Question 1

Audit risk is the risk that an auditor expresses an inappropriate audit opinion when the financial statements are materially misstated.

Accepted Answer

A) True 
 B)False  True

Question 2

A report giving conclusions about a firm's compliance with quality control standards is typical of which of the following?

Accepted Answer

A) Practice inspection. 
B) Quality inspection. 
C) Peer review. 
D) Quality review. 
A) Practice inspection. 
B) Quality inspection. 
C) Peer review. 
D) Quality review. C

Question 3

The primary purpose of obtaining an understanding of the company's internal controls in the financial statement audit is ________.

Accepted Answer

A) to help the auditors develop the audit program 
B) to make suggestions to management to improve internal controls 
C) to obtain direct sufficient appropriate audit evidence to afford a reasonable basis for an opinion on the financial statements 
D) to determine whether the company has changed any accounting principles 
A) to help the auditors develop the audit program 
B) to make suggestions to management to improve internal controls 
C) to obtain direct sufficient appropriate audit evidence to afford a reasonable basis for an opinion on the financial statements 
D) to determine whether the company has changed any accounting principles A

Question 4

The assessment of materiality has a pervasive impact on the audit.

Accepted Answer

A) True 
 B)False

Question 5

An external auditor is conducting an audit of the financial statements of Camden Corporation.The external auditor is expected to ________.

Accepted Answer

A) certify the correctness of Camden's financial statements 
B) make a 100% examination of Camden's records 
C) give an opinion on whether Camden's financial statements are fairly presented in all material respects 
D) give an opinion on the attractiveness of Camden for investment purposes and critique the wisdom and legality of its business decisions 
A) certify the correctness of Camden's financial statements 
B) make a 100% examination of Camden's records 
C) give an opinion on whether Camden's financial statements are fairly presented in all material respects 
D) give an opinion on the attractiveness of Camden for investment purposes and critique the wisdom and legality of its business decisions

Question 6

Joe Smith,CPA,has been operating is own public accounting practice for several years.His expertise is and has always been in auditing medium-sized private companies in the agricultural industry.Recently,he referred a request to audit a large company in the automotive industry to another firm.In so doing,Joe is best demonstrating compliance with which aspect of the ethical requirements set out in CPA Canada's CAS?

Accepted Answer

A) Objectivity and Independence 
B) Competence 
C) Due Professional Care 
D) Professional Skepticism 
A) Objectivity and Independence 
B) Competence 
C) Due Professional Care 
D) Professional Skepticism

Question 7

The CPA Canada Handbook recommendations are a step-by-step list of procedures auditors have to complete for each engagement.

Accepted Answer

A) True 
 B)False

Question 8

The general standard of GAAS relates primarily to the personal integrity and professional qualifications of auditors.

Accepted Answer

A) True 
 B)False

Question 9

Three-Party Accountability includes all of the following parties except ________.

Accepted Answer

A) users 
B) practitioners 
C) Audit Committee 
D) management 
A) users 
B) practitioners 
C) Audit Committee 
D) management

Question 10

In what way does the regulation of public accountants in Canada help to reduce information risk for investors?

Accepted Answer

A) By guaranteeing the accuracy of the financial statements. 
B) By establishing performance and quality control standards that all public accounting firms must follow when conducting audits. 
C) By acting as a source of financial compensation for investors when corporate failures occur. 
D) By requiring auditors to quantify and set information risk to a uniformly acceptable level. 
A) By guaranteeing the accuracy of the financial statements. 
B) By establishing performance and quality control standards that all public accounting firms must follow when conducting audits. 
C) By acting as a source of financial compensation for investors when corporate failures occur. 
D) By requiring auditors to quantify and set information risk to a uniformly acceptable level.

Question 11

A prospectus is the information,usually including financial information,about a firm that accompanies any new issuance of shares in a regulated securities market.

Accepted Answer

A) True 
 B)False

Question 12

In establishing a quality control system,which area should be of a secondary nature?

Accepted Answer

A) Creating an independence and objectivity checklist. 
B) Creating a program for continuing professional education. 
C) Creating an internal review process. 
D) Controlling access to client files. 
A) Creating an independence and objectivity checklist. 
B) Creating a program for continuing professional education. 
C) Creating an internal review process. 
D) Controlling access to client files.

Question 13

What information is included in the Key Audit Matters section of the audit report?

Accepted Answer

A) A listing of matters where management disagreed with the auditor's final assessment. 
B) A list of management's assertions regarding the financial statements. 
C) A listing of matters that the auditor has judged to be the most significant in the audit of the financial statements. 
D) A list of material misstatements identified in the course of the audit of the financial statements. 
A) A listing of matters where management disagreed with the auditor's final assessment. 
B) A list of management's assertions regarding the financial statements. 
C) A listing of matters that the auditor has judged to be the most significant in the audit of the financial statements. 
D) A list of material misstatements identified in the course of the audit of the financial statements.

Question 14

Practice inspection is something a new auditor does as part of his or her training program.

Accepted Answer

A) True 
 B)False

Question 15

Proper planning and supervision during the performance of an audit encompasses all but which of the following considerations?

Accepted Answer

A) Obtaining knowledge of the auditee's business 
B) Developing an adequate audit plan. 
C) Having a complete audit file of working papers documenting the evidence obtained. 
D) Ensuring unanimity among members of the audit team concerning audit decisions. 
A) Obtaining knowledge of the auditee's business 
B) Developing an adequate audit plan. 
C) Having a complete audit file of working papers documenting the evidence obtained. 
D) Ensuring unanimity among members of the audit team concerning audit decisions.

Question 16

An assurance engagement is one in which a CPA is engaged to ________.

Accepted Answer

A) issue a written communication expressing a conclusion concerning a subject matter for which an accountable party is responsible 
B) provide tax advice or prepare a tax return based on financial information the CPA has not audited or reviewed 
C) testify as an expert witness in accounting,auditing,or tax matters,given certain stipulated facts 
D) assemble prospective financial statements based on the assumptions of the entity's management without expressing any assurance 
A) issue a written communication expressing a conclusion concerning a subject matter for which an accountable party is responsible 
B) provide tax advice or prepare a tax return based on financial information the CPA has not audited or reviewed 
C) testify as an expert witness in accounting,auditing,or tax matters,given certain stipulated facts 
D) assemble prospective financial statements based on the assumptions of the entity's management without expressing any assurance

Question 17

Audit committees monitor management's financial reporting responsibilities.

Accepted Answer

A) True 
 B)False

Question 18

Reliance on self-regulation of the accounting profession has changed as a result of its perceived failure to detect the problems leading to the corporate scandals of 2002/2003.

Accepted Answer

A) True 
 B)False

Question 19

Explain the effect major corporate failures and financial reporting scandals - such as Enron and WorldCom,has contributed towards shaping the auditing environment of today.

Accepted Answer

Major,unexpected corporate failures and

Question 20

Practice standards are a general set of standards intended to guide the audits of financial statements.

Accepted Answer

A) True 
 B)False

Audit risk is the risk that an auditor expresses an inappropriate audit opinion when the financial statements are materially misstated.

A report giving conclusions about a firm's compliance with quality control standards is typical of which of the following?

The primary purpose of obtaining an understanding of the company's internal controls in the financial statement audit is ________.

The assessment of materiality has a pervasive impact on the audit.

An external auditor is conducting an audit of the financial statements of Camden Corporation.The external auditor is expected to ________.

The CPA Canada Handbook recommendations are a step-by-step list of procedures auditors have to complete for each engagement.

The general standard of GAAS relates primarily to the personal integrity and professional qualifications of auditors.

Three-Party Accountability includes all of the following parties except ________.

In what way does the regulation of public accountants in Canada help to reduce information risk for investors?

A prospectus is the information,usually including financial information,about a firm that accompanies any new issuance of shares in a regulated securities market.

In establishing a quality control system,which area should be of a secondary nature?

What information is included in the Key Audit Matters section of the audit report?

Practice inspection is something a new auditor does as part of his or her training program.

Proper planning and supervision during the performance of an audit encompasses all but which of the following considerations?

An assurance engagement is one in which a CPA is engaged to ________.

Audit committees monitor management's financial reporting responsibilities.

Reliance on self-regulation of the accounting profession has changed as a result of its perceived failure to detect the problems leading to the corporate scandals of 2002/2003.

Explain the effect major corporate failures and financial reporting scandals - such as Enron and WorldCom,has contributed towards shaping the auditing environment of today.

Practice standards are a general set of standards intended to guide the audits of financial statements.

Introduction to Auditing

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

Completing the Audit Work

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

Exam 2: Auditors Professional Roles and Responsibilities

Audit risk is the risk that an auditor expresses an inappropriate audit opinion when the financial statements are materially misstated.

A report giving conclusions about a firm's compliance with quality control standards is typical of which of the following?

The primary purpose of obtaining an understanding of the company's internal controls in the financial statement audit is ________.

The assessment of materiality has a pervasive impact on the audit.

An external auditor is conducting an audit of the financial statements of Camden Corporation.The external auditor is expected to ________.

The CPA Canada Handbook recommendations are a step-by-step list of procedures auditors have to complete for each engagement.

The general standard of GAAS relates primarily to the personal integrity and professional qualifications of auditors.

Three-Party Accountability includes all of the following parties except ________.

In what way does the regulation of public accountants in Canada help to reduce information risk for investors?

A prospectus is the information,usually including financial information,about a firm that accompanies any new issuance of shares in a regulated securities market.

In establishing a quality control system,which area should be of a secondary nature?

What information is included in the Key Audit Matters section of the audit report?

Practice inspection is something a new auditor does as part of his or her training program.

Proper planning and supervision during the performance of an audit encompasses all but which of the following considerations?

An assurance engagement is one in which a CPA is engaged to ________.

Audit committees monitor management's financial reporting responsibilities.

Reliance on self-regulation of the accounting profession has changed as a result of its perceived failure to detect the problems leading to the corporate scandals of 2002/2003.

Explain the effect major corporate failures and financial reporting scandals - such as Enron and WorldCom,has contributed towards shaping the auditing environment of today.

Practice standards are a general set of standards intended to guide the audits of financial statements.

Introduction to Auditing

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

Completing the Audit Work

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