Question 1

An auditor who uses 7 percent of income before taxes as a basis for overall materiality would be basing judgment on

Accepted Answer

A)  Absolute size. 
B)  Relative size. 
C)  Nature of the item. 
D)  Cumulative effects. 
A)  Absolute size. 
B)  Relative size. 
C)  Nature of the item. 
D)  Cumulative effects.

Question 2

A(n)_______________________________ is a chain of evidence provided through coding,cross-references,and documentation connecting account balances and other summary results with the original transaction documents calculations.

Accepted Answer

The answer of A(n)_______________________________ is a chain of evidence provided...

Question 3

Scanning is an "eyes-open" approach of looking for anything unusual in the accounts.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following can CAATs not do?

Accepted Answer

A)  Scan inventory quantities for negative balances. 
B)  Determine the reasonableness of the allowance for doubtful accounts. 
C)  Recalculate depreciation. 
D)  Select customers' accounts receivable for confirmation. 
A)  Scan inventory quantities for negative balances. 
B)  Determine the reasonableness of the allowance for doubtful accounts. 
C)  Recalculate depreciation. 
D)  Select customers' accounts receivable for confirmation.

Question 5

Audit plans are used as audit planning tools.

Accepted Answer

A) True 
 B)False

Question 6

The confirmation of a cash balance provides primary evidence regarding which management assertion?

Accepted Answer

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

Question 7

When companies change auditors,the former auditors are referred to as the ________________________________________

Accepted Answer

predecesso

Question 8

_____________________________ are persons skilled in fields other than accounting and auditing who are not members of the audit team.

Accepted Answer

The answer of _____________________________ are persons skilled in fields other...

Question 9

Audit procedures are intended to enable auditors to conduct work in accordance with the three performance principle.

Accepted Answer

A) True 
 B)False

Question 10

Planning becomes a basis for preparing the _________________________________.

Accepted Answer

The answer of Planning becomes a basis for preparing the...

Question 11

When initiating communications with predecessor auditors,prospective auditors should expect

Accepted Answer

A)  To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits. 
B)  To conduct interviews with the partner and manager in charge of the predecessor public accounting firm's engagement. 
C)  To obtain copies of some or all of the predecessor auditors' audit documentation. 
D)  All of the above. 
A)  To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits. 
B)  To conduct interviews with the partner and manager in charge of the predecessor public accounting firm's engagement. 
C)  To obtain copies of some or all of the predecessor auditors' audit documentation. 
D)  All of the above.

Question 12

Information is _____________________________ if it is likely to influence financial statement users' decisions.

Accepted Answer

The answer of Information is _____________________________ if it is likely...

Question 13

An auditor tests an entity's control that matches shipping documents to sales invoices before they are recorded in the financial statements as revenue in support of management's financial statement assertion of

Accepted Answer

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

Question 14

When auditing the existence assertion for an asset,auditors proceed from the

Accepted Answer

A)  Financial statement amounts back to the potentially unrecorded items. 
B)  Potentially unrecorded items forward to the financial statement amounts. 
C)  General ledger back to the supporting original transaction documents. 
D)  Supporting original transaction documents to the general ledger. 
A)  Financial statement amounts back to the potentially unrecorded items. 
B)  Potentially unrecorded items forward to the financial statement amounts. 
C)  General ledger back to the supporting original transaction documents. 
D)  Supporting original transaction documents to the general ledger.

Question 15

Physical observation by an audit team would include

Accepted Answer

A)  Examination of a sales invoice. 
B)  Recalculation of depreciation. 
C)  Examination of securities certificates. 
D)  Scanning of the expense accounts for unusual transactions. 
A)  Examination of a sales invoice. 
B)  Recalculation of depreciation. 
C)  Examination of securities certificates. 
D)  Scanning of the expense accounts for unusual transactions.

Question 16

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 17

Comparing data on separate files can be accomplished by using computer-assisted audit techniques (CAATs)to determine whether comparable information is in agreement.Examples of such comparisons would not include

Accepted Answer

A)  Payroll details with personnel records. 
B)  Current and prior inventory to details of purchases and sales. 
C)  Paid vouchers to disbursements. 
D)  Observation of inventory accounts. 
A)  Payroll details with personnel records. 
B)  Current and prior inventory to details of purchases and sales. 
C)  Paid vouchers to disbursements. 
D)  Observation of inventory accounts.

Question 18

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 19

The computer has simplified auditing by providing a better audit trail.

Accepted Answer

A) True 
 B)False

Question 20

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.

An auditor who uses 7 percent of income before taxes as a basis for overall materiality would be basing judgment on

A(n)_______________________________ is a chain of evidence provided through coding,cross-references,and documentation connecting account balances and other summary results with the original transaction documents calculations.

Scanning is an "eyes-open" approach of looking for anything unusual in the accounts.

Which of the following can CAATs not do?

Audit plans are used as audit planning tools.

The confirmation of a cash balance provides primary evidence regarding which management assertion?

When companies change auditors,the former auditors are referred to as the ________________________________________

_____________________________ are persons skilled in fields other than accounting and auditing who are not members of the audit team.

Audit procedures are intended to enable auditors to conduct work in accordance with the three performance principle.

Planning becomes a basis for preparing the _________________________________.

When initiating communications with predecessor auditors,prospective auditors should expect

Information is _____________________________ if it is likely to influence financial statement users' decisions.

An auditor tests an entity's control that matches shipping documents to sales invoices before they are recorded in the financial statements as revenue in support of management's financial statement assertion of

When auditing the existence assertion for an asset,auditors proceed from the

Physical observation by an audit team would include

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

Comparing data on separate files can be accomplished by using computer-assisted audit techniques (CAATs)to determine whether comparable information is in agreement.Examples of such comparisons would not include

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

The computer has simplified auditing by providing a better audit trail.

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

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

An auditor who uses 7 percent of income before taxes as a basis for overall materiality would be basing judgment on

A(n)_______________________________ is a chain of evidence provided through coding,cross-references,and documentation connecting account balances and other summary results with the original transaction documents calculations.

Scanning is an "eyes-open" approach of looking for anything unusual in the accounts.

Which of the following can CAATs not do?

Audit plans are used as audit planning tools.

The confirmation of a cash balance provides primary evidence regarding which management assertion?

When companies change auditors,the former auditors are referred to as the ________________________________________

_____________________________ are persons skilled in fields other than accounting and auditing who are not members of the audit team.

Audit procedures are intended to enable auditors to conduct work in accordance with the three performance principle.

Planning becomes a basis for preparing the _________________________________.

When initiating communications with predecessor auditors,prospective auditors should expect

Information is _____________________________ if it is likely to influence financial statement users' decisions.

An auditor tests an entity's control that matches shipping documents to sales invoices before they are recorded in the financial statements as revenue in support of management's financial statement assertion of

When auditing the existence assertion for an asset,auditors proceed from the

Physical observation by an audit team would include

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

Comparing data on separate files can be accomplished by using computer-assisted audit techniques (CAATs)to determine whether comparable information is in agreement.Examples of such comparisons would not include

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

The computer has simplified auditing by providing a better audit trail.

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

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