Exam 18: Integrated Audits of Public Companies

Which of the following best describes a CPA's engagement to report on a public entity's internal control over financial reporting?

Which of the following would most likely be included in a SEC 10K filing in which a material weakness in internal control exists?   Financial Statement:Audit Report Internal Control Audit Report A- Unqualified Adverse B- Unqualified Qualified C- Qualified Qualified D- Adverse Unqualified  

A material weakness that exists at year-end will result in what type of audit report on internal control?

Deficiencies in internal control identified by the auditor that are lesser than significant deficiencies:

A control deficiency that is less than a significant deficiency is most likely to result in what form of audit opinion on internal control?

According to PCAOB standards,determining the allowance for doubtful accounts is referred to as a(n):

PCAOB standards suggest that auditors emphasize nonroutine transactions as contrasted to routine transactions in their consideration of internal control.

Which of the following is a strong indicator that a material weakness in internal control exists?

Which of the following is most likely to be considered a material weakness in internal control?

Assume that an auditor is focusing on two weaknesses in internal control.Although neither is by itself a material weakness,the two significant deficiencies in combination represent a material weakness.The client effectively remediates one of them prior to year-end but does not have time to remediate the other prior to year-end.What type of audit report on internal control is appropriate?

Which is leastlikely to be a question asked of employee personnel during a walk-through?

A client imposed scope limitation relating to the audit of internal control ordinarily results in a qualified report.

Walk-throughs provide the auditors with evidence to: Confirm their understanding effectiveness of Substantiate account balance controls A- Yes Yes B- Yes No C- No Yes D- No No

An audit firm has been engaged to report on whether a material weakness that previously resulted in an adverse opinion on internal control has been remediated.Which of the following statements is correct?

An auditor identified a significant deficiency in internal control in December.The client was informed and the client corrected the significant deficiency shortly before year-end (December 31);the auditor agrees that the correction eliminated the significant deficiency as of December 31.The appropriate audit report on internal control under a PCAOB Standard No.5 audit of internal control is:

Which of the following is an accurate statement about internal control weaknesses?

Which must the auditor communicate to management? Known Material Weaknesses Known Significant Deficiencies A- Yes Yes B- Yes No C- No Yes D- No No

The PCAOB has outlined a number of circumstances that are indicators of a material weakness.In addition,other control deficiencies may or may not be a material weakness depending upon details of the circumstances involved.Categorize the following:

The SEC reporting requirement that a public company prepare a report in which it acknowledges its responsibility for establishing and maintaining accurate internal control and to assess internal control effectiveness in general applies to which companies?

The minimum likelihood of loss involved in the consideration of a possible material weakness is: