Question 1

The three fundamental principles underlying GAAS include all of the following,except:

Accepted Answer

A) General principle. 
B) Performance principle. 
C) Reporting principle. 
D) Responsibilities principle. 
A) General principle. 
B) Performance principle. 
C) Reporting principle. 
D) Responsibilities principle. A

Question 2

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 of higher quality 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 unmodified 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 of higher quality 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 unmodified opinion on client financial statements. 
D) Appropriateness of audit evidence refers to the amount of corroborative evidence to be obtained. A

Question 3

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

Accepted Answer

A) Unmodified opinion. 
B) Adverse opinion. 
C) Qualified opinion. 
D) Disclaimer of opinion. 
A) Unmodified opinion. 
B) Adverse opinion. 
C) Qualified opinion. 
D) Disclaimer of opinion. A

Question 4

Auditors try to achieve independence in appearance in order to:

Accepted Answer

A) Maintain public confidence in the profession. 
B) Become independent in fact. 
C) Comply with the responsibilities principle. 
D) Maintain an unbiased mental attitude. 
A) Maintain public confidence in the profession. 
B) Become independent in fact. 
C) Comply with the responsibilities principle. 
D) Maintain an unbiased mental attitude.

Question 5

The relevant ethical requirements relating to due care,professional skepticism,and professional judgment,are responsibilities of the auditor at which stage(s)of the audit? $$\begin{array} { c c c } 
& \text { Risk } & \text { Alidit } \
& \text { Assessment } & \text { Evidence } \
\text { A } & \text { Yes } & \text { No } \
\text { B.} &\text {  Yes } & \text { Yes } \
\text { C. } &\text { No }  & \text { Yes } \
\text { D. } & \text { No }& \text { No }
\end{array}$$

Accepted Answer

The answer of The relevant ethical requirements relating to due...

Question 6

A level of performance that would be exercised by reasonable auditors in similar circumstances is referred to as

Accepted Answer

A) Due care 
B) Independence 
C) Professional judgment 
D) Professional skepticism 
A) Due care 
B) Independence 
C) Professional judgment 
D) Professional skepticism

Question 7

Control risk is

Accepted Answer

A) The probability that a material misstatement could not be prevented or detected by the entity's internal control policies and procedures. 
B) The probability that a material misstatement could occur and not be detected by auditors' procedures. 
C) The risk that auditors will not be able to complete the audit on a timely basis. 
D) The risk that auditors will not properly control the staff on the audit engagement. 
A) The probability that a material misstatement could not be prevented or detected by the entity's internal control policies and procedures. 
B) The probability that a material misstatement could occur and not be detected by auditors' procedures. 
C) The risk that auditors will not be able to complete the audit on a timely basis. 
D) The risk that auditors will not properly control the staff on the audit engagement.

Question 8

Which of the following is not true with respect to the concept of reasonable assurance?

Accepted Answer

A) Reasonable assurance allows for mistakes and misinterpretations by the audit team throughout the examination. 
B) The nature of many audit procedures is such that they cannot always be relied upon to detect misstatements. 
C) Audit teams should evaluate all transactions and components of an account balance or class of transactions. 
D) Auditors should control the overall risk in an audit to an acceptably low level. 
A) Reasonable assurance allows for mistakes and misinterpretations by the audit team throughout the examination. 
B) The nature of many audit procedures is such that they cannot always be relied upon to detect misstatements. 
C) Audit teams should evaluate all transactions and components of an account balance or class of transactions. 
D) Auditors should control the overall risk in an audit to an acceptably low level.

Question 9

Which reporting options do auditors have if the client's financial statements are not presented according to the applicable financial framework (e.g.,GAAP,IFRS)?

Accepted Answer

A) Unmodified opinion or disclaimer of opinion. 
B) Qualified opinion or disclaimer of opinion. 
C) Unmodified opinion or adverse opinion. 
D) Qualified opinion or adverse opinion. 
A) Unmodified opinion or disclaimer of opinion. 
B) Qualified opinion or disclaimer of opinion. 
C) Unmodified opinion or adverse opinion. 
D) Qualified opinion or adverse opinion.

Question 10

Which of the following concepts is least related to the risk of material misstatement?

Accepted Answer

A) Control risk. 
B) Detection risk. 
C) Inherent risk. 
D) Materiality. 
A) Control risk. 
B) Detection risk. 
C) Inherent risk. 
D) Materiality.

Question 11

The concept of recognizes that a GAAS audit may fail to detect all material misstatements.

Accepted Answer

A) Absolute assurance. 
B) Due care. 
C) Reasonable assurance. 
D) Risk of material misstatement. 
A) Absolute assurance. 
B) Due care. 
C) Reasonable assurance. 
D) Risk of material misstatement.

Question 12

Which of the following statements is true with respect to the quality of audit evidence?

Accepted Answer

A) Quality is related to the relevance of evidence,but not the reliability of evidence. 
B) Evidence is considered of higher quality when gathered prior to year-end than following year-end. 
C) Evidence obtained under environments of stronger internal control is of higher quality than evidence obtained under environments of weaker internal control. 
D) In evaluating quality,sufficiency of evidence is of greater importance than appropriateness of evidence. 
A) Quality is related to the relevance of evidence,but not the reliability of evidence. 
B) Evidence is considered of higher quality when gathered prior to year-end than following year-end. 
C) Evidence obtained under environments of stronger internal control is of higher quality than evidence obtained under environments of weaker internal control. 
D) In evaluating quality,sufficiency of evidence is of greater importance than appropriateness of evidence.

Question 13

Which of the following is an element of a system of quality control that should be considered by a public accounting firm in establishing its quality control policies and procedures?

Accepted Answer

A) Lending credibility to a client's financial statements. 
B) Using statistical sampling techniques. 
C) Acceptance and continuance of client relationships and specific engagements. 
D) Membership in the Center for Public Company Audit Firms. 
A) Lending credibility to a client's financial statements. 
B) Using statistical sampling techniques. 
C) Acceptance and continuance of client relationships and specific engagements. 
D) Membership in the Center for Public Company Audit Firms.

Question 14

Which of the following could serve as a source of professional guidance in the audit of a public entity? $$\begin{array} { c c c } 
&\text { Auditing Standards } & \text { Statements on Auditing } \
&\text { issued by the } & \text { Standards issued by the } \
& \text { PCAOB } & \text { ASB } \

\text { A. } &\text { Yes } & \text { No } \
\text { B. } & \text { Yes } & \text { Yes } \
\text { C. }&\text {  No } & \text { Yes }\
\text { D. }&\text {  No } & \text {No }\
\end{array}$$

Accepted Answer

The answer of Which of the following could serve as...

Question 15

PCAOB inspections are conducted by

Accepted Answer

A) Individuals selected by the PCAOB who are not current employees of public accounting firms. 
B) Another public accounting firm selected by the firm being inspected. 
C) Current employees of another public accounting firm selected by the PCAOB. 
D) The AICPA's Public Oversight Board. 
A) Individuals selected by the PCAOB who are not current employees of public accounting firms. 
B) Another public accounting firm selected by the firm being inspected. 
C) Current employees of another public accounting firm selected by the PCAOB. 
D) The AICPA's Public Oversight Board.

Question 16

All of the following are examples of procedures a firm can use to monitor its system of quality control except:

Accepted Answer

A) Discussions with firm personnel. 
B) Conducting reviews of engagement documentation. 
C) Devoting sufficient resources to developing a system of quality control. 
D) Assessing compliance with independence policies and procedures. 
A) Discussions with firm personnel. 
B) Conducting reviews of engagement documentation. 
C) Devoting sufficient resources to developing a system of quality control. 
D) Assessing compliance with independence policies and procedures.

Question 17

Which of the following procedures would provide the most reliable audit evidence?

Accepted Answer

A) Inquiries of the client's accounting staff held in private. 
B) Inspection of pre-numbered client shipping documents. 
C) Inspection of bank statements obtained directly from the client's financial institution. 
D) Analytical procedures performed by auditors on the client's trial balance. 
A) Inquiries of the client's accounting staff held in private. 
B) Inspection of pre-numbered client shipping documents. 
C) Inspection of bank statements obtained directly from the client's financial institution. 
D) Analytical procedures performed by auditors on the client's trial balance.

Question 18

The Public Company Accounting Oversight Board was established by which of the following?

Accepted Answer

A) The Financial Accounting Standards Board. 
B) The American Institute of Certified Public Accountants. 
C) The Sarbanes-Oxley Act of 2002. 
D) The International Accounting Standards Board. 
A) The Financial Accounting Standards Board. 
B) The American Institute of Certified Public Accountants. 
C) The Sarbanes-Oxley Act of 2002. 
D) The International Accounting Standards Board.

Question 19

The responsibilities principle under generally accepted auditing standards does not include which of the following?

Accepted Answer

A) Competence and capabilities. 
B) Independent attitude. 
C) Due care. 
D) Planning and supervision. 
A) Competence and capabilities. 
B) Independent attitude. 
C) Due care. 
D) Planning and supervision.

Question 20

The audit failures of both Enron and WorldCom were examples in which the leadership responsibilities for quality work within the accounting firm were overshadowed by fears that losing a key client would

Accepted Answer

A) Result in shareholder losses from reduced company profitability. 
B) Require additional audit procedures and increase the fees paid by the companies to the accounting firm. 
C) Negatively influence the results of the firm's inspection. 
D) Negatively impact individual auditors' performance evaluations. 
A) Result in shareholder losses from reduced company profitability. 
B) Require additional audit procedures and increase the fees paid by the companies to the accounting firm. 
C) Negatively influence the results of the firm's inspection. 
D) Negatively impact individual auditors' performance evaluations.

The three fundamental principles underlying GAAS include all of the following,except:

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

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

Auditors try to achieve independence in appearance in order to:

The relevant ethical requirements relating to due care,professional skepticism,and professional judgment,are responsibilities of the auditor at which stage(s)of the audit? Risk Alidit Assessment Evidence A Yes No B. Yes Yes C. No Yes D. No No

A level of performance that would be exercised by reasonable auditors in similar circumstances is referred to as

Control risk is

Which of the following is not true with respect to the concept of reasonable assurance?

Which reporting options do auditors have if the client's financial statements are not presented according to the applicable financial framework (e.g.,GAAP,IFRS)?

Which of the following concepts is least related to the risk of material misstatement?

The concept of recognizes that a GAAS audit may fail to detect all material misstatements.

Which of the following statements is true with respect to the quality of audit evidence?

Which of the following is an element of a system of quality control that should be considered by a public accounting firm in establishing its quality control policies and procedures?

Which of the following could serve as a source of professional guidance in the audit of a public entity? Auditing Standards Statements on Auditing issued by the Standards issued by the PCAOB ASB A. Yes No B. Yes Yes C. No Yes D. No No

PCAOB inspections are conducted by

All of the following are examples of procedures a firm can use to monitor its system of quality control except:

Which of the following procedures would provide the most reliable audit evidence?

The Public Company Accounting Oversight Board was established by which of the following?

The responsibilities principle under generally accepted auditing standards does not include which of the following?

The audit failures of both Enron and WorldCom were examples in which the leadership responsibilities for quality work within the accounting firm were overshadowed by fears that losing a key client would

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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

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Internal Audits, Governmental Audits, and Fraud Examinations

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Exam 2: Professional Standards

The three fundamental principles underlying GAAS include all of the following,except:

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

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

Auditors try to achieve independence in appearance in order to:

The relevant ethical requirements relating to due care,professional skepticism,and professional judgment,are responsibilities of the auditor at which stage(s)of the audit? Risk Alidit Assessment Evidence A Yes No B. Yes Yes C. No Yes D. No No

A level of performance that would be exercised by reasonable auditors in similar circumstances is referred to as

Control risk is

Which of the following is not true with respect to the concept of reasonable assurance?

Which reporting options do auditors have if the client's financial statements are not presented according to the applicable financial framework (e.g.,GAAP,IFRS)?

Which of the following concepts is least related to the risk of material misstatement?

The concept of recognizes that a GAAS audit may fail to detect all material misstatements.

Which of the following statements is true with respect to the quality of audit evidence?

Which of the following is an element of a system of quality control that should be considered by a public accounting firm in establishing its quality control policies and procedures?

Which of the following could serve as a source of professional guidance in the audit of a public entity? Auditing Standards Statements on Auditing issued by the Standards issued by the PCAOB ASB A. Yes No B. Yes Yes C. No Yes D. No No

PCAOB inspections are conducted by

All of the following are examples of procedures a firm can use to monitor its system of quality control except:

Which of the following procedures would provide the most reliable audit evidence?

The Public Company Accounting Oversight Board was established by which of the following?

The responsibilities principle under generally accepted auditing standards does not include which of the following?

The audit failures of both Enron and WorldCom were examples in which the leadership responsibilities for quality work within the accounting firm were overshadowed by fears that losing a key client would

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 Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters