Question 1

The confirmation of an accounts receivable balance provides primary evidence regarding which management assertion?

Accepted Answer

A)  Completeness 
B)  Valuation 
C)  Allocation 
D)  Existence 
A)  Completeness 
B)  Valuation 
C)  Allocation 
D)  Existence

Question 2

When assessing internal auditors' objectivity,an independent auditor should

Accepted Answer

A)  consider the policies that prohibit the internal auditors from auditing areas where they were recently assigned. 
B)  review the internal auditors' reports to determine that their conclusions are consistent with the work performed. 
C)  verify that the internal auditors' assessment of control risk is comparable to the independent auditor's assessment. 
D)  evaluate the quality of the internal auditors' working paper documentation and their recent audit recommendations. 
A)  consider the policies that prohibit the internal auditors from auditing areas where they were recently assigned. 
B)  review the internal auditors' reports to determine that their conclusions are consistent with the work performed. 
C)  verify that the internal auditors' assessment of control risk is comparable to the independent auditor's assessment. 
D)  evaluate the quality of the internal auditors' working paper documentation and their recent audit recommendations.

Question 3

Which of the following types of transactions would be routine and computerized?

Accepted Answer

A)  Capital stock sales and repurchases 
B)  Credit sales and billings 
C)  Income tax expense and liability 
D)  Bank loan transactions 
A)  Capital stock sales and repurchases 
B)  Credit sales and billings 
C)  Income tax expense and liability 
D)  Bank loan transactions

Question 4

Which of the following steps should an auditor perform first to determine the existence of related parties?

Accepted Answer

A)  Examine invoices, contracts, and purchasing orders. 
B)  Request a list of related parties from management. 
C)  Review the company's business structure. 
D)  Review proxy and other materials filed with the SEC. 
A)  Examine invoices, contracts, and purchasing orders. 
B)  Request a list of related parties from management. 
C)  Review the company's business structure. 
D)  Review proxy and other materials filed with the SEC.

Question 5

The essential advantages of a computer-assisted audit techniques (CAATs)package would not include the fact that

Accepted Answer

A)  the same software can be used on different types of clients' computer environments. 
B)  a large number of CAATs packages are currently available. 
C)  software packages are always inexpensive. 
D)  the ability to control and modify the program to meet an auditors' need. 
A)  the same software can be used on different types of clients' computer environments. 
B)  a large number of CAATs packages are currently available. 
C)  software packages are always inexpensive. 
D)  the ability to control and modify the program to meet an auditors' need.

Question 6

In the preparation of an audit plan,which of the following items is not essential?

Accepted Answer

A)  A review of material from prior audits 
B)  The preparation of a budget identifying the costs of resources needed 
C)  An understanding of controls established by management 
D)  Assessment of inherent risk 
A)  A review of material from prior audits 
B)  The preparation of a budget identifying the costs of resources needed 
C)  An understanding of controls established by management 
D)  Assessment of inherent risk

Question 7

Which of the following is not a category of audit documentation?

Accepted Answer

A)  Temporary files 
B)  Permanent files 
C)  Audit administrative files 
D)  Current documentation files 
A)  Temporary files 
B)  Permanent files 
C)  Audit administrative files 
D)  Current documentation files

Question 8

Cutoff tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about management's assertion of

Accepted Answer

A)  presentation and disclosure. 
B)  completeness. 
C)  rights and obligations. 
D)  existence. 
A)  presentation and disclosure. 
B)  completeness. 
C)  rights and obligations. 
D)  existence.

Question 9

Which of the following is not considered an accounting estimate?

Accepted Answer

A)  Allowance for loan losses 
B)  Credit sales 
C)  Net realizable value of inventory 
D)  Percentage-of-completion revenue to be recorded 
A)  Allowance for loan losses 
B)  Credit sales 
C)  Net realizable value of inventory 
D)  Percentage-of-completion revenue to be recorded

Question 10

To satisfy the valuation assertion when auditing an investment in another company that is publicly and actively traded,an auditor most likely would seek to

Accepted Answer

A)  inspect the stock certificates evidencing the investment. 
B)  examine the audited financial statements of the investee company. 
C)  review the broker's advice or canceled check for the investment's acquisition. 
D)  obtain market quotations from The Wall Street Journal or another independent source. 
A)  inspect the stock certificates evidencing the investment. 
B)  examine the audited financial statements of the investee company. 
C)  review the broker's advice or canceled check for the investment's acquisition. 
D)  obtain market quotations from The Wall Street Journal or another independent source.

Question 11

What are the advantages and limitations derived from using computer-assisted audit techniques (CAATs)packages?

Accepted Answer

The advantages of computer-assisted audi

Question 12

During an audit of an entity's stockholders' equity accounts,the auditor determines whether there are restrictions on retained earnings resulting from loans,agreements,or state law.This audit procedure most likely is intended to verify management's assertion

Accepted Answer

A)  existence or occurrence. 
B)  completeness. 
C)  valuation or allocation. 
D)  presentation and disclosure. 
A)  existence or occurrence. 
B)  completeness. 
C)  valuation or allocation. 
D)  presentation and disclosure.

Question 13

In auditing accrued liabilities,an auditor's procedures most likely would focus primarily on management's assertion of

Accepted Answer

A)  existence or occurrence. 
B)  completeness. 
C)  presentation and disclosure. 
D)  valuation or allocation. 
A)  existence or occurrence. 
B)  completeness. 
C)  presentation and disclosure. 
D)  valuation or allocation.

Question 14

Which of the following is not a way in which auditors use the concept of overall materiality?

Accepted Answer

A)  As a guide to planning the audit plan 
B)  As a guide to the evaluation of evidence 
C)  As a guide for making decisions about the audit report 
D)  As a guide for assessing control risk 
A)  As a guide to planning the audit plan 
B)  As a guide to the evaluation of evidence 
C)  As a guide for making decisions about the audit report 
D)  As a guide for assessing control risk

Question 15

Which of the following factors should an external auditor obtain updated information about then assessing an internal auditor's competence?

Accepted Answer

A)  The reporting status of the internal auditor within the organization. 
B)  The educational level and professional experiences of the internal auditor. 
C)  Whether policies prohibit the internal auditor from auditing areas where relatives are employed. 
D)  Whether the board of directors, audit committee, or owner-manager oversees employment decisions related to the internal auditor. 
A)  The reporting status of the internal auditor within the organization. 
B)  The educational level and professional experiences of the internal auditor. 
C)  Whether policies prohibit the internal auditor from auditing areas where relatives are employed. 
D)  Whether the board of directors, audit committee, or owner-manager oversees employment decisions related to the internal auditor.

Question 16

Audit documentation does not normally include the

Accepted Answer

A)  specific assertions under audit. 
B)  industry accounting guides. 
C)  record of the procedures performed. 
D)  decisions made in the course of the audit. 
A)  specific assertions under audit. 
B)  industry accounting guides. 
C)  record of the procedures performed. 
D)  decisions made in the course of the audit.

Question 17

Looking at vendors' invoices for particular information is an example of

Accepted Answer

A)  physical observation. 
B)  confirmation. 
C)  inspection of documents. 
D)  scanning. 
A)  physical observation. 
B)  confirmation. 
C)  inspection of documents. 
D)  scanning.

Question 18

Which of the following audit procedures probably would provide the most reliable evidence concerning the entity's assertion of rights and obligations related to inventories?

Accepted Answer

A)  Trace test counts noted during the physical count of inventory to the summarization of quantities. 
B)  Inspect agreements for evidence of inventory held on consignment. 
C)  Select the last few shipping advices used before the physical count and determine whether the shipments were recorded as sales. 
D)  Inspect the open purchase order file for significant commitments to consider for disclosure. 
A)  Trace test counts noted during the physical count of inventory to the summarization of quantities. 
B)  Inspect agreements for evidence of inventory held on consignment. 
C)  Select the last few shipping advices used before the physical count and determine whether the shipments were recorded as sales. 
D)  Inspect the open purchase order file for significant commitments to consider for disclosure.

The confirmation of an accounts receivable balance provides primary evidence regarding which management assertion?

When assessing internal auditors' objectivity,an independent auditor should

Which of the following types of transactions would be routine and computerized?

Which of the following steps should an auditor perform first to determine the existence of related parties?

The essential advantages of a computer-assisted audit techniques (CAATs)package would not include the fact that

In the preparation of an audit plan,which of the following items is not essential?

Which of the following is not a category of audit documentation?

Cutoff tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about management's assertion of

Which of the following is not considered an accounting estimate?

To satisfy the valuation assertion when auditing an investment in another company that is publicly and actively traded,an auditor most likely would seek to

What are the advantages and limitations derived from using computer-assisted audit techniques (CAATs)packages?

During an audit of an entity's stockholders' equity accounts,the auditor determines whether there are restrictions on retained earnings resulting from loans,agreements,or state law.This audit procedure most likely is intended to verify management's assertion

In auditing accrued liabilities,an auditor's procedures most likely would focus primarily on management's assertion of

Which of the following is not a way in which auditors use the concept of overall materiality?

Which of the following factors should an external auditor obtain updated information about then assessing an internal auditor's competence?

Audit documentation does not normally include the

Looking at vendors' invoices for particular information is an example of

Which of the following audit procedures probably would provide the most reliable evidence concerning the entity's assertion of rights and obligations related to inventories?

Auditing and Assurance Services

Professional Standards

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits governmental Audits and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 3: Engagement Planning

The confirmation of an accounts receivable balance provides primary evidence regarding which management assertion?

When assessing internal auditors' objectivity,an independent auditor should

Which of the following types of transactions would be routine and computerized?

Which of the following steps should an auditor perform first to determine the existence of related parties?

The essential advantages of a computer-assisted audit techniques (CAATs)package would not include the fact that

In the preparation of an audit plan,which of the following items is not essential?

Which of the following is not a category of audit documentation?

Cutoff tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about management's assertion of

Which of the following is not considered an accounting estimate?

To satisfy the valuation assertion when auditing an investment in another company that is publicly and actively traded,an auditor most likely would seek to

What are the advantages and limitations derived from using computer-assisted audit techniques (CAATs)packages?

During an audit of an entity's stockholders' equity accounts,the auditor determines whether there are restrictions on retained earnings resulting from loans,agreements,or state law.This audit procedure most likely is intended to verify management's assertion

In auditing accrued liabilities,an auditor's procedures most likely would focus primarily on management's assertion of

Which of the following is not a way in which auditors use the concept of overall materiality?

Which of the following factors should an external auditor obtain updated information about then assessing an internal auditor's competence?

Audit documentation does not normally include the

Looking at vendors' invoices for particular information is an example of

Which of the following audit procedures probably would provide the most reliable evidence concerning the entity's assertion of rights and obligations related to inventories?

Auditing and Assurance Services

Professional Standards

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits governmental Audits and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters