Question 1

An auditor analyzes repairs and maintenance accounts primarily to obtain evidence in support of the audit assertion that all expenditures for ________.

Accepted Answer

A) repairs and maintenance have been recorded in the proper period 
B) property and equipment have been recorded in the proper period 
C) repairs and maintenance have not been charged to capital accounts 
D) property and equipment have not been charged to expense 
A) repairs and maintenance have been recorded in the proper period 
B) property and equipment have been recorded in the proper period 
C) repairs and maintenance have not been charged to capital accounts 
D) property and equipment have not been charged to expense

Question 2

An entity's income statements were misstated due to the recording of a journal entry that involved debits and credits to an unusual combination of expense and revenue accounts.The auditor is most likely to detect this irregularity by ________.

Accepted Answer

A) tracing a sample of journal entries to the general ledger 
B) evaluating the effectiveness of the internal control system policies and procedures 
C) investigating the reconciliation of control accounts with the subsidiary records 
D) performing analytical procedures designed to disclose differences between the balances in the accounts and budgeted amounts 
A) tracing a sample of journal entries to the general ledger 
B) evaluating the effectiveness of the internal control system policies and procedures 
C) investigating the reconciliation of control accounts with the subsidiary records 
D) performing analytical procedures designed to disclose differences between the balances in the accounts and budgeted amounts

Question 3

The refusal by a client's lawyer to provide a representation about the legality of an act committed by the client is generally ________.

Accepted Answer

A) sufficient reason to issue an adverse opinion 
B) considered to be a scope limitation 
C) insufficient reason to modify the auditor's report due to the lawyer's obligation of confidentiality 
D) proper grounds to withdraw from the engagement 
A) sufficient reason to issue an adverse opinion 
B) considered to be a scope limitation 
C) insufficient reason to modify the auditor's report due to the lawyer's obligation of confidentiality 
D) proper grounds to withdraw from the engagement

Question 4

The audit of total rental revenue is normally conducted in conjunction with the audit of receivables and investments.

Accepted Answer

A) True 
 B)False

Question 5

Regarding subsequent events,when would pro-forma financial statements be the best disclosure?

Accepted Answer

This type of disclosure is best when the

Question 6

Lawyers' letters should be written ________.

Accepted Answer

A) at the interim audit 
B) anytime before the audit report date 
C) anytime before the balance sheet date 
D) at the final stages of the audit work 
A) at the interim audit 
B) anytime before the audit report date 
C) anytime before the balance sheet date 
D) at the final stages of the audit work

Question 7

What are some of the challenges an auditor may face when it comes to using lawyers' responses to audit the presentation and disclosure of contingencies?

Accepted Answer

Firstly,a devious or forgetful managemen

Question 8

The client signs the enquiry letter about claims and possible claims that is sent to the company's law firm for confirmation.

Accepted Answer

A) True 
 B)False

Question 9

What are the two types of subsequent events? What key characteristic(s)distinguish the two?

Accepted Answer

The two types are (1)subsequent events t

Question 10

The primary objective of performing analytical procedures in the final review stage of an audit is to ________.

Accepted Answer

A) obtain evidence from details tested to corroborate management assertions 
B) obtain evidence on the validity of the assessment of control risk 
C) assist the auditor in evaluating the overall financial statement presentation 
D) identify areas that represent specific risks relevant to the audit 
A) obtain evidence from details tested to corroborate management assertions 
B) obtain evidence on the validity of the assessment of control risk 
C) assist the auditor in evaluating the overall financial statement presentation 
D) identify areas that represent specific risks relevant to the audit

Question 11

What are the three key features that must be included in the management representation letter?

Accepted Answer

i.That management has fulfilled its resp

Question 12

Procedures for the audit of sales commission are generally coordinated with which of the following audit programs?

Accepted Answer

A) Receivables. 
B) Payroll. 
C) Fixed assets and liabilities. 
D) Investments and intangibles. 
A) Receivables. 
B) Payroll. 
C) Fixed assets and liabilities. 
D) Investments and intangibles.

Question 13

Auditors draft the letter of representation that will be prepared on company letterhead and signed by the officers of the company.

Accepted Answer

A) True 
 B)False

Question 14

A second-partner review of the working papers and financial statements is performed to ensure that the ________.

Accepted Answer

A) to-do lists are reviewed and cleared 
B) audit program procedures are signed off as evidence of completion 
C) tick-mark notations are cleared 
D) audit work meets the quality standards of the firm 
A) to-do lists are reviewed and cleared 
B) audit program procedures are signed off as evidence of completion 
C) tick-mark notations are cleared 
D) audit work meets the quality standards of the firm

Question 15

Analytical procedures are used at the conclusion phase of the audit,as an overall evaluation of the financial statements.

Accepted Answer

A) True 
 B)False

Question 16

Toward the end of an audit,it is not necessary that external auditors consider the revenue and expense accounts that were not audited in connection with balance sheet accounts.

Accepted Answer

A) True 
 B)False

Question 17

Procedures for the audit of warranty expense are generally coordinated with which of the following audit programs?

Accepted Answer

A) Inventory and liabilities. 
B) Inventory,sales,and repairs and maintenance. 
C) Investments and intangibles. 
D) Sales,inventory,and interest expense. 
A) Inventory and liabilities. 
B) Inventory,sales,and repairs and maintenance. 
C) Investments and intangibles. 
D) Sales,inventory,and interest expense.

Question 18

In the audit of revenue and expense accounts,a number of accounts will have been audited in connection with related balance sheet accounts.For each of the revenue and expense accounts listed in column A,indicate the related balance sheet account(s).If no account is specifically related,indicate if the account should be analyzed in detail or simply compared to the balance in the previous year.

Accepted Answer

The answer of In the audit of revenue and expense...

Question 19

Which of the following situations does NOT illustrate a subsequent event that requires adjustment to the financial statement numbers?

Accepted Answer

A) A lawsuit against the auditee that had been ongoing for months is finally concluded: the amount awarded is substantially more than had been estimated. 
B) The inventory that was on hand at the balance sheet was sold soon sold after the balance sheet date for a price below its carrying value. 
C) A customer who had long been suspected of being in financial difficulty,declares bankruptcy.Based on the filing,amounts previously thought to be collectible will never be recovered. 
D) A fire that occurred subsequent to the balance sheet date destroys a substantial amount of inventory that was on-hand at the year-end. 
A) A lawsuit against the auditee that had been ongoing for months is finally concluded: the amount awarded is substantially more than had been estimated. 
B) The inventory that was on hand at the balance sheet was sold soon sold after the balance sheet date for a price below its carrying value. 
C) A customer who had long been suspected of being in financial difficulty,declares bankruptcy.Based on the filing,amounts previously thought to be collectible will never be recovered. 
D) A fire that occurred subsequent to the balance sheet date destroys a substantial amount of inventory that was on-hand at the year-end.

Question 20

Lawyers are legally required to inform the auditor of possible claims not listed on the lawyer's confirmation letter,when responding to such legal inquiry letters as part of the year-end audit.

Accepted Answer

A) True 
 B)False

An auditor analyzes repairs and maintenance accounts primarily to obtain evidence in support of the audit assertion that all expenditures for ________.

An entity's income statements were misstated due to the recording of a journal entry that involved debits and credits to an unusual combination of expense and revenue accounts.The auditor is most likely to detect this irregularity by ________.

The refusal by a client's lawyer to provide a representation about the legality of an act committed by the client is generally ________.

The audit of total rental revenue is normally conducted in conjunction with the audit of receivables and investments.

Regarding subsequent events,when would pro-forma financial statements be the best disclosure?

Lawyers' letters should be written ________.

What are some of the challenges an auditor may face when it comes to using lawyers' responses to audit the presentation and disclosure of contingencies?

The client signs the enquiry letter about claims and possible claims that is sent to the company's law firm for confirmation.

What are the two types of subsequent events? What key characteristic(s)distinguish the two?

The primary objective of performing analytical procedures in the final review stage of an audit is to ________.

What are the three key features that must be included in the management representation letter?

Procedures for the audit of sales commission are generally coordinated with which of the following audit programs?

Auditors draft the letter of representation that will be prepared on company letterhead and signed by the officers of the company.

A second-partner review of the working papers and financial statements is performed to ensure that the ________.

Analytical procedures are used at the conclusion phase of the audit,as an overall evaluation of the financial statements.

Toward the end of an audit,it is not necessary that external auditors consider the revenue and expense accounts that were not audited in connection with balance sheet accounts.

Procedures for the audit of warranty expense are generally coordinated with which of the following audit programs?

Which of the following situations does NOT illustrate a subsequent event that requires adjustment to the financial statement numbers?

Lawyers are legally required to inform the auditor of possible claims not listed on the lawyer's confirmation letter,when responding to such legal inquiry letters as part of the year-end audit.

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

Filters

Exam 15: Completing the Audit Work

An auditor analyzes repairs and maintenance accounts primarily to obtain evidence in support of the audit assertion that all expenditures for ________.

An entity's income statements were misstated due to the recording of a journal entry that involved debits and credits to an unusual combination of expense and revenue accounts.The auditor is most likely to detect this irregularity by ________.

The refusal by a client's lawyer to provide a representation about the legality of an act committed by the client is generally ________.

The audit of total rental revenue is normally conducted in conjunction with the audit of receivables and investments.

Regarding subsequent events,when would pro-forma financial statements be the best disclosure?

Lawyers' letters should be written ________.

What are some of the challenges an auditor may face when it comes to using lawyers' responses to audit the presentation and disclosure of contingencies?

The client signs the enquiry letter about claims and possible claims that is sent to the company's law firm for confirmation.

What are the two types of subsequent events? What key characteristic(s)distinguish the two?

The primary objective of performing analytical procedures in the final review stage of an audit is to ________.

What are the three key features that must be included in the management representation letter?

Procedures for the audit of sales commission are generally coordinated with which of the following audit programs?

Auditors draft the letter of representation that will be prepared on company letterhead and signed by the officers of the company.

A second-partner review of the working papers and financial statements is performed to ensure that the ________.

Analytical procedures are used at the conclusion phase of the audit,as an overall evaluation of the financial statements.

Toward the end of an audit,it is not necessary that external auditors consider the revenue and expense accounts that were not audited in connection with balance sheet accounts.

Procedures for the audit of warranty expense are generally coordinated with which of the following audit programs?

Which of the following situations does NOT illustrate a subsequent event that requires adjustment to the financial statement numbers?

Lawyers are legally required to inform the auditor of possible claims not listed on the lawyer's confirmation letter,when responding to such legal inquiry letters as part of the year-end audit.

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

Filters