Question 1

A second-partner review of the working papers and financial statements is performed to ensure that the ________.

Accepted Answer

A) to-do lists are reviewed and cleared 
B) audit program procedures are signed off as evidence of completion 
C) tick-mark notations are cleared 
D) audit work meets the quality standards of the firm 
A) to-do lists are reviewed and cleared 
B) audit program procedures are signed off as evidence of completion 
C) tick-mark notations are cleared 
D) audit work meets the quality standards of the firm

Question 2

Toward the end of an audit,it is not necessary that external auditors consider the revenue and expense accounts that were not audited in connection with balance sheet accounts.

Accepted Answer

A) True 
 B)False

Question 3

The audit of the year-end franchise revenue balances is normally conducted in conjunction with which related account group?

Accepted Answer

A) Fixed assets,receivables. 
B) Receivables,intangibles. 
C) Receivables,investments. 
D) Revenues,receivables. 
A) Fixed assets,receivables. 
B) Receivables,intangibles. 
C) Receivables,investments. 
D) Revenues,receivables.

Question 4

A type of subsequent event that provides new information regarding financial conditions that existed at the date of the balance sheet requires only footnote disclosure.

Accepted Answer

A) True 
 B)False

Question 5

In the audit of revenue and expense accounts,a number of accounts will have been audited in connection with related balance sheet accounts.For each of the revenue and expense accounts listed in column A,indicate the related balance sheet account(s).If no account is specifically related,indicate if the account should be analyzed in detail or simply compared to the balance in the previous year.

Accepted Answer

The answer of In the audit of revenue and expense...

Question 6

Auditors have a responsibility to perform audit procedures ________.

Accepted Answer

A) after the report date 
B) until the report date 
C) after the report issuance date 
D) after the report date for events between the report date and a later dual dated event 
A) after the report date 
B) until the report date 
C) after the report issuance date 
D) after the report date for events between the report date and a later dual dated event

Question 7

The primary source of information that the auditor can use in corroborating information about litigation,claims,and assessments is the ________.

Accepted Answer

A) client's lawyer 
B) court records 
C) client's management 
D) independent auditor 
A) client's lawyer 
B) court records 
C) client's management 
D) independent auditor

Question 8

Analytical procedures are used during the overall evaluation of the financial statements.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following can illustrate a subsequent event that requires disclosure but not adjustment?

Accepted Answer

A) Settlement of long outstanding litigation. 
B) Collection of a customer debt that had been written off. 
C) Loss of inventory as a result of a flood occurring after year-end. 
D) An additional tax assessment on prior income. 
A) Settlement of long outstanding litigation. 
B) Collection of a customer debt that had been written off. 
C) Loss of inventory as a result of a flood occurring after year-end. 
D) An additional tax assessment on prior income.

Question 10

Lawyers' letters should be written ________.

Accepted Answer

A) at the interim audit 
B) anytime before the audit report date 
C) anytime before the balance sheet date 
D) at the final stages of the audit work 
A) at the interim audit 
B) anytime before the audit report date 
C) anytime before the balance sheet date 
D) at the final stages of the audit work

Question 11

A major means by which an auditor obtains evidence about material contingencies is ________.

Accepted Answer

A) examining documents in the client's possession concerning contingencies 
B) enquiring and discussing them with management 
C) obtaining a response from the client's lawyer to the client's letter of enquiry 
D) reading minutes of shareholders' meeting 
A) examining documents in the client's possession concerning contingencies 
B) enquiring and discussing them with management 
C) obtaining a response from the client's lawyer to the client's letter of enquiry 
D) reading minutes of shareholders' meeting

Question 12

Settlement of litigation when the event giving rise to the claim took place after the balance sheet date requires financial statement disclosure only.

Accepted Answer

A) True 
 B)False

Question 13

A working paper reference index reflects ________.

Accepted Answer

A) all balance sheet accounts 
B) all income statement accounts 
C) all trial balance accounts 
D) all capital assets 
A) all balance sheet accounts 
B) all income statement accounts 
C) all trial balance accounts 
D) all capital assets

Question 14

Why do auditors ask about related party transactions and where do they typically do this?

Accepted Answer

Auditors ask about involvement with rela

Question 15

Auditors must complete phases of an audit after the balance sheet date.This subsequent period extends from the balance sheet date to the date of the ________.

Accepted Answer

A) audit report 
B) final review of the audit working papers 
C) public issuance of the financial statements 
D) delivery of the audit report to the client 
A) audit report 
B) final review of the audit working papers 
C) public issuance of the financial statements 
D) delivery of the audit report to the client

Question 16

An auditor is most likely to suspect the existence of undisclosed related parties by noticing _______.

Accepted Answer

A) large-sales transactions 
B) abnormally long collection terms for a receivable 
C) a large number of sales to numbered corporations 
D) a significant increase in sales over the prior year 
A) large-sales transactions 
B) abnormally long collection terms for a receivable 
C) a large number of sales to numbered corporations 
D) a significant increase in sales over the prior year

Question 17

At the review stage of an audit,the application of analytical procedures is ________.

Accepted Answer

A) recommended by auditing standards 
B) not mentioned by auditing standards 
C) not useful,since detailed substantive tests have already been performed 
D) required by auditing standards 
A) recommended by auditing standards 
B) not mentioned by auditing standards 
C) not useful,since detailed substantive tests have already been performed 
D) required by auditing standards

Question 18

Having identified related party transactions,the auditor should _______.

Accepted Answer

A) confirm the terms and amounts of the transactions with the related parties 
B) inform the audit committee in writing 
C) consult with a fraud specialist to consider extended procedures 
D) consider including an emphasis of matter paragraph in the audit opinion 
A) confirm the terms and amounts of the transactions with the related parties 
B) inform the audit committee in writing 
C) consult with a fraud specialist to consider extended procedures 
D) consider including an emphasis of matter paragraph in the audit opinion

Question 19

An entity's income statements were misstated due to the recording of a journal entry that involved debits and credits to an unusual combination of expense and revenue accounts.The auditor most likely to detect this irregularity by ________.

Accepted Answer

A) tracing a sample of journal entries to the general ledger 
B) evaluating the effectiveness of the internal control system policies and procedures 
C) investigating the reconciliation of control accounts with the subsidiary records 
D) performing analytical procedures designed to disclose differences between the balances in the accounts and budgeted amounts 
A) tracing a sample of journal entries to the general ledger 
B) evaluating the effectiveness of the internal control system policies and procedures 
C) investigating the reconciliation of control accounts with the subsidiary records 
D) performing analytical procedures designed to disclose differences between the balances in the accounts and budgeted amounts

Question 20

The impact of a subsequent event on the audit report depends on whether it is detected before or after the ________.

Accepted Answer

A) balance sheet date 
B) audit report date 
C) year-end date 
D) dual date 
A) balance sheet date 
B) audit report date 
C) year-end date 
D) dual date

A second-partner review of the working papers and financial statements is performed to ensure that the ________.

Toward the end of an audit,it is not necessary that external auditors consider the revenue and expense accounts that were not audited in connection with balance sheet accounts.

The audit of the year-end franchise revenue balances is normally conducted in conjunction with which related account group?

A type of subsequent event that provides new information regarding financial conditions that existed at the date of the balance sheet requires only footnote disclosure.

Auditors have a responsibility to perform audit procedures ________.

The primary source of information that the auditor can use in corroborating information about litigation,claims,and assessments is the ________.

Analytical procedures are used during the overall evaluation of the financial statements.

Which of the following can illustrate a subsequent event that requires disclosure but not adjustment?

Lawyers' letters should be written ________.

A major means by which an auditor obtains evidence about material contingencies is ________.

Settlement of litigation when the event giving rise to the claim took place after the balance sheet date requires financial statement disclosure only.

A working paper reference index reflects ________.

Why do auditors ask about related party transactions and where do they typically do this?

Auditors must complete phases of an audit after the balance sheet date.This subsequent period extends from the balance sheet date to the date of the ________.

An auditor is most likely to suspect the existence of undisclosed related parties by noticing _______.

At the review stage of an audit,the application of analytical procedures is ________.

Having identified related party transactions,the auditor should _______.

An entity's income statements were misstated due to the recording of a journal entry that involved debits and credits to an unusual combination of expense and revenue accounts.The auditor most likely to detect this irregularity by ________.

The impact of a subsequent event on the audit report depends on whether it is detected before or after the ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

Filters

hapter 15 Completing the Audit Work

A second-partner review of the working papers and financial statements is performed to ensure that the ________.

Toward the end of an audit,it is not necessary that external auditors consider the revenue and expense accounts that were not audited in connection with balance sheet accounts.

The audit of the year-end franchise revenue balances is normally conducted in conjunction with which related account group?

A type of subsequent event that provides new information regarding financial conditions that existed at the date of the balance sheet requires only footnote disclosure.

Auditors have a responsibility to perform audit procedures ________.

The primary source of information that the auditor can use in corroborating information about litigation,claims,and assessments is the ________.

Analytical procedures are used during the overall evaluation of the financial statements.

Which of the following can illustrate a subsequent event that requires disclosure but not adjustment?

Lawyers' letters should be written ________.

A major means by which an auditor obtains evidence about material contingencies is ________.

Settlement of litigation when the event giving rise to the claim took place after the balance sheet date requires financial statement disclosure only.

A working paper reference index reflects ________.

Why do auditors ask about related party transactions and where do they typically do this?

Auditors must complete phases of an audit after the balance sheet date.This subsequent period extends from the balance sheet date to the date of the ________.

An auditor is most likely to suspect the existence of undisclosed related parties by noticing _______.

At the review stage of an audit,the application of analytical procedures is ________.

Having identified related party transactions,the auditor should _______.

An entity's income statements were misstated due to the recording of a journal entry that involved debits and credits to an unusual combination of expense and revenue accounts.The auditor most likely to detect this irregularity by ________.

The impact of a subsequent event on the audit report depends on whether it is detected before or after the ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

Filters