Kayla Harbaugh
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Auditing chapter 5 homework

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Kayla Harbaugh
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Auditing chapter 5 homework

Pregunta 1 de 30

1

The PCAOB’s General Auditing Standards requires that an audit be performed by which type of person?

Selecciona una de las siguientes respuestas posibles:

  • An auditor with seasoned judgment in varying degrees of supervision and review

  • An auditor having the appropriate professional qualifications

  • An auditor with adequate technical and leadership skills

  • All of the above

Explicación

Pregunta 2 de 30

1

Which auditing standards apply to private companies?

Selecciona una de las siguientes respuestas posibles:

  • The AICPA Standards

  • The IASSB Standards

  • The Standards of the PCAOB

  • All of the above

Explicación

Pregunta 3 de 30

1

The AICPA Principles Governing an Audit include which of the following categories that guide the conduct of an audit?

Selecciona una de las siguientes respuestas posibles:

  • Purpose of an audit and premise upon which an audit is conducted

  • Responsibilities

  • Performance

  • All of the above

Explicación

Pregunta 4 de 30

1

What is the scope of applicability of the auditing standards of the AICPA?

Selecciona una de las siguientes respuestas posibles:

  • Public companies traded in the U.S.

  • Public companies traded in non-U.S. markets

  • Nonpublic companies in the U.S.

  • Nonpublic companies traded in non-U.S. markets

Explicación

Pregunta 5 de 30

1

Which of the following organizations provides auditing standards for public companies?

Selecciona una de las siguientes respuestas posibles:

  • GAO

  • AICPA

  • GAAP

  • PCAOB

Explicación

Pregunta 6 de 30

1

Which of the following factors has the greatest effect on the reliability of financial statements?

Selecciona una de las siguientes respuestas posibles:

  • The industry of the client

  • The client's internal control structure

  • The client's trend of earnings

  • The size of the client

Explicación

Pregunta 7 de 30

1

What is management’s responsibility with respect to the conduct of an audit?

Selecciona una de las siguientes respuestas posibles:

  • Preparing financial statements

  • Maintaining internal control over financial reporting

  • Providing the auditor with relevant information and access to personnel

  • All of the above

Explicación

Pregunta 8 de 30

1

Which of the following assertions address whether accounts have been included in the financial statements at appropriate amounts?

Selecciona una de las siguientes respuestas posibles:

  • Completeness assertion

  • Valuation or allocation assertion

  • Rights and obligations assertion

  • None of the above

Explicación

Pregunta 9 de 30

1

Which of the following is the primary assertion related to testing inventory on hand to see if it includes consignment goods?

Selecciona una de las siguientes respuestas posibles:

  • Rights and Obligations

  • Valuation

  • Existence

  • Completeness

Explicación

Pregunta 10 de 30

1

Which assertion is most closely related to the determination of the adequacy of the allowance for doubtful accounts?

Selecciona una de las siguientes respuestas posibles:

  • Rights and Obligations

  • Presentation and Disclosure

  • Valuation

  • Existence

Explicación

Pregunta 11 de 30

1

Which assertion addresses whether all transactions and accounts that should be included in the financial statements are included?

Selecciona una de las siguientes respuestas posibles:

  • Existence

  • Completeness

  • Rights and Obligations

  • Valuation

Explicación

Pregunta 12 de 30

1

Which assertion addresses whether the financial statement items are properly classified in the financial statements?

Selecciona una de las siguientes respuestas posibles:

  • Valuation

  • Presentation and Disclosure

  • Existence

  • Completeness

Explicación

Pregunta 13 de 30

1

Which of the following is a procedure that requests a direct written response to the auditor from a third party?

Selecciona una de las siguientes respuestas posibles:

  • Inspection

  • Inquiry

  • Confirmation

  • Observation

Explicación

Pregunta 14 de 30

1

Which of the following is a procedure which analyzes plausible relationships among financial and nonfinancial data?

Selecciona una de las siguientes respuestas posibles:

  • Analytical procedures

  • Observation

  • Scanning

  • Reviewing

Explicación

Pregunta 15 de 30

1

Which of the following terms describes procedures designed to detect material misstatements in accounts?

Selecciona una de las siguientes respuestas posibles:

  • Control tests

  • Substantive procedures

  • Business risk procedures

  • Risk assessment procedures

Explicación

Pregunta 16 de 30

1

Which of the following statements accurately describes the auditor’s reporting responsibility for a financial statement audit?

Selecciona una de las siguientes respuestas posibles:

  • The auditor will identify in the auditor’s report those circumstances in which auditing principles have not been consistently observed in the current period in comparison to the preceding period.

  • The auditor will state explicitly whether the financial statements are fairly presented in accordance with the applicable financial reporting framework.

  • The auditor will review adjusting journal entries for accuracy, and if the auditor concludes those entries are not reasonably accurate, the auditor must so state in the auditor’s report.

  • The auditor will express an unqualified opinion on the financial statements or will conduct additional audit procedures until such an opinion can be expressed.

Explicación

Pregunta 17 de 30

1

Which of the following is a reason why an auditor needs an understanding of internal controls?

Selecciona una de las siguientes respuestas posibles:

  • To provide individual comments on internal control non-compliance

  • To assess the risk of possible misstatements in the financial statements

  • To become comfortable that the client will pay its audit bills

  • To asses materiality

Explicación

Pregunta 18 de 30

1

Which of the following is not a typical accounting cycle?

Selecciona una de las siguientes respuestas posibles:

  • Inventory

  • Revenue

  • Internal controls

  • Cash

Explicación

Pregunta 19 de 30

1

Which of the following statements about assertions is true?

Selecciona una de las siguientes respuestas posibles:

  • All assertions are equally important for all accounts

  • The importance of an assertion depends on the account

  • Assertions are not related to accounts

  • None of the above

Explicación

Pregunta 20 de 30

1

Which of the following assertions would the auditor usually consider most relevant for accounts payable?

Selecciona una de las siguientes respuestas posibles:

  • Completeness

  • Valuation

  • Existence

  • Disclosure

Explicación

Pregunta 21 de 30

1

Which of the following is a use of audit documentation?

Selecciona una de las siguientes respuestas posibles:

  • Assisting the engagement team in planning and performing the audit

  • Assisting members of the engagement team responsible for supervising and reviewing the audit work

  • Retaining a record of matters of continuing significance to future audits of the same organization

  • All of the above

Explicación

Pregunta 22 de 30

1

Which of the following factors influence the risk of material misstatement?

Selecciona una de las siguientes respuestas posibles:

  • Business risks

  • Management incentives

  • IT risks

  • All of the above

Explicación

Pregunta 23 de 30

1

What does business risk include?

Selecciona una de las siguientes respuestas posibles:

  • Economic factors

  • Competitive factors

  • Regulatory risk

  • All of the above

Explicación

Pregunta 24 de 30

1

What does the effectiveness of internal controls influence?

Selecciona una de las siguientes respuestas posibles:

  • Inherent risk

  • Control risk

  • Risk of material misstatement

  • Both B and C

Explicación

Pregunta 25 de 30

1

Which statement is true concerning materiality?

Selecciona una de las siguientes respuestas posibles:

  • Materiality guidelines are specifically prescribed by the PCAOB

  • Materiality is not a useful concept in assessing internal control effectiveness

  • Materiality is a concept applied to financial statement presentation but not to disclosures

  • Misstatements are material if they could reasonably be expected to influence the decisions of users of the financial statements

Explicación

Pregunta 26 de 30

1

Which of the following statements is true regarding client acceptance or continuance decisions?

Selecciona una de las siguientes respuestas posibles:

  • The client acceptance/continuance decision is one of the most important factors in audit quality.

  • Potential audit fees are not a valid consideration in the acceptance or continuance decision.

  • Audit firms are not permitted to conduct background checks on the management of a potential client.

  • An audit firm cannot discontinue providing audit services to a client without just cause.

Explicación

Pregunta 27 de 30

1

Which of the following factors affect the substantive procedures performed in an audit?

Selecciona una de las siguientes respuestas posibles:

  • The subjectivity of the accounting process

  • Size of the account

  • Effectiveness of the relevant controls

  • All of the above affect the substantive procedures that are performed

Explicación

Pregunta 28 de 30

1

If the auditor’s assessment of the materiality of the account balance is high, what would be the respective effect on (1) the extent of substantive testing and (2) the nature of procedures performed?

Selecciona una de las siguientes respuestas posibles:

  • (1) More (2) More rigorous

  • (1) Less (2) Less rigorous

  • (1) Less (2) More rigorous

  • (1) More (2) Less rigorous

Explicación

Pregunta 29 de 30

1

An auditor gathers evidence on internal controls for which respective time periods for the purposes of expressing an opinion on (1) control effectiveness and for (2) testing controls in the financial statement period?

Control Effectiveness Financial Statement

Selecciona una de las siguientes respuestas posibles:

  • (1) Throughout the year (2) Throughout the year

  • (1) Throughout the year (2) As of year end

  • (1) As of year end (2) As of year end

  • (1) As of year end (2) Throughout the year

Explicación

Pregunta 30 de 30

1

Which of the following would not be a factor in whether a control weakness would be considered to be a material weakness as opposed to a significant deficiency?

Selecciona una de las siguientes respuestas posibles:

  • The materiality of the related balance

  • The volume of transactions affected

  • The nature of the client's industry

  • The subjectivity of the account balance

Explicación

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