Exam 2: Professional Standards

(Appendix)Which of the following is a conceptual difference between attestation standards and generally accepted auditing standards?

To properly plan the audit,auditors should be engaged before the client's fiscal year-end or date of the ______________________________.

Under the ____________________________ principle of GAAS,the auditor expresses an opinion in accordance with the auditor's findings.

Evidence is considered appropriate when it is both valid and relevant.

Which of the following types of auditors' reports does not require an explanatory paragraph to support the opinion?

The performance principle sets forth the quality criteria for conducting an audit.

The preparation of an audit plan prior to the beginning of fieldwork is appropriately considered documentation of

Auditing standards are considered to be

Which of the following opinions would be issued if auditors believed that the entity's financial statements were not presented in conformity with GAAP?

Which of the following would most likely be a violation of the independence requirement found in the responsibilities principle under generally accepted auditing standards?

Which of the following is true with respect to PCAOB inspections of accounting firms?

Alan Fallon was recently promoted to senior accountant.He was put in charge of the Mellow Markets audit because of his experience with other grocery clients.Mellow Markets has a small,but growing,chain of natural food stores.This is the first year Mellow Markets has been audited.Because of their growth,Mellow Markets needs additional capital and intends to use its audited financial statements to secure a loan. Fallon has been assigned two inexperienced staff assistants for the audit.Because this is his first engagement as a senior,he intends to bring the job in on budget.To save time,he provided his assistants with a copy of the audit plan for Happy Time Food Stores.He told them that this would make things go more quickly.He also told them that he could not spend much time with them at the client's place of business because "my time is billed out at such a high rate,we'll go right over budget." However,he did call them once a day from another audit on which he was working. After beginning their work,the assistants told Fallon that the audit plan did not always match what they found at Mellow Markets.Fallon responded,"Just cross out whatever is not relevant in the audit plan and don't add anything - it will only make us go over the budget." When Fallon came to the client near the end of fieldwork,one assistant was concerned that no inventory observation was done at the out-of-town locations of Mellow Markets (the audit plan had stipulated that inventory should be observed for in-town stores only).Happy Time had only one out-of-town location while three of Mellow Markets' five stores were in other cities.Fallon told the assistant to get inventory sheets from the client for the other stores and added,"Make sure that the inventory balance in the general ledger agrees with the total for all the inventory sheets." The next day,Fallon reviewed all audit documentation and submitted the job for review by the manager. Required: 1.Describe the performance principle of GAAS. 2.Do you believe that the Mellow Markets audit complies with the performance principle? Explain.

Which of the following statements describes an appropriate relationship with respect to the reliability of audit evidence?

Which of the following presumptions does not relate to the reliability of audit evidence?

The purpose of a system of quality control is to provide reasonable assurance that the firm and its personnel issue reports that are appropriate under the circumstances.

Under the reporting principle of GAAS,the report will contain either an expression of ______________________ regarding the financial statements,taken as a whole,or an assertion to the effect that an opinion cannot be expressed.

For each of the matters below,indicate through the appropriate letter the fundamental principle to which the matter is most closely related. A. Responsibilities principle B. Performance principle C. Reporting principle

Audit evidence is usually considered sufficient when

Under the performance principle,auditors are required to provide absolute assurance that the client's financial statements do not contain material misstatements.

Which of the following would normally be considered earliest in the audit examination?