Question 1

Matt Fuller reports to the board and evaluates how the company can improve risk management practices, internal control procedures, and certain governance issues. Who is
He?

Accepted Answer

A)  President 
B)  Controller 
C)  Treasurer 
D)  Internal Auditor

Question 2

Theodore Heinrich prepared a set of financial statements based on information provided to him. He checked mathematical accuracy of the data, and the client complimented him on
The reasonable cost of the work he performed. Theodore performed

Accepted Answer

A)  a compilation. 
B)  a review. 
C)  an audit. 
D)  none of the above

Question 3

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

Question 4

As users of the financial statements, suppliers would least consider which of the following aspects of the financial statements?

Accepted Answer

A)  solvency of the entity 
B)  profitability of the entity 
C)  return on investment of the entity 
D)  corporate social responsibility of the entity

Question 5

The wording of a limited assurance engagement expresses a conclusion that generally states

Accepted Answer

A)  there is nothing wrong with the subject matter. 
B)  there is something wrong with the subject matter. 
C)  there is nothing that has come to the attention of the auditors that would lead them to believe that the information being assured is not true and fair. 
D)  there is something that has come to the attention of the auditors that would lead them to believe that the information being assured is not true and fair.

Question 6

Vera Sobczyk spent a week at a client's wholesale operation determining whether the client's remittances to the tax authorities were in accordance with tax regulations. This is an
Example of a(n)

Accepted Answer

A)  taxes payable mandate. 
B)  financial audit. 
C)  operational audit. 
D)  none of the above

Question 7

Jimmy Bunting, the senior auditor at Yanzhou Coal Mining and Minerals, performed the following tasks: he used analytical procedures and he had discussions with management. These activities were a basis for a conclusion on the financial information. What did Jimmy Bunting perform?

Accepted Answer

A)  a qualified report 
B)  an unmodified opinion 
C)  a compilation 
D)  a review engagement

Question 8

The most common types of 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 9

Only current investors (not potential investors) are considered to be users of the financial statements.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

The answer of The main assurance service the general public...

Question 11

Mary Logan was careful to undertake her audits in a most responsible manner. Her audit manager complimented her on her diligence and how well she documented her work at the
Different stages of the audit process. Which element of responsibility did she display?

Accepted Answer

A)  due care 
B)  professional judgment 
C)  professional scepticism 
D)  none of the above

Question 12

Which of the following is incorrect? A government can be considered to be a user of the general purpose financial statements because

Accepted Answer

A)  it is the basis for the calculation of taxes owed to the government. 
B)  it can determine whether certain regulations have been complied with. 
C)  to gain a better understanding of the entity's activities. 
D)  governments need to assess the entity so that they can provide the entity with grants that will benefit society.

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

Question 14

All modified audit reports are qualified audit opinions.

Accepted Answer

A) True 
 B)False

Question 15

A compliance audit involves gathering evidence to ascertain whether the person or entity under review has followed the rules, policies, procedures, laws and regulations with which they must conform

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)  audit 
B)  non-assurance services 
C)  reviews 
D)  none of the above

Question 17

How is the expectation gap caused and how can the effects on the expectation gap be reduced?

Accepted Answer

The answer of How is the expectation gap caused and...

Question 18

According to the agency theory, demand for audit is due to conflicts between

Accepted Answer

A)  managers and owners. 
B)  managers and agents. 
C)  owners and principals. 
D)  auditors and owners.

Question 19

The expectation gap is caused by

Accepted Answer

A)  realistic auditor expectations. 
B)  unrealistic user expectations. 
C)  realistic user expectations. 
D)  unrealistic auditor expectations.

Question 20

A reasonable level of assurance is the highest level of assurance that an auditor can provide.

Accepted Answer

A) True 
 B)False

Exam 1: Introduction and Review of Audit and Assurance

Matt Fuller reports to the board and evaluates how the company can improve risk management practices, internal control procedures, and certain governance issues. Who is He?

Theodore Heinrich prepared a set of financial statements based on information provided to him. He checked mathematical accuracy of the data, and the client complimented him on The reasonable cost of the work he performed. Theodore performed

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

As users of the financial statements, suppliers would least consider which of the following aspects of the financial statements?

The wording of a limited assurance engagement expresses a conclusion that generally states

Vera Sobczyk spent a week at a client's wholesale operation determining whether the client's remittances to the tax authorities were in accordance with tax regulations. This is an Example of a(n)

Jimmy Bunting, the senior auditor at Yanzhou Coal Mining and Minerals, performed the following tasks: he used analytical procedures and he had discussions with management. These activities were a basis for a conclusion on the financial information. What did Jimmy Bunting perform?

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

Only current investors (not potential investors) are considered to be users of the financial statements.

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

Mary Logan was careful to undertake her audits in a most responsible manner. Her audit manager complimented her on her diligence and how well she documented her work at the Different stages of the audit process. Which element of responsibility did she display?

Which of the following is incorrect? A government can be considered to be a user of the general purpose financial statements because

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

All modified audit reports are qualified audit opinions.

A compliance audit involves gathering evidence to ascertain whether the person or entity under review has followed the rules, policies, procedures, laws and regulations with which they must conform

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

How is the expectation gap caused and how can the effects on the expectation gap be reduced?

According to the agency theory, demand for audit is due to conflicts between

The expectation gap is caused by

A reasonable level of assurance is the highest level of assurance that an auditor can provide.