Question 1

Which of the following presumptions is correct about the reliability of audit evidence?

Accepted Answer

A)  Information obtained indirectly from outside sources is the most reliable form of audit evidence. 
B)  To be reliable, audit evidence should be convincing rather than persuasive. 
C)  Reliability of audit evidence refers to the amount of corroborative evidence obtained. 
D)  An effective system of internal control provides more assurance about the reliability of audit evidence. 
A)  Information obtained indirectly from outside sources is the most reliable form of audit evidence. 
B)  To be reliable, audit evidence should be convincing rather than persuasive. 
C)  Reliability of audit evidence refers to the amount of corroborative evidence obtained. 
D)  An effective system of internal control provides more assurance about the reliability of audit evidence.

Question 2

Which of the following situations would provide auditors with a lower level of detection risk?

Accepted Answer

A)  Inspecting an item rather than directly confirming the existence of that item with third parties. 
B)  Evaluating a smaller number of transactions or components of an account balance. 
C)  Relying extensively on verbal inquiry of client personnel in gathering evidence. 
D)  Examining an account that is more susceptible to misstatement because of complex calculations and accounting methods. 
A)  Inspecting an item rather than directly confirming the existence of that item with third parties. 
B)  Evaluating a smaller number of transactions or components of an account balance. 
C)  Relying extensively on verbal inquiry of client personnel in gathering evidence. 
D)  Examining an account that is more susceptible to misstatement because of complex calculations and accounting methods.

Question 3

Substantive procedures performed by the audit team are most closely related to the risk of material misstatement.

Accepted Answer

A) True 
 B)False

Question 4

The concept of independence in _____________________________ relates to financial statement users' perceptions of auditors' independence.

Accepted Answer

The answer of The concept of independence in _____________________________ relates...

Question 5

(Appendix)The attestation standards do not require the attestation report to include a statement that

Accepted Answer

A)  Provides a conclusion whether the subject matter is presented in conformity with established or stated criteria. 
B)  Indicates that the practitioner has significant reservations about the engagement. 
C)  Identifies the subject matter or assertion being reported on. 
D)  Indicates that the accountant assumes no responsibility to update the report. 
A)  Provides a conclusion whether the subject matter is presented in conformity with established or stated criteria. 
B)  Indicates that the practitioner has significant reservations about the engagement. 
C)  Identifies the subject matter or assertion being reported on. 
D)  Indicates that the accountant assumes no responsibility to update the report.

Question 6

Control risk is the probability that a material misstatement (error or fraud)could occur and not be prevented or detected on a timely basis by the auditors' substantive procedures.

Accepted Answer

A) True 
 B)False

Question 7

Attestation standards provide guidance for a wide variety of engagements different in scope than an audit.

Accepted Answer

A) True 
 B)False

Question 8

As it relates to audit evidence,appropriateness refers to the

Accepted Answer

A)  Originality of evidence gathered. 
B)  Quality of evidence gathered. 
C)  Quantity of evidence gathered. 
D)  Timeliness of evidence gathered. 
A)  Originality of evidence gathered. 
B)  Quality of evidence gathered. 
C)  Quantity of evidence gathered. 
D)  Timeliness of evidence gathered.

Question 9

To exercise due care,an accountant should

Accepted Answer

A)  Take continuing professional education classes. 
B)  Report whether the financial statements are in accordance with GAAP. 
C)  Gather enough audit evidence to have complete assurance that there is enough support for the opinion on the financial statements. 
D)  Conduct the engagement in accordance with GAAS and ensure that the engagement is completed on a timely basis. 
A)  Take continuing professional education classes. 
B)  Report whether the financial statements are in accordance with GAAP. 
C)  Gather enough audit evidence to have complete assurance that there is enough support for the opinion on the financial statements. 
D)  Conduct the engagement in accordance with GAAS and ensure that the engagement is completed on a timely basis.

Question 10

Which of the following is least related to the concept of independence in appearance?

Accepted Answer

A)  The auditors' objectivity and ability to act impartially toward the client. 
B)  The perceptions of individuals who rely on the financial statements and auditors' opinion on the financial statements. 
C)  The ownership of a financial interest in a client by the auditor. 
D)  The employment of the auditor's family member in an important position with the client. 
A)  The auditors' objectivity and ability to act impartially toward the client. 
B)  The perceptions of individuals who rely on the financial statements and auditors' opinion on the financial statements. 
C)  The ownership of a financial interest in a client by the auditor. 
D)  The employment of the auditor's family member in an important position with the client.

Question 11

The word appropriateness refers to the number of transactions or components of an account balance examined by auditors.

Accepted Answer

A) True 
 B)False

Question 12

To ensure that a public accounting firm is providing services that conform to professional standards,the firm should follow

Accepted Answer

A)  The performance principle of GAAS. 
B)  Its system of quality control. 
C)  Generally accepted accounting principles. 
D)  International auditing standards. 
A)  The performance principle of GAAS. 
B)  Its system of quality control. 
C)  Generally accepted accounting principles. 
D)  International auditing standards.

Question 13

The __________________________________ Act of 2002 created the Public Company Accounting Oversight Board.

Accepted Answer

The answer of The __________________________________ Act of 2002 created the...

Question 14

Ordinarily,what source of evidence should least affect audit conclusions?

Accepted Answer

A)  External documentary evidence. 
B)  Inquiry of management. 
C)  Documentation prepared by the audit team. 
D)  Inquiry of entity legal counsel. 
A)  External documentary evidence. 
B)  Inquiry of management. 
C)  Documentation prepared by the audit team. 
D)  Inquiry of entity legal counsel.

Question 15

Which of the following statements is generally correct about the appropriateness of audit evidence?

Accepted Answer

A)  Auditors' direct personal knowledge obtained through observation and inspection is more persuasive than information obtained indirectly from independent outside sources. 
B)  To be reliable, audit evidence must be either valid or relevant but need not be both. 
C)  Client accounting data alone may be considered sufficient appropriate audit evidence to issue an unqualified opinion on client financial statements. 
D)  Appropriateness of audit evidence refers to the amount of corroborative evidence to be obtained. 
A)  Auditors' direct personal knowledge obtained through observation and inspection is more persuasive than information obtained indirectly from independent outside sources. 
B)  To be reliable, audit evidence must be either valid or relevant but need not be both. 
C)  Client accounting data alone may be considered sufficient appropriate audit evidence to issue an unqualified opinion on client financial statements. 
D)  Appropriateness of audit evidence refers to the amount of corroborative evidence to be obtained.

Question 16

Which of the following combinations would provide the auditor the most persuasive evidence?

Accepted Answer

A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D 
A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D

Question 17

Which of the following categories of principles is most closely related to gathering audit evidence?

Accepted Answer

A)  Performance. 
B)  Reasonable assurance. 
C)  Reporting. 
D)  Responsibilities. 
A)  Performance. 
B)  Reasonable assurance. 
C)  Reporting. 
D)  Responsibilities.

Question 18

Written corroboration of information received verbally from management is referred to as ___________________________________________________.

Accepted Answer

written representati

Question 19

The reporting principle relates to a firm's system of quality control criteria for conducting an audit.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a concept from the performance principle under generally accepted auditing standards?

Accepted Answer

A)  The auditor must plan the work and properly supervise any assistants. 
B)  The auditor must express an opinion in accordance with the auditor's findings. 
C)  The auditor must obtain sufficient appropriate evidence about whether material misstatements exist. 
D)  The auditor must determine and apply an appropriate materiality level throughout the audit. 
A)  The auditor must plan the work and properly supervise any assistants. 
B)  The auditor must express an opinion in accordance with the auditor's findings. 
C)  The auditor must obtain sufficient appropriate evidence about whether material misstatements exist. 
D)  The auditor must determine and apply an appropriate materiality level throughout the audit.

Which of the following presumptions is correct about the reliability of audit evidence?

Which of the following situations would provide auditors with a lower level of detection risk?

Substantive procedures performed by the audit team are most closely related to the risk of material misstatement.

The concept of independence in _____________________________ relates to financial statement users' perceptions of auditors' independence.

(Appendix)The attestation standards do not require the attestation report to include a statement that

Control risk is the probability that a material misstatement (error or fraud)could occur and not be prevented or detected on a timely basis by the auditors' substantive procedures.

Attestation standards provide guidance for a wide variety of engagements different in scope than an audit.

As it relates to audit evidence,appropriateness refers to the

To exercise due care,an accountant should

Which of the following is least related to the concept of independence in appearance?

The word appropriateness refers to the number of transactions or components of an account balance examined by auditors.

To ensure that a public accounting firm is providing services that conform to professional standards,the firm should follow

The __________________________________ Act of 2002 created the Public Company Accounting Oversight Board.

Ordinarily,what source of evidence should least affect audit conclusions?

Which of the following statements is generally correct about the appropriateness of audit evidence?

Which of the following combinations would provide the auditor the most persuasive evidence?

Which of the following categories of principles is most closely related to gathering audit evidence?

Written corroboration of information received verbally from management is referred to as ___________________________________________________.

The reporting principle relates to a firm's system of quality control criteria for conducting an audit.

Which of the following is not a concept from the performance principle under generally accepted auditing standards?

Auditing and Assurance Services

Engagement Planning

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 2: Professional Standards

Which of the following presumptions is correct about the reliability of audit evidence?

Which of the following situations would provide auditors with a lower level of detection risk?

Substantive procedures performed by the audit team are most closely related to the risk of material misstatement.

The concept of independence in _____________________________ relates to financial statement users' perceptions of auditors' independence.

(Appendix)The attestation standards do not require the attestation report to include a statement that

Control risk is the probability that a material misstatement (error or fraud)could occur and not be prevented or detected on a timely basis by the auditors' substantive procedures.

Attestation standards provide guidance for a wide variety of engagements different in scope than an audit.

As it relates to audit evidence,appropriateness refers to the

To exercise due care,an accountant should

Which of the following is least related to the concept of independence in appearance?

The word appropriateness refers to the number of transactions or components of an account balance examined by auditors.

To ensure that a public accounting firm is providing services that conform to professional standards,the firm should follow

The __________________________________ Act of 2002 created the Public Company Accounting Oversight Board.

Ordinarily,what source of evidence should least affect audit conclusions?

Which of the following statements is generally correct about the appropriateness of audit evidence?

Which of the following combinations would provide the auditor the most persuasive evidence?

Which of the following categories of principles is most closely related to gathering audit evidence?

Written corroboration of information received verbally from management is referred to as ___________________________________________________.

The reporting principle relates to a firm's system of quality control criteria for conducting an audit.

Which of the following is not a concept from the performance principle under generally accepted auditing standards?

Auditing and Assurance Services

Engagement Planning

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