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auditing 1

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Christian Cobo
Quiz por Christian Cobo, atualizado more than 1 year ago
Christian Cobo
Criado por Christian Cobo mais de 8 anos atrás
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Questão 1

Questão
The definition of internal audit includes all of the following except
Responda
  • additional value and improved operations.
  • determination of efficient and effective performance.
  • provision of assurance and consulting activity.
  • independence and objectivity.

Questão 2

Questão
The reasons for outsourcing an internal audit include
Responda
  • more expertise and improved control over audit costss
  • improved control over audit costs and improved alignment with company goals.
  • more expertise only.
  • all of the above

Questão 3

Questão
The primary difference between operational auditing and financial auditing is that in operational auditing, the auditor
Responda
  • is seeking to help management use resources in the most effective manner possible.
  • can use analytical skills and tools that are not necessary in financial auditing.
  • starts the process with the financial statements of an activity being audited and works backward to the basic processes involved in producing them.
  • is concerned only with the audited activity's adherence to company policy and procedures.

Questão 4

Questão
Independence permits internal auditors to render impartial and unbiased judgments. The best way for internal audit departments to achieve independence is through
Responda
  • supervision within the organization.
  • organizational status and individual objectivity.
  • organizational knowledge and skills.
  • individual knowledge and skills.

Questão 5

Questão
The proper organizational role of internal auditing is to
Responda
  • assist external auditors in reducing external audit fees.
  • serve as an independent, objective assurance and consulting activity that adds value to the organization.
  • serve as an investigative arm of senior management and the board of directors.
  • perform studies to assist in attaining more efficient operations.

Questão 6

Questão
During the audit of the quality control area, an auditor identified that a specific product has a 3 percent failure rate when tested. The specification calls for a failure rate of less than 1.8 percent. Product failure might lead to customer injury and in turn lawsuits against the company. The auditor has communicated this to management. Which of the following is not an acceptable response from management with regard to this risk?
Responda
  • Management has decided to increase the quality control activity to reduce the manufacture of unacceptable product to an acceptably low level.
  • Management has decided not to continue manufacturing this product.
  • Management has decided that the test data are unreliable and has decided not to respond to the audit findings.
  • Management is aware of the risk and has decided that it is acceptable.

Questão 7

Questão
Having an audit charter is important for internal audit departments. Which of the following items is generally not a reason to have an audit charter?
Responda
  • It provides a commitment from management to support the internal audit department's activities.
  • It defines the skills and competencies required by the internal audit department.
  • It defines the department's authority and responsibility.
  • It defines the reporting requirements for internal audit departments.

Questão 8

Questão
Your organization has selected you to develop an internal audit activity. Your approach will most likely be to hire
Responda
  • internal auditors who collectively have the knowledge and skills needed to perform the responsibilities of the internal audit activities.
  • degreed accountants because most internal audit work is accounting related.
  • inexperienced personnel and train them the way the organization wants them trained.
  • internal auditors each of whom possess the skills required to handle all engagements.

Questão 9

Questão
The purpose of the internal audit's evaluation of the effectiveness of existing risk management processes is to determine that
Responda
  • the organization's objectives and goals will be achieved in an accurate and timely manner and with minimal use of resources.
  • the organization's objectives and goals will be achieved efficiently and economically.
  • management directs processes to provide reasonable assurance of achieving objectives and goals.
  • management has planned and designed the process to provide reasonable assurance of achieving objectives and goals.

Questão 10

Questão
Senior management has ordered a compliance audit of the organization's employee benefits package. Which of the following do both the chief audit executive and senior management consider a primary engagement objective?
Responda
  • Benefits payments, when appropriate, are accurate and timely.
  • Participation levels support continuation of individual programs.
  • Individual programs are operating in accordance with contractual requirements and government regulations.
  • The level of the organizational contributions is adequate to meet the program's demands.

Questão 11

Questão
The Standards for the Professional Practice of Internal Audit of the Institute of Internal Auditors (IIA) is classified in three major categories. Which of the following is not one of these categories?
Responda
  • Governance standards.
  • Implementation standards.
  • Performance standards.
  • Attribute standards.

Questão 12

Questão
Which of the following is a requirement of the Standards for the Professional Practice of Internal Audit if the Institute of Internal Auditors (IIA) that is not a requirement of an external auditor performing a financial statement audit?
Responda
  • Performing a follow-up on audit findings.
  • Reporting to the audit committee.
  • Internal control evaluation.
  • Due care.

Questão 13

Questão
When preparing an audit report, an internal auditor must convince management to take action concerning the report's findings. When reporting on an audit finding, an auditor must include some key elements about that finding in the report. These key elements are
Responda
  • location, criteria, cause, effect, and recommendation.
  • condition, criteria, cause, effect, and recommendation.
  • condition, criteria, cause, effect, and requirement.
  • condition, source, cause, effect, and recommendation.

Questão 14

Questão
Program audits include determining
Responda
  • the degree to which an entity is acquiring, protecting, and using its resources effectively.
  • the causes of an organization's inefficiencies or uneconomical practices.
  • the entity's compliance with laws and regulations concerning matters of efficiency.
  • the effectiveness of an organization's programs, activities, or functions.

Questão 15

Questão
The Standards for the Professional Practice of Internal Auditing of the Institute of Internal Auditors (IIA) does not include the broad category of
Responda
  • quality control.
  • performance of the engagement.
  • nature of work.
  • proficiency and due care.

Questão 16

Questão
Which of the following internal audits is generally not a type of government audit?
Responda
  • Review of the results of programs.
  • Review of the means of safeguarding assets.
  • Review of the economy and efficiency in the use of resources.
  • Review of compliance with policies, plans, procedures, laws, and regulations.

Questão 17

Questão
The U.S. Government Accountability Office (GAO) standards do not specifically require a written report in financial statement audits for
Responda
  • internal control structure and the control risk assessment.
  • compliance with applicable laws and regulations.
  • all instances of illegal acts that could result in criminal prosecution.
  • recommendations for actions to improve operations.

Questão 18

Questão
The federal law that established uniform requirements for audits of federal assistance provided to state and local governments is called
Responda
  • the Single Audit Act of 1984.
  • the Sarbanes-Oxley Act or 2002.
  • the Audit Reduction Act of 1985.
  • the Uniform Requirements Act of 1992.

Questão 19

Questão
The definition of administrative control does not include reference to
Responda
  • plan of organization.
  • adherence to managerial policies.
  • accounting errors.
  • operational efficiency.

Questão 20

Questão
When dealing with standards, measurements, and comparisons, input measurements are most important for audits of
Responda
  • financial statements.
  • program results.
  • efficiency.
  • economy.

Questão 21

Questão
Which of the following is not required to become a certified internal auditor (CIA)?
Responda
  • Meet an experience requirement.
  • Have a full-time position as an internal auditor.
  • Pass a two-day examination.
  • Hold a college degree.

Questão 22

Questão
When considering the competence of internal auditors, external auditors should obtain evidence about the
Responda
  • the size of the internal audit department.
  • lines of communication within the entity of the internal auditors.
  • organizational status of the internal auditors.
  • educational and experience qualifications of the internal auditors.

Questão 23

Questão
When independent CPAs in public practice take engagements to audit government units or financial assistance recipients, they must follow
Responda
  • Internal auditing standards.
  • GAGAS only.
  • GAAS and GAGAS.
  • GAAS only.

Questão 24

Questão
Which of the following statements is true?
Responda
  • External auditors must share responsibility for the work of internal auditors if it is used for evidence for the financial statement audit.
  • External auditors must investigate the competence and objectivity of internal auditors.
  • External auditors must review all work performed by internal auditors.
  • External auditors must consider the internal audit function as part of obtaining an understanding of a company's internal control structure.

Questão 25

Questão
Which of the following is a difference between performing an audit and performing a fraud examination?
Responda
  • Auditors are concerned only with financial statement errors; fraud examiners are concerned only with the theft of assets by employees.
  • Auditors are generally not concerned with small immaterial misstatements; fraud examiners generally do not believe that any fraud is immaterial.
  • Auditors use analytical procedures, such as trend analysis, to identify risks of misstatements; fraud examiners are not interested in analytical procedures because they must identify specific items that prove the occurrence of fraud.
  • Auditors are not concerned with the nature of a financial misstatement; fraud examiners are concerned with the nature of the misstatement.

Questão 26

Questão
Fraud examiners have four main objectives in performing an investigation. Which of the following is not one of those objectives?
Responda
  • Determine whether a fraud exists.
  • Determine how the fraud occurred.
  • Determine who was involved in the fraud.
  • Determine the effect on financial statement users.

Questão 27

Questão
In performing a financial statement audit in accordance with government auditing standards, an auditor is required to report on the entity's compliance with laws and regulations. This report should
Responda
  • indicate that the auditor does not possess legal skills and cannot make legal judgments.
  • provide an opinion on overall compliance with laws and regulations.
  • describe the laws and regulations with which the entity must comply.
  • state that compliance with laws and regulations is the responsibility of the entity's management.

Questão 28

Questão
Which of the following statements is a standard applicable to financial statement audits in accordance with government auditing standards?
Responda
  • Determine the extent to which the entity's programs achieve the desired level of results.
  • Briefly describe in the auditor's report the method of statistical sampling used in performing tests of controls and substantive tests.
  • Report on the scope of the auditor's testing of internal controls.
  • Assess whether the entity has reportable measures of economy and efficiency that are valid and reliable.

Questão 29

Questão
The U.S. Government Accountability Office is an agency of
Responda
  • the Federal Accounting Standards Board.
  • the U.S. Supreme Court.
  • the Executive Office of Management and Budget.
  • the U.S. Congress.

Questão 30

Questão
The demand for compliance auditing in generally accepted government auditing standards (GAGAS) terms is generated by
Responda
  • public reports on government managers' following laws and regulations.
  • governmental managers' obligations to follow laws and regulations.
  • financial statement audits performed in accordance with generally accepted auditing standards.
  • acts discreditable to the profession.

Questão 31

Questão
After performing work in a compliance attestation engagement and finding that a governmental agency's managers failed to install and perform even the most elementary controls to ensure compliance with laws and regulations and, in fact, committed numerous violations, an auditor most likely would
Responda
  • write an adverse report on actual compliance.
  • write a disclaimer of opinion related to knowledge of noncompliance.
  • write a report modified to disclose particular noncompliance events (specific violations of laws and regulations).
  • write an unqualified report on actual compliance.

Questão 32

Questão
A GAO audit report entitled Aviation Safety: Safer Skies Initiative Has Taken Initial Steps to Reduce Accident Rates by 2007 is most likely a report based on work the auditors performed during a
Responda
  • financial statement audit.
  • performance audit of air control regulation effectiveness.
  • performance audit of program goal achievement.
  • compliance audit of air safety regulations.

Questão 33

Questão
The Single Audit Act of 1984 requires an annual audit of all governments, agencies, and nonprofit organizations that
Responda
  • receive $300,000 or more federal funds.
  • spend $500,000 or more federal funds.
  • spend $300,000 or more federal funds.
  • receive $500,000 or more federal funds.

Questão 34

Questão
When auditors report on a financial audit engagement in accordance with generally accepted government auditing standards (GAGAS), the basic report(s) include a
Responda
  • report on compliance regarding laws and regulations and report(s) on achievement of program goal(s).
  • report on internal control and report(s) on efficiency and effectiveness of operations.
  • report (opinion) on financial statements, report on internal control, and report on compliance audit regarding laws and regulations.
  • disclaimer of opinion on financial statements, report on internal control, and report on compliance audit regarding laws and regulations.

Questão 35

Questão
Generally accepted government auditing standards (GAGAS) regarding performance reporting standards requires the reports to tell about which of the following?
Responda
  • Abuse of public money and property and internal control design and strength of operation.
  • Abuse of public money and property and management's noteworthy positive accomplishments.
  • Presentation of financial statements in accordance with GAAP and internal control design and strength of operation.
  • Presentation of financial statements in accordance with GAAP and abuse of public money and property.

Questão 36

Questão
In assessing the objectivity of internal auditors, an independent auditor should
Responda
  • determine the organizational level to which the internal auditors report.
  • test a sample of the transactions and balances that the internal auditors examined.
  • examine documentary evidence of the work performed by the internal auditors.
  • evaluate the quality control program in effect for the internal auditors.

Questão 37

Questão
The work of internal auditors may affect the independent auditor's
Responda
  • procedures performed in obtaining an understanding of the internal control structure and in assessing the risk of material misstatement and substantive tests performed in gathering direct evidence.
  • procedures performed in assessing the risk of material misstatement and substantive tests performed in gathering direct evidence only.
  • procedures performed in obtaining an understanding of the internal control structure and substantive tests performed in gathering direct evidence only.
  • procedures performed in obtaining an understanding of the internal control structure and in assessing the risk of material misstatement only.

Questão 38

Questão
When performing a fraud examination, the fraud examiner takes great care to preserve and identify any documents that may indicate fraud, which is called
Responda
  • forensic auditing.
  • marking an evidential exhibit.
  • establishing evidential procedure.
  • preserving the chain of custody of the evidence.

Questão 39

Questão
Which of the following would be considered in determining whether an internal audit department is independent?
Responda
  • The organizational level of the chief audit officer and the objectivity of the audit staff.
  • A requirement for the auditors to report to the audit committee and the composition of the audit committee.
  • The organizational status of the audit committee and the individual independence of internal auditors in the department.
  • The nature of the audit charter and the objectivity of the audit staff.

Questão 40

Questão
Which of the following would be considered an independence issue for an internal auditor?
Responda
  • The controller had authority to change the audit schedule before being sent to management and the audit committee.
  • The CAE reports directly to the audit committee.
  • The auditors participated in the employee stock plan and, therefore, owned stock in the company.
  • The company decreased every department's budget, including internal audit, by 5%.

Questão 41

Questão
Which of the following situations provides the greatest threat to an internal auditor's objectivity?
Responda
  • A warehouse employee assists an auditor in verifying the physical inventory of small motors.
  • An auditor recommends controls and performance measures for inclusion in a new contract with an outside service organization for the processing of payroll and employee benefits.
  • A former purchasing assistant performs a review of bidding procedures in the purchasing department four months after being transferred to the internal auditing department.
  • An auditor reviews the procedures for a new electronic data interchange (EDI) connection to a major customer before it is implemented.

Questão 42

Questão
An internal auditor's report should contain five elements for each finding. Which of the following are the correct elements?
Responda
  • Condition, relevance, evidence, effect, recommendation.
  • Condition, evidence, cause, effect, recommendation.
  • Condition, relevance, cause, effect, recommendation.
  • Condition, criteria, cause, effect, recommendation.

Questão 43

Questão
A university received a significant grant from the state in which it resides. Which of the following would be of greatest interest to a governmental auditor auditing that grant at the university?
Responda
  • The person applying for the grant was the person that was utilizing the grant money.
  • Grant money was spent in accordance with the purpose of the grant.
  • The grant is properly recorded on the university's financial statements.
  • Cash received by the university was deposited in the appropriate account.

Questão 44

Questão
In an audit of a municipality the auditor is most important audit objective is
Responda
  • purchases made by the municipality have sufficient encumbrances.
  • the municipality as sufficient documentation to support all purchases.
  • the municipality's internal controls are operating effectively.
  • the municipality is in compliance with laws, regulations, and the municipality's policy and procedures.

Questão 45

Questão
Which of the following is mostly concerned with the benefits derived from the expenditure of funds?
Responda
  • Financial statement auditing.
  • Management auditing.
  • Performance auditing.
  • Operational auditing.

Questão 46

Questão
A typical objective for internal auditors in the company's sustainability program is for the auditor to
Responda
  • report on the company's relative success in attaining sustainability objectives.
  • assist management in establishing measurements for achieving company objectives.
  • establish funding requirements for sustainability programs.
  • determine whether the financial statements fairly present the company's expenditures on regulatory compliance.

Questão 47

Questão
A governmental auditor assigned to audit the financial statements of the state highway department would not be considered independent if the auditor
Responda
  • reported the audit findings to the transportation committee of the state legislature.
  • performed audits of the state budget that included funding to the highway department.
  • lived in the state and utilized the highway system on a daily basis.
  • spouse was the CFO of the highway department.

Questão 48

Questão
Management has instated a new grievance process. When an employee has a grievance a manager, in another department is assigned as an independent mediator to evaluate the employee's complaint. That manager must submit a written report to the Vice President of Human Resources, who must act on the report and discuss the resolution with the employee, the employee's manager, and any other relevant personnel. Management acknowledges that this process will mean that an employee will be paid for several hours of work during the grievance process and several managers will spend time in the process. However, this process will likely reduce employee turnover. This process has been in place for 18 months. Management wants to know what the costs are for the grievance process and if the new process is achieving the stated objective of reducing employee turnover. What type of audit would internal perform?
Responda
  • Performance audit.
  • Compliance audit.
  • Governance audit.
  • Operational audit.

Questão 49

Questão
The purpose of the internal audit's evaluation of the effectiveness of existing risk management processes is to determine that
Responda
  • the organization's objectives and goals will be achieved in an accurate and timely manner and with minimal use of resources.
  • the organization's objectives and goals are established within risk limits established by the internal audit organization.
  • management's policies and procedures will achieve objectives and goals.
  • management has planned and designed operations to provide reasonable assurance of achieving objectives and goals.

Questão 50

Questão
Predication is
Responda
  • the amount of restitution that is made to the company when an individual is convicted of a fraud.
  • a reason to believe that a fraud has occurred.
  • evidence used in a court of law in proving fraudulent behavior.
  • the determination of the method used to enact a fraud.

Questão 51

Questão
In a fraud investigation, the first objective is
Responda
  • to determine if a fraud has been committed.
  • establish who the perpetrators are.
  • inspect documentation for tampering.
  • identify possible motives to commit a fraud.

Questão 52

Questão
Which of the following would not be an objective of a fraud investigation?
Responda
  • Determine the amount of restitution that should be received from the perpetrators.
  • Identify internal control weaknesses that allowed the fraud to occur.
  • Determine the scope of the fraud.
  • Determine from the evidence if a fraud has been committed.

Questão 53

Questão
Auditors of governmental units would not be presumed to be independent if they are
Responda
  • elected or appointed and reporting to a legislative body of government.
  • auditing the branch of government to which they are assigned.
  • independent under AICPA Code of Professional Conduct rules.
  • free from sources of personal impairment.

Questão 54

Questão
The services provided by internal auditors do not include
Responda
  • appraisals of the economy and efficiency of operations.
  • review of effectiveness in achieving program results in comparison to pre-established objectives and goals.
  • review of control systems that ensure compliance with company policies, laws, and regulations.
  • audits of financial statements for security registration statements.

Questão 55

Questão
Operational audits do not include determining
Responda
  • whether the department's goals are aligned with the organization's goals.
  • the causes of inefficiencies or uneconomical practices.
  • review of control systems to ensure compliance with company policies.
  • whether the entity is acquiring, practicing, and using resources economically and efficiently.

Questão 56

Questão
Program audits do not include determining
Responda
  • whether the financial statements of an audited entity fairly present the financial position in accordance with GAAP.
  • whether the agency has complied with laws and regulations applicable to the program.
  • the effectiveness of organizations, programs, activities, or functions.
  • the extent to which the desired results or benefits established by the legislature are being achieved.

Questão 57

Questão
The IIA Performance Standards do not include the standard for
Responda
  • engagement planning.
  • compliance with policies, plans, procedures, laws and regulations.
  • nature of work.
  • managing the internal audit activity.

Questão 58

Questão
The GAO Government Auditing Standards requirements for written reports in financial statement audits do not include
Responda
  • a report on the auditee's compliance with applicable laws and regulations.
  • a report on the auditee's internal control structure and the control risk assessment.
  • a report of any significant accomplishments and management improvements.
  • audit report on financial statements.

Questão 59

Questão
In a single audit of federal financial assistance programs, which of the following does the auditor not need to determine and report for each organization?
Responda
  • That the laws and regulations have been complied with.
  • That an adequate internal control system is in place.
  • That the financial statements are presented fairly in accordance with GAAP.
  • An expanded scope audit of economy, efficiency, and program results.

Questão 60

Questão
Which of the following auditors is responsible for designing and planning an audit to detect material illegal acts and frauds?
Responda
  • External auditors.
  • Internal auditors.
  • Governmental auditors.
  • All of the above

Questão 61

Questão
Generally, fraud examiners are called when a fraud is already known or suspected. The term that means a reason to believe a fraud has occurred is
Responda
  • Admonition.
  • Predication.
  • Suspicion.
  • Prediction.

Questão 62

Questão
Fraud examiners must be concerned with the integrity of the evidence that they find. Preserving the evidence is called
Responda
  • admissibility of testimony.
  • evidence conservation.
  • chain of custody.
  • expert identification.

Questão 63

Questão
The AICPA Assurance Services Executive Committee identified five megatrends that can affect public accounting firms'' business. Which of the following is NOT one of the megatrends they identified?
Responda
  • Merging of corporations creating fewer audit opportunities
  • Globalization
  • The shift from the industrial age to the knowledge age
  • Information Technology

Questão 64

Questão
Assurance services are defined as independent professional services that
Responda
  • develop efficient and effective accounting systems to ensure compliance with accounting standards and policy.
  • attest to the adequacy of controls over business operations.
  • improve the quality of information, or its context, for decision makers.
  • establish criteria for effective measurement of business activity.

Questão 65

Questão
Many individuals are apprehensive about using the Internet to purchase items. This apprehension mainly arises from users' concerns about
Responda
  • the lack of CPA involvement in Internet company financial information.
  • a lack of security for information transmitted over the Internet.
  • the time delays in Internet purchases.
  • the reliability of computer technology.

Questão 66

Questão
The phrase "Trust services" refers to
Responda
  • all AICPA designated assurance services.
  • WebTrust and XBRL Services.
  • XBRL and SysTrust Services.
  • WebTrust and SysTrust Services.

Questão 67

Questão
Which of the following is NOT a principle of Trust Service engagements?
Responda
  • Confidentiality of information
  • Proficiency in preparing transactions
  • Availability of the system, products, or services
  • Security from unauthorized use

Questão 68

Questão
What is the appropriate name for an assurance service provided by a CPA regarding a client's commercial Internet site with reference to the principles of privacy, security, processing integrity, availability, and confidentiality?
Responda
  • WebSecure
  • XBRL
  • SysTrust
  • WebTrust

Questão 69

Questão
Extensible Business Reporting Language (XBRL) provides a computer readable identifying tag for each individual item of data. The advantages of XBRL include all of the following except
Responda
  • permits automatic checking of information.
  • improves the full disclosure of financial information.
  • reduces the chance of error.
  • increases the speed of handling of financial data.

Questão 70

Questão
Enhanced Business Reporting (EBR) focuses on improving business reporting by developing a voluntary framework for presentation and disclosure of value drivers and non-financial measures of performance. The advantages of EBR include all of the following except
Responda
  • better footnote disclosure in the companies' SEC filings.
  • better allocation of capital by investors.
  • reduced financing costs for companies.
  • more efficient and effective regulatory process.

Questão 71

Questão
Attestation engagements include
Responda
  • examinations, reviews, compilations, agreed-upon procedures and assurance services.
  • examinations, reviews, and agreed-upon procedures.
  • examinations and assurance services.
  • only examinations.

Questão 72

Questão
The accountant's standard report for a compilation service would not include a statement that
Responda
  • financial statements have not been audited or reviewed and the accountant does not express an opinion or any other form of assurance.
  • compilation service consists primarily of inquiries of company personnel and analytical procedures applied to financial data.
  • financial statement information is the representation of the owners of the business.
  • a compilation service has been performed in accordance with standards established by the AICPA.

Questão 73

Questão
Shelly's Bank has loaned money to Pete's Auto Supply. The loan is collateralized by inventory. The loan also requires a CPA to observe the count of the inventory and trace sampled items to the vendor invoices in order to determine the value of inventory is not misstated. This service would be
Responda
  • a compilation engagement.
  • a review engagement.
  • an attestation engagement.
  • an assurance service engagement.

Questão 74

Questão
The reporting standards for an attestation are different from that of an audit because they require
Responda
  • the report requires a disclosure of the procedures performed during the attestation.
  • the report requires a statement that the presentation is not in accordance with GAAP.
  • the report to identify the subject matter of the assertion being reported on.
  • the report to include an opinion.

Questão 75

Questão
Attestation engagements may be more difficult than financial statement audits when
Responda
  • when the report may be submitted to individuals with insufficient knowledge of the nature of an attestation engagement.
  • when management may not understand the underlying assumptions of the attestation.
  • internal controls are difficult to assess.
  • the establishment of suitable measurement criteria is difficult.

Questão 76

Questão
In an agreed-upon procedures engagement, an accountant must
Responda
  • all of these are true.
  • include negative assurance explicitly in the report.
  • follow the attestation standard related to evidential matter.
  • follow the attestation standard related to internal control.

Questão 77

Questão
A responsible party for information to subject to an attestation engagement would not include
Responda
  • a client employee named in a contract or regulation as being responsible for the information.
  • the client's Vice President of Marketing.
  • the independent accountant.
  • the client's controller.

Questão 78

Questão
Which of the following procedures would not be performed in a review of financial statements of a nonpublic company?
Responda
  • Study the financial statements for indications that they conform to generally accepted accounting principles.
  • Obtain an attorney's letter regarding litigation and unasserted claims.
  • Perform analytical procedures to identify relationships and individual items that appear to be unusual.
  • Inquire about the accounting system and bookkeeping procedures.

Questão 79

Questão
ABC Company prepares financial statements showing the last two years, years X and Y (Year X is the year prior to year Y). The auditor performed an audit of year X and a review of year Y. The auditor may
Responda
  • notify the client that prior year audited financial statements cannot be presented when the current years statements have not been audited.
  • reissue the year X audit report with an explanatory paragraph disclosing that only a review was performed on year Y.
  • provide only the report concerning the year Y review.
  • report on the year Y review and reissue the year X audit report.

Questão 80

Questão
In an agreed-upon procedures engagement, an accountant
Responda
  • follows all of the Fundamental Principles of GAAS.
  • restricts the report to specified users.
  • includes negative assurance in the report.
  • gives a qualified audit report.

Questão 81

Questão
Which of the following procedures should an accountant perform during an engagement to review the financial statements of a nonpublic entity?
Responda
  • Examine cash disbursements in the subsequent period for unrecorded liabilities.
  • Send bank confirmation letters to the entity's financial institutions.
  • Obtain a client representation letter from members of management.
  • Communicate reportable conditions discovered during the assessment of control risk.

Questão 82

Questão
When an accountant is engaged to compile a nonpublic entity's financial statements that omit substantially all disclosures required by GAAP, the accountant should indicate in the compilation report that the financial statements
Responda
  • are special-purpose financial statements that are not comparable to those of prior periods.
  • are not compiled in accordance with Statements on Standards for Accounting and Review Services.
  • are prepared in conformity with a comprehensive basis of accounting other than GAAP.
  • might influence users' conclusions about the business, if the disclosures were included.

Questão 83

Questão
Which of the following procedures ordinarily should be applied when an independent accountant conducts a review of interim financial information of a publicly held entity?
Responda
  • Perform cut-off tests for cash receipts and disbursements.
  • Inspect the open purchase order file.
  • Read the minutes of the board of directors' meetings.
  • Verify changes in key account balances.

Questão 84

Questão
An auditor's special report on financial statements prepared in conformity with the cash basis of accounting should include a separate explanatory paragraph before the opinion paragraph that
Responda
  • explains how the results of operations differ from financial statements prepared in conformity with generally accepted accounting principles.
  • refers to the note to the financial statements that describes the special purpose framework.
  • states whether the financial statements are fairly presented in conformity with a special purpose framework.
  • justifies the reasons for departing from generally accepted principles.

Questão 85

Questão
Which of the following best describes an engagement to report on an entity's internal control over financial reporting for a nonpublic company?
Responda
  • A consulting engagement to provide constructive advice to the entity on its internal control structure
  • A prospective engagement to project, for a period of time not to exceed one year, and report on the expected benefits of the entity's internal control structure
  • An audit engagement to render an opinion on the entity's internal control structure
  • An attestation engagement to examine and report on management's written assertions about the effectiveness of its internal control structure

Questão 86

Questão
Delta Life Insurance Co. prepares its financial statements on an accounting basis insurance companies use pursuant to the rules of a state insurance commission. Wall, CPA, is Delta's auditor. If Wall discovers that the statements are not suitably titled, Wall should
Responda
  • explain in the notes to the financial statements the terminology used.
  • issue a special statutory basis report that clearly disclaims any opinion.
  • apply to the state insurance commission for an advisory opinion.
  • disclose any reservations in an explanatory paragraph and qualify the opinion.

Questão 87

Questão
When providing limited assurance that the reviewed financial statements of a nonpublic entity require no material modifications to be in accordance with generally accepted accounting principles, the accountant should
Responda
  • develop audit plans to determine whether the entity's financial statements are fairly presented.
  • understand the accounting principles of the industry in which the entity operates.
  • confirm with the entity's lawyer that material loss contingencies are disclosed.
  • assess the risk that a material misstatement could occur in a financial statement assertion.

Questão 88

Questão
Which of the following procedures is ordinarily performed by an accountant in a compilation engagement of a nonpublic entity?
Responda
  • Applying analytical procedures designed to corroborate management's assertions that are embodied in the financial statement components
  • Making inquiries of management concerning actions taken at meetings of the stockholders and the board of directors
  • Obtaining written representations from management indicating that the compiled financial statements will not be used to obtain credit
  • Reading the financial statements to consider whether they are free of obvious mistakes in the application of accounting principles

Questão 89

Questão
In reporting on a nonpublic entity's internal control over financial reporting, an accountant should include a paragraph that describes the
Responda
  • inherent limitations of internal control.
  • documentary evidence regarding the control environment factors.
  • potential benefits from the accountant's suggested improvements.
  • changes in the entity's internal control since the prior report.

Questão 90

Questão
Compiled financial statements of a nonpublic entity should be accompanied by a report stating that
Responda
  • a compilation consists primarily of inquiries of entity personnel and analytical procedures applied to financial data.
  • the accountant does not express an opinion or any other form of assurance on the financial statements.
  • the accountant assessed the accounting principles used and significant estimates made by management.
  • the scope of the accountant's procedures has not been restricted in testing the financial information that is the representation of management.

Questão 91

Questão
Hamell Corporation is making a presentation to a prospective investor. The presentation includes a projection showing that the company's sales will be between $25,000,000 and $27,000,000 within the next three years. Hamell believes the information will be better received if its CPA provides an attestation report on the projection. In order to provide such a report the CPA must do all of the following EXCEPT
Responda
  • identify key factors affecting the information.
  • confirm expected sales with customers.
  • evaluate the assumptions used in preparing the projection.
  • obtain knowledge about the client's business.

Questão 92

Questão
Hamell Corporation is making a presentation to a perspective investor. The presentation includes a projection showing that the company's sales will be between $25,000,000 and $27,000,000 within the next three years. Hamell believes the information will be better received if its CPA provides an attestation report on the projection. The CPA should insure that proper disclosure is made to indicate that
Responda
  • projections are limited in their information content due to uncontrollable changes in the business environment.
  • the range does not indicate a "best" and "worst" case scenario.
  • the range of the projection is appropriate given the circumstances.
  • the $27,000,000 estimate is a best case scenario.

Questão 93

Questão
Which of the following is NOT a condition that must be met before an accountant can conduct an engagement concerning a nonpublic entity's internal control over financial reporting?
Responda
  • Management accepts responsibility for the effectiveness of its internal control.
  • Management presents a written assertion about the effectiveness of its internal control.
  • Management's evaluation of control can be supported by sufficient evidence.
  • Management has appropriately documented the internal controls.

Questão 94

Questão
Which of the following steps is NOT required in performing a compliance attestation engagement?
Responda
  • Consider subsequent events
  • Confirm restrictions with applicable third-parties
  • Assess inherent risk
  • Assess planning materiality

Questão 95

Questão
An accountant's report includes the phrase "We are not aware". This phrase indicates
Responda
  • an attestation was not performed.
  • a disclaimer of opinion is presented.
  • the auditor is providing negative assurance.
  • management had not established sufficient criteria for an opinion to be issued.

Questão 96

Questão
The procedures used in a review engagement are
Responda
  • physical examination, inquiry, and obtaining a management representation letter.
  • analytical procedures, inquiry, and obtaining a management representation letter.
  • analytical procedures, reperformance, and obtaining a management representation letter.
  • physical examination, reperformance, and obtaining a management representation letter.

Questão 97

Questão
In a compilation engagement, the accountant
Responda
  • does not express an opinion.
  • provides a list of procedures performed and results found.
  • provides assurance that no material misstatement came to the auditors attention.
  • provides reasonable assurance that no material misstatements exist.

Questão 98

Questão
In a compilation engagement,
Responda
  • all appropriate disclosures must be presented.
  • managers or owners may choose to omit all the footnote disclosures.
  • an auditor provides only negative assurance.
  • financial statements must be presented in prescribed forms.

Questão 99

Questão
In order to perform a review of interim financial information, the auditor must
Responda
  • established sufficient criteria to form an opinion on the fair presentation of the financial information.
  • sent confirmation to third-parties concerning significant related-party transactions.
  • tested the entity's internal controls to determine that financial information is reliable.
  • have audited or be in the process of auditing the entity's latest financial statements.

Questão 100

Questão
When interim financial information is presented as supplementary information accompanying audited financial statements, the auditor should make reference to the information
Responda
  • in all cases.
  • when it has not been labeled as "unaudited".
  • when it is material to the financial statement users.
  • when the information has been reviewed rather than audited.

Questão 101

Questão
Other Comprehensive Basis of Accounting (OCBOA) includes all of the following EXCEPT
Responda
  • statements prepared on a cash basis.
  • statements that conform to accounting principles that are generally accepted.
  • statements prepared on a tax basis.
  • statements that conform to a regulatory agency.

Questão 102

Questão
Which of the following account titles would not be appropriate for a company that prepared its financial statements using the tax basis of accounting?
Responda
  • Statement of Change in Partners' Capital Accounts
  • Statement of Revenue and Expenses
  • Statement of Assets, Liabilities, and Owner's Equity
  • Balance Sheet

Questão 103

Questão
When a company uses a service organization to prepare its payroll, the company's auditors
Responda
  • should include the audit report of the service company's auditors with their auditors' report.
  • must audit the internal controls at the service organization.
  • need to understand the internal controls over the transaction regardless of the location of the control.
  • have no obligation concerning the internal controls at the service organization.

Questão 104

Questão
Auditors can gain sufficient understanding of the internal controls at a service organization by
Responda
  • sending a confirmation concerning internal controls to the service organization's auditors.
  • reviewing a report on internal controls provided by the service organization's auditors.
  • inquiry with management of the service organization.
  • reviewing the contract with the service organization.

Questão 105

Questão
Reports on an entity's internal control over financial reporting
Responda
  • is limited to inquiry and analytical procedures for reports for non-SEC companies.
  • is required by the PCAOB for large public companies and may be performed by a CPA for nonpublic companies.
  • is optional for all companies whether they report to the SEC or not.
  • is required for all companies whether they report to the SEC or not.

Questão 106

Questão
During a review engagement, which of the following is NOT a required inquiry of management?
Responda
  • The changes made to internal controls during the period under review
  • Status of uncorrected misstatements identified in previous engagements
  • Significant transactions occurring near the end of the reporting period
  • The accounting principles and practices used

Questão 107

Questão
During a review the auditor is required to obtain written representations from management. Which of the following is NOT one of the required elements of the representation?
Responda
  • Management has disclosed information about subsequent events
  • Management has made all adjustments identified during the review
  • Management's belief that it has answered all inquiries fully and truthfully
  • Management's responsibility for the fair presentation of the financial statements

Questão 108

Questão
AR 90 requires adequate documentation for a review engagement. Which items are required to be documented?
Responda
  • Analytical procedures: Yes; Management representations: Yes; Understanding of internal controls: Yes
  • Analytical procedures: Yes; Management representations: Yes; Understanding of internal controls: No
  • Analytical procedures: Yes; Management representations: No; Understanding of internal controls: No
  • Analytical procedures: No; Management representations: Yes; Understanding of internal controls: No

Questão 109

Questão
At a minimum, in order to comply with PCAOB AS 5, an auditor of a public company that has material transactions processed by a service organization would have to request from the service organization
Responda
  • a Service Organization Control (SOC) 3 report.
  • a type two service auditors' report.
  • a type one service auditors' report.
  • a description of its internal controls.

Questão 110

Questão
An auditor that is requested to provide a report on application of requirements of an appropriate financial reporting framework may not
Responda
  • issue an opinion on the accounting treatment of a hypothetical transaction.
  • state that differences in facts, circumstances or assumptions might change the conclusion.
  • limit the report to the sole use of specified parties.
  • discuss the requirements with the client's current auditors.

Questão 111

Questão
A report on sustainability, as defined by the AICPA, might include all of the following except
Responda
  • internal control over financial reporting.
  • environmental responsibility.
  • social responsibility.
  • economic viability.

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