the audit opinion

Question 19

Auditors have a responsibility to perform audit procedures ________.

Accepted Answer

A) after the report date 
B) until the report date 
C) after the report issuance date 
D) after the report date for events between the report date and a later dual dated event 
A) after the report date 
B) until the report date 
C) after the report issuance date 
D) after the report date for events between the report date and a later dual dated event

Question 20

Why do auditors ask about related party transactions and where do they typically do this?

Accepted Answer

Auditors ask about involvement with rela

Exam 15: Completing the Audit Work

The audit of the year-end franchise revenue balances is normally conducted in conjunction with which related account group?

A type of subsequent event that provides new information regarding financial conditions that existed at the date of the balance sheet requires only footnote disclosure.

A second partner review of the audit file is mandatory on all audit engagements.

An auditor is most likely to suspect the existence of undisclosed related parties by noticing _______.

Careful analysis is made of miscellaneous and other expense accounts,primarily because ________.

Auditors must complete phases of an audit after the balance sheet date.This subsequent period extends from the balance sheet date to the date of the ________.

The main procedure for identifying related party transactions is:

Analytical procedures used in the overall review stage of an audit generally include ________.

Which of the following representations would be made by the client in writing?

A major means by which an auditor obtains evidence about material contingencies is ________.

The impact of a subsequent event on the audit report depends on whether it is detected before or after the ________.

A written letter of representation from a client can provide a good defense for not performing audit procedures.

An analysis of the comparative balances of minor expense accounts is often sufficient to decide whether the amounts are fairly presented.

At the review stage of an audit,the application of analytical procedures is ________.

What is the objective of completing analytical procedures at the completion stage of the audit? How are they helpful to ensuring a quality audit?

What procedures should an auditor perform if he or she is auditing the financial statements of a company and finds out that the company has several clearing accounts?

A loss on uncollectible trade accounts receivable resulting from the bankruptcy of a major customer requires financial statement disclosure only.

Having identified related party transactions,the auditor should _______.

Auditors have a responsibility to perform audit procedures ________.

Why do auditors ask about related party transactions and where do they typically do this?

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, receivables, and Receipts Process and Cash Account Balance

The Purchases, payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, including Fraud Auditing

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