Question 1

The basic auditing application of the personal computer as an audit tool would not include

Accepted Answer

A)  Spreadsheet analysis. 
B)  Sample planning, selection, and evaluation. 
C)  Continuous monitoring of a client's internal control system. 
D)  Analytical review. 
A)  Spreadsheet analysis. 
B)  Sample planning, selection, and evaluation. 
C)  Continuous monitoring of a client's internal control system. 
D)  Analytical review.

Question 2

The ____________________________ approach to quantifying materially assigns an overall material amount for the financial statements and then allocates it to the particular accounts.

Accepted Answer

The answer of The ____________________________ approach to quantifying materially assigns...

Question 3

Auditors are generally left without definitive,quantitative guidelines for determining materiality.

Accepted Answer

A) True 
 B)False

Question 4

Auditing standards do not require that documentation show that

Accepted Answer

A)  It conforms to AICPA model papers. 
B)  The work was adequately planned and supervised. 
C)  The client's accounting records agree or reconcile with financial statements. 
D)  Sufficient appropriate evidential matter was obtained. 
A)  It conforms to AICPA model papers. 
B)  The work was adequately planned and supervised. 
C)  The client's accounting records agree or reconcile with financial statements. 
D)  Sufficient appropriate evidential matter was obtained.

Question 5

An auditor most likely would review an entity's periodic accounting for the numerical sequence of shipping documents and invoices to support management's financial statement assertion of

Accepted Answer

A)  Rights and obligations. 
B)  Completeness. 
C)  Presentation and disclosure. 
D)  Existence or occurrence. 
A)  Rights and obligations. 
B)  Completeness. 
C)  Presentation and disclosure. 
D)  Existence or occurrence.

Question 6

Audit documentation that shows the detailed evidence and procedures regarding the balance in the accumulated depreciation account for the year under audit will be found in the

Accepted Answer

A)  Current file evidence audit documentation. 
B)  Permanent file audit documentation. 
C)  Administrative audit documentation in the current file. 
D)  Planning memorandum in the current file. 
A)  Current file evidence audit documentation. 
B)  Permanent file audit documentation. 
C)  Administrative audit documentation in the current file. 
D)  Planning memorandum in the current file.

Question 7

Prior to accepting a new audit engagement,a public accounting firm should

Accepted Answer

A)  Attempt to contact the predecessor auditors. 
B)  Evaluate the integrity of management. 
C)  Assess the firm's resources to ensure that they are sufficient to permit them to accept the engagement. 
D)  All of the above. 
A)  Attempt to contact the predecessor auditors. 
B)  Evaluate the integrity of management. 
C)  Assess the firm's resources to ensure that they are sufficient to permit them to accept the engagement. 
D)  All of the above.

Question 8

Management is responsible for making the accounting ____________________________,and auditors are responsible for evaluating their ____________________________.

Accepted Answer

estimates;

Question 9

A primary advantage of using computer-assisted audit techniques (CAATs)packages to audit the financial statements of a client that uses computerized information systems is that the auditor may

Accepted Answer

A)  Access information stored on computer files even with a limited understanding of the client's hardware and software features. 
B)  Consider increasing the use of substantive tests of transactions in place of analytical procedures. 
C)  Substantiate the accuracy of data by using self-checking digits and hash totals. 
D)  Reduce the level of required tests of controls to a relatively small amount. 
A)  Access information stored on computer files even with a limited understanding of the client's hardware and software features. 
B)  Consider increasing the use of substantive tests of transactions in place of analytical procedures. 
C)  Substantiate the accuracy of data by using self-checking digits and hash totals. 
D)  Reduce the level of required tests of controls to a relatively small amount.

Question 10

Auditors use two kinds of audit plans,one for obtaining evidence about control risk,and the other for obtaining evidence about dollar amounts and disclosures.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following procedures would most likely be performed during planning?

Accepted Answer

A)  Surprise counts of the client's petty cash fund. 
B)  Reporting internal control deficiencies to the audit committee. 
C)  Performing a search for unrecorded liabilities. 
D)  Identifying related parties. 
A)  Surprise counts of the client's petty cash fund. 
B)  Reporting internal control deficiencies to the audit committee. 
C)  Performing a search for unrecorded liabilities. 
D)  Identifying related parties.

Question 12

An internal control program for understanding the client's inherent risk and control risk would not include which of the following procedures?

Accepted Answer

A)  Communicate with predecessor auditors. 
B)  Study previous year audit documentation. 
C)  Evaluate the competence and independence of the internal auditors. 
D)  Obtain written representation from the client concerning collectability of receivables. 
A)  Communicate with predecessor auditors. 
B)  Study previous year audit documentation. 
C)  Evaluate the competence and independence of the internal auditors. 
D)  Obtain written representation from the client concerning collectability of receivables.

Question 13

Which of the following is not an example of early information-gathering activities?

Accepted Answer

A)  Review of the corporate charter and bylaws. 
B)  Review of contracts, agreements, and legal proceedings. 
C)  Reading and studying the minutes of the meetings of directors and committees of the board of directors. 
D)  Preparing a time budget. 
A)  Review of the corporate charter and bylaws. 
B)  Review of contracts, agreements, and legal proceedings. 
C)  Reading and studying the minutes of the meetings of directors and committees of the board of directors. 
D)  Preparing a time budget.

Question 14

An audit engagement letter should normally exclude the following matter of agreement between the public accounting firm and the client

Accepted Answer

A)  Fees to be charged. 
B)  Terms of the engagement. 
C)  Schedules to be prepared by client. 
D)  Type of opinion to be produced. 
A)  Fees to be charged. 
B)  Terms of the engagement. 
C)  Schedules to be prepared by client. 
D)  Type of opinion to be produced.

Question 15

The revenue cycle of a company generally includes which accounts?

Accepted Answer

A)  Inventory, accounts payable, and general expenses. 
B)  Inventory, general expenses, and payroll. 
C)  Cash, accounts receivable, and sales. 
D)  Cash, notes payable, and capital stock. 
A)  Inventory, accounts payable, and general expenses. 
B)  Inventory, general expenses, and payroll. 
C)  Cash, accounts receivable, and sales. 
D)  Cash, notes payable, and capital stock.

Question 16

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 17

What are the characteristics that distinguish computer processing from manual processing?

Accepted Answer

Characteristics that distinguish compute

Question 18

An engagement letter is used primarily to

Accepted Answer

A)  Ensure a clear contractual understanding of the services to be provided by the CPA. 
B)  Express an opinion on the financial statements. 
C)  Provide management representations to be included in the audit evidence. 
D)  Disclaim liability. 
A)  Ensure a clear contractual understanding of the services to be provided by the CPA. 
B)  Express an opinion on the financial statements. 
C)  Provide management representations to be included in the audit evidence. 
D)  Disclaim liability.

Question 19

With respect to the concept of materiality,which one of the following statements is correct?

Accepted Answer

A)  Materiality depends only on the dollar amount of an item relative to other items in the financial statements. 
B)  Materiality depends on the nature of a transaction rather than the dollar amount of the transaction. 
C)  Materiality is determined by reference to AICPA guidelines. 
D)  Materiality is a matter of professional judgment. 
A)  Materiality depends only on the dollar amount of an item relative to other items in the financial statements. 
B)  Materiality depends on the nature of a transaction rather than the dollar amount of the transaction. 
C)  Materiality is determined by reference to AICPA guidelines. 
D)  Materiality is a matter of professional judgment.

Question 20

Which of the following use of computer-assisted audit techniques (CAATs)would most likely be considered a search for fraudulent activities?

Accepted Answer

A)  Selecting customers' accounts receivable for confirmation. 
B)  Recalculating inventory extensions. 
C)  Scanning accounts receivable balances for amounts over the credit limit. 
D)  Comparing a list of vendor addresses to employee address files. 
A)  Selecting customers' accounts receivable for confirmation. 
B)  Recalculating inventory extensions. 
C)  Scanning accounts receivable balances for amounts over the credit limit. 
D)  Comparing a list of vendor addresses to employee address files.

The basic auditing application of the personal computer as an audit tool would not include

The ____________________________ approach to quantifying materially assigns an overall material amount for the financial statements and then allocates it to the particular accounts.

Auditors are generally left without definitive,quantitative guidelines for determining materiality.

Auditing standards do not require that documentation show that

An auditor most likely would review an entity's periodic accounting for the numerical sequence of shipping documents and invoices to support management's financial statement assertion of

Audit documentation that shows the detailed evidence and procedures regarding the balance in the accumulated depreciation account for the year under audit will be found in the

Prior to accepting a new audit engagement,a public accounting firm should

Management is responsible for making the accounting ,and auditors are responsible for evaluating their .

A primary advantage of using computer-assisted audit techniques (CAATs)packages to audit the financial statements of a client that uses computerized information systems is that the auditor may

Auditors use two kinds of audit plans,one for obtaining evidence about control risk,and the other for obtaining evidence about dollar amounts and disclosures.

Which of the following procedures would most likely be performed during planning?

An internal control program for understanding the client's inherent risk and control risk would not include which of the following procedures?

Which of the following is not an example of early information-gathering activities?

An audit engagement letter should normally exclude the following matter of agreement between the public accounting firm and the client

The revenue cycle of a company generally includes which accounts?

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

What are the characteristics that distinguish computer processing from manual processing?

An engagement letter is used primarily to

With respect to the concept of materiality,which one of the following statements is correct?

Which of the following use of computer-assisted audit techniques (CAATs)would most likely be considered a search for fraudulent activities?

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 Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

Exam 3: Engagement Planning

The basic auditing application of the personal computer as an audit tool would not include

The ____________________________ approach to quantifying materially assigns an overall material amount for the financial statements and then allocates it to the particular accounts.

Auditors are generally left without definitive,quantitative guidelines for determining materiality.

Auditing standards do not require that documentation show that

An auditor most likely would review an entity's periodic accounting for the numerical sequence of shipping documents and invoices to support management's financial statement assertion of

Audit documentation that shows the detailed evidence and procedures regarding the balance in the accumulated depreciation account for the year under audit will be found in the

Prior to accepting a new audit engagement,a public accounting firm should

Management is responsible for making the accounting ____________________________,and auditors are responsible for evaluating their ____________________________.

A primary advantage of using computer-assisted audit techniques (CAATs)packages to audit the financial statements of a client that uses computerized information systems is that the auditor may

Auditors use two kinds of audit plans,one for obtaining evidence about control risk,and the other for obtaining evidence about dollar amounts and disclosures.

Which of the following procedures would most likely be performed during planning?

An internal control program for understanding the client's inherent risk and control risk would not include which of the following procedures?

Which of the following is not an example of early information-gathering activities?

An audit engagement letter should normally exclude the following matter of agreement between the public accounting firm and the client

The revenue cycle of a company generally includes which accounts?

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

What are the characteristics that distinguish computer processing from manual processing?

An engagement letter is used primarily to

With respect to the concept of materiality,which one of the following statements is correct?

Which of the following use of computer-assisted audit techniques (CAATs)would most likely be considered a search for fraudulent activities?

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 Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

Management is responsible for making the accounting ,and auditors are responsible for evaluating their .