Question 1

Likely misstatements are those that probably exist,based on audit evidence examined.

Accepted Answer

A) True 
 B)False  True

Question 2

Subsequent to the issuance of the audit report,the auditor became aware of facts existing at the report date that would have affected the report had the auditor then been aware of such facts.After determining that the information is reliable,the auditor should ________.

Accepted Answer

A)  determine whether there are persons relying or likely to rely on the financial statements who would attach importance to the information
B)  request that management disclose the newly discovered information by issuing revised financial statements
C)  issue revised pro forma financial statements taking into consideration the newly discovered information
D)  give public notice that the auditor is no longer associated with the financial statements B

Question 3

Further possible misstatements ________.

Accepted Answer

A)  are those actually identified during the audit,so there is no uncertainty about their existence
B)  are those that probably exist,based on audit evidence examined
C)  are those that could exist over and above the total of known and likely misstatements because of the limitations of the testing concept of auditing
D)  are those for which the amount of possible misstatement cannot be precisely quantified C

Question 4

In the current CAS 700 audit report,the description of an auditor's responsibilities and the work performed is covered in ________.

Accepted Answer

A)  three paragraphs
B)  half a paragraph
C)  one paragraph
D)  two paragraphs

Question 5

If prior year's financial statements were audited by a different audit firm,this information would appear in a(n)________ paragraph in the audit report.

Accepted Answer

A)  Scope
B)  Other Matter
C)  Opinion
D)  Emphasis of Matter

Question 6

Which of the following is NOT one of the four categories of acceptable financial reporting frameworks?

Accepted Answer

A)  Special purpose,compliance presentation framework.
B)  General purpose,fair presentation framework.
C)  General purpose,compliance framework.
D)  Compliance purpose,fair presentation framework.

Question 7

The summary of misstatements schedule is used to record and summarize ___________.

Accepted Answer

A)  all non-trivial misstatements only
B)  any and all misstatements identified during the course of the audit
C)  all non-trivial misstatements identified and projected likely misstatements
D)  all material misstatements and projected likely misstatements

Question 8

Which of the following statements regarding management estimates is FALSE?

Accepted Answer

A)  Complications in audit evaluation can arise from measurements involving management estimates.
B)  Auditors typically do not keep track of the differences between management estimates and the most reasonable estimates supported by audit evidence.
C)  They also identify estimates with high risk due to forecast errors,and assess whether these are fairly presented in the circumstances.
D)  In areas where GAAP are evolving,the auditor needs to exercise judgment,guided by general principles and reporting objectives,to assess fair presentation.

Question 9

Briefly explain the auditor's responsibility for the subsequent discovery of facts that occurred between the date of the financial statements and the date of the auditor's report.

Accepted Answer

The answer of Briefly explain the auditor's responsibility for the...

Question 10

What is "dual dating" in the audit report?

Accepted Answer

The answer of What is "dual dating" in the audit...

Question 11

CAS 200 provides a framework for the key principles that guide the conduct of a financial statement audit in accordance with generally accepted auditing standards.It defines all of the following with respect to Canadian Auditing Standards EXCEPT their ________.

Accepted Answer

A)  scope
B)  authority
C)  interrelationship
D)  structure

Question 12

What is an Other Matter (OM)paragraph?

Accepted Answer

The answer of What is an Other Matter (OM)paragraph?...

Question 13

A reply to a lawyer's letters should be issued ________.

Accepted Answer

A)  at the audit report date
B)  near the end of the audit
C)  before the engagement
D)  throughout the audit

Question 14

Arithmetical mistakes,use of inappropriate accounting principles,incorrect application of accounting principles,and disagreements about valuation or other estimates are the causes of ________.

Accepted Answer

A)  fraud
B)  misstatements
C)  materiality
D)  adjustments

Question 15

Further possible misstatements are those that could exist over and above the total of known and likely misstatements because of the fundamental limitations of auditing.

Accepted Answer

A) True 
 B)False

Question 16

The auditor must decide if any uncorrected misstatements are material individually but not in aggregate.

Accepted Answer

A) True 
 B)False

Question 17

To assess fair presentation,the audit engagement partner considers the results of the final overall financial statement analysis,and assesses whether the overall presentation,structure,and content of the financial statements and notes represent the underlying transactions and events fairly,from the perspective of users.The auditor must be satisfied that the information presented in the financial statements is all of the following EXCEPT ________.

Accepted Answer

A)  relevant
B)  reliable
C)  confidential
D)  understandable

Question 18

Before adjusting entries proposed by the auditors are included in financial statements,they must be approved by the ________.

Accepted Answer

A)  client's management
B)  audit manager
C)  engagement partner
D)  cold review partner

Question 19

Auditors typically do not keep track of the differences between management estimates and the most reasonable estimates supported by audit evidence.

Accepted Answer

A) True 
 B)False

Question 20

Auditors are responsible to search for both types of subsequent events between ________.

Accepted Answer

A)  the financial statement year-end date and the audited financial statement issue date
B)  the audit report date and the audited financial statement issue date
C)  the financial statement year-end date and the audit report date
D)  the interim audit date and the audit report date

Exam 16: Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Likely misstatements are those that probably exist,based on audit evidence examined.

Subsequent to the issuance of the audit report,the auditor became aware of facts existing at the report date that would have affected the report had the auditor then been aware of such facts.After determining that the information is reliable,the auditor should ________.

Further possible misstatements ________.

In the current CAS 700 audit report,the description of an auditor's responsibilities and the work performed is covered in ________.

If prior year's financial statements were audited by a different audit firm,this information would appear in a(n) ________ paragraph in the audit report.

Which of the following is NOT one of the four categories of acceptable financial reporting frameworks?

The summary of misstatements schedule is used to record and summarize ___________.

Which of the following statements regarding management estimates is FALSE?

Briefly explain the auditor's responsibility for the subsequent discovery of facts that occurred between the date of the financial statements and the date of the auditor's report.

What is "dual dating" in the audit report?

CAS 200 provides a framework for the key principles that guide the conduct of a financial statement audit in accordance with generally accepted auditing standards.It defines all of the following with respect to Canadian Auditing Standards EXCEPT their ________.

What is an Other Matter (OM)paragraph?

A reply to a lawyer's letters should be issued ________.

Arithmetical mistakes,use of inappropriate accounting principles,incorrect application of accounting principles,and disagreements about valuation or other estimates are the causes of ________.

Further possible misstatements are those that could exist over and above the total of known and likely misstatements because of the fundamental limitations of auditing.

The auditor must decide if any uncorrected misstatements are material individually but not in aggregate.

Before adjusting entries proposed by the auditors are included in financial statements,they must be approved by the ________.

Auditors typically do not keep track of the differences between management estimates and the most reasonable estimates supported by audit evidence.

Auditors are responsible to search for both types of subsequent events between ________.