Question 1

Errors in data processed in a batch computer system may not be detected immediately because

Accepted Answer

A)  Transaction trails in a batch system are available for only a limited period of time. 
B)  There are time delays in processing transactions in a batch system. 
C)  Errors in some transactions cause rejection of other transactions in the batch. 
D)  Random errors are more likely in a batch system than in an online system. 
A)  Transaction trails in a batch system are available for only a limited period of time. 
B)  There are time delays in processing transactions in a batch system. 
C)  Errors in some transactions cause rejection of other transactions in the batch. 
D)  Random errors are more likely in a batch system than in an online system.

Question 2

The degree of computer complexity and use may influence the nature,timing,and extent of audit procedures.

Accepted Answer

A) True 
 B)False

Question 3

The idea of the cycle approach is to group accounts together by

Accepted Answer

A)  Specific function. 
B)  Financial statement assertion. 
C)  Audit objective. 
D)  Transactions that affect all accounts in that particular group. 
A)  Specific function. 
B)  Financial statement assertion. 
C)  Audit objective. 
D)  Transactions that affect all accounts in that particular group.

Question 4

An auditor would least likely use computer software to

Accepted Answer

A)  Access client data files. 
B)  Prepare spreadsheets. 
C)  Assess information systems control risk. 
D)  Construct parallel simulations to test the client's computing system. 
A)  Access client data files. 
B)  Prepare spreadsheets. 
C)  Assess information systems control risk. 
D)  Construct parallel simulations to test the client's computing system.

Question 5

In considering overall materiality for planning purposes,an auditor believes that misstatements aggregating $10,000 would have a material effect on an entity's income statement but that misstatements would have to aggregate $20,000 to materially affect the balance sheet.Ordinarily,it would be appropriate to design audit procedures that would be expected to detect misstatements aggregating

Accepted Answer

A)  $10,000. 
B)  $15,000. 
C)  $20,000. 
D)  $30,000. 
A)  $10,000. 
B)  $15,000. 
C)  $20,000. 
D)  $30,000.

Question 6

Control activities in computerized accounting systems may have characteristics that differ from manual control activities designed to accomplish the same control objectives.

Accepted Answer

A) True 
 B)False

Question 7

In vouching,an item of financial information is selected from an account,and then the audit team goes _____________________________ through the accounting and control system to find the ____________________________.

Accepted Answer

backward;

Question 8

Before accepting an engagement to audit a new client,an auditor is required to

Accepted Answer

A)  Make inquiries of the predecessor auditor after obtaining the consent of the prospective client. 
B)  Obtain the prospective client's signature to the engagement letter. 
C)  Prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. 
D)  Discuss the management representation letter with the prospective client's audit committee. 
A)  Make inquiries of the predecessor auditor after obtaining the consent of the prospective client. 
B)  Obtain the prospective client's signature to the engagement letter. 
C)  Prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. 
D)  Discuss the management representation letter with the prospective client's audit committee.

Question 9

This year,Blakeney Enterprises engaged a new auditor who must

Accepted Answer

A)  Attempt to communicate with the predecessor auditor before accepting the engagement. 
B)  Review the predecessor's audit documentation if the audit is to be in accordance with GAAS. 
C)  Seek the SEC's permission to accept the engagement if Blakeney is publicly owned. 
D)  Reject the engagement if the change in auditors resulted from a dispute with the predecessor. 
A)  Attempt to communicate with the predecessor auditor before accepting the engagement. 
B)  Review the predecessor's audit documentation if the audit is to be in accordance with GAAS. 
C)  Seek the SEC's permission to accept the engagement if Blakeney is publicly owned. 
D)  Reject the engagement if the change in auditors resulted from a dispute with the predecessor.

Question 10

The pre-engagement activities of an audit engagement for a public accounting firm do not include

Accepted Answer

A)  Evaluating the public accounting firm's independence with regard to the audit engagement. 
B)  Obtaining predecessor audit documentation. 
C)  Obtaining an engagement letter. 
D)  Ensuring that there are sufficient firm resources to complete the engagement on a timely basis. 
A)  Evaluating the public accounting firm's independence with regard to the audit engagement. 
B)  Obtaining predecessor audit documentation. 
C)  Obtaining an engagement letter. 
D)  Ensuring that there are sufficient firm resources to complete the engagement on a timely basis.

Question 11

Which of the following is not one of the four major cycles?

Accepted Answer

A)  Revenue and cash collection. 
B)  Acquisition and expenditure. 
C)  Cash receipts and disbursements. 
D)  Financing and investing. 
A)  Revenue and cash collection. 
B)  Acquisition and expenditure. 
C)  Cash receipts and disbursements. 
D)  Financing and investing.

Question 12

When evaluating whether accounting estimates made by management are reasonable,the audit team would be most interested in which of the following?

Accepted Answer

A)  Key factors that are consistent with prior periods. 
B)  Assumptions that are similar to industry guidelines. 
C)  Measurements that are objective and not susceptible to bias. 
D)  Evidence of a conservative systematic bias. 
A)  Key factors that are consistent with prior periods. 
B)  Assumptions that are similar to industry guidelines. 
C)  Measurements that are objective and not susceptible to bias. 
D)  Evidence of a conservative systematic bias.

Question 13

________________________________ are composed of independent,outside members of the board of directors (those not involved in the company's day-to-day operations)who can provide a buffer between the public accounting firm and management.

Accepted Answer

The answer of ________________________________ are composed of independent,outside members of...

Question 14

Computer-assisted audit techniques (CAATs)could not be used for which of the following audit tasks?

Accepted Answer

A)  Testing calculations and making computations. 
B)  Evaluating control risk assessment. 
C)  Summarizing, resequencing, and reformatting data. 
D)  Comparing audit evidence from manual audit procedures to company needs. 
A)  Testing calculations and making computations. 
B)  Evaluating control risk assessment. 
C)  Summarizing, resequencing, and reformatting data. 
D)  Comparing audit evidence from manual audit procedures to company needs.

Question 15

An auditor selected items for test counts from a client's inventory listing before observing the client's physical inventory at the warehouse.The auditor then found the items selected at the warehouse and counted them.This procedure most likely obtained evidence concerning management's assertion of

Accepted Answer

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

Question 16

Audit _____________________________ can often be realized by working in tandem with _____________________________ auditors.

Accepted Answer

efficiency

Question 17

For each of the descriptions 1-6,match the correct word or phrase from A-H.

Accepted Answer

1.F; 2.C;

Question 18

Auditors cannot place complete reliance on _____________________________________ to the exclusion of other audit procedures.

Accepted Answer

The answer of Auditors cannot place complete reliance on _____________________________________...

Question 19

The firm of Banta,Brown,and Burgess,CPAs,requires that audit documentation contain the initials of the preparer and the reviewer in the top right-hand corner.This procedure provides evidence of professional concern regarding which generally accepted auditing standard?

Accepted Answer

A)  Independence. 
B)  Adequate technical competence and capabilities. 
C)  Adequate planning and supervision. 
D)  Gathering sufficient competent evidence. 
A)  Independence. 
B)  Adequate technical competence and capabilities. 
C)  Adequate planning and supervision. 
D)  Gathering sufficient competent evidence.

Question 20

A(n)________________________________________________ is recommended as a means of reducing risk of misunderstanding between a client and auditor.

Accepted Answer

The answer of A(n)________________________________________________ is recommended as a means of...

Errors in data processed in a batch computer system may not be detected immediately because

The degree of computer complexity and use may influence the nature,timing,and extent of audit procedures.

The idea of the cycle approach is to group accounts together by

An auditor would least likely use computer software to

Control activities in computerized accounting systems may have characteristics that differ from manual control activities designed to accomplish the same control objectives.

In vouching,an item of financial information is selected from an account,and then the audit team goes _ through the accounting and control system to find the .

Before accepting an engagement to audit a new client,an auditor is required to

This year,Blakeney Enterprises engaged a new auditor who must

The pre-engagement activities of an audit engagement for a public accounting firm do not include

Which of the following is not one of the four major cycles?

When evaluating whether accounting estimates made by management are reasonable,the audit team would be most interested in which of the following?

________________________________ are composed of independent,outside members of the board of directors (those not involved in the company's day-to-day operations)who can provide a buffer between the public accounting firm and management.

Computer-assisted audit techniques (CAATs)could not be used for which of the following audit tasks?

An auditor selected items for test counts from a client's inventory listing before observing the client's physical inventory at the warehouse.The auditor then found the items selected at the warehouse and counted them.This procedure most likely obtained evidence concerning management's assertion of

Audit _ can often be realized by working in tandem with _ auditors.

For each of the descriptions 1-6,match the correct word or phrase from A-H.

Auditors cannot place complete reliance on _____________________________________ to the exclusion of other audit procedures.

The firm of Banta,Brown,and Burgess,CPAs,requires that audit documentation contain the initials of the preparer and the reviewer in the top right-hand corner.This procedure provides evidence of professional concern regarding which generally accepted auditing standard?

A(n)________________________________________________ is recommended as a means of reducing risk of misunderstanding between a client and auditor.

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

Errors in data processed in a batch computer system may not be detected immediately because

The degree of computer complexity and use may influence the nature,timing,and extent of audit procedures.

The idea of the cycle approach is to group accounts together by

An auditor would least likely use computer software to

Control activities in computerized accounting systems may have characteristics that differ from manual control activities designed to accomplish the same control objectives.

In vouching,an item of financial information is selected from an account,and then the audit team goes _____________________________ through the accounting and control system to find the ____________________________.

Before accepting an engagement to audit a new client,an auditor is required to

This year,Blakeney Enterprises engaged a new auditor who must

The pre-engagement activities of an audit engagement for a public accounting firm do not include

Which of the following is not one of the four major cycles?

When evaluating whether accounting estimates made by management are reasonable,the audit team would be most interested in which of the following?

________________________________ are composed of independent,outside members of the board of directors (those not involved in the company's day-to-day operations)who can provide a buffer between the public accounting firm and management.

Computer-assisted audit techniques (CAATs)could not be used for which of the following audit tasks?

An auditor selected items for test counts from a client's inventory listing before observing the client's physical inventory at the warehouse.The auditor then found the items selected at the warehouse and counted them.This procedure most likely obtained evidence concerning management's assertion of

Audit _____________________________ can often be realized by working in tandem with _____________________________ auditors.

For each of the descriptions 1-6,match the correct word or phrase from A-H.

Auditors cannot place complete reliance on _____________________________________ to the exclusion of other audit procedures.

The firm of Banta,Brown,and Burgess,CPAs,requires that audit documentation contain the initials of the preparer and the reviewer in the top right-hand corner.This procedure provides evidence of professional concern regarding which generally accepted auditing standard?

A(n)________________________________________________ is recommended as a means of reducing risk of misunderstanding between a client and auditor.

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

In vouching,an item of financial information is selected from an account,and then the audit team goes _ through the accounting and control system to find the .

Audit _ can often be realized by working in tandem with _ auditors.