25170947
Description
Quiz by Kayla Harbaugh, updated more than 1 year ago
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Created by Kayla Harbaugh
about 4 years ago
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Question 1
Question
Which of these statements is true about the audit opinion formulation process presented in this chapter?
Answer
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The audit opinion formulation process is different for the financial statement only audit and the integrated audit.
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The audit opinion formulation process is based on the premise that management has responsibility to prepare the financial statements and maintain internal control over financial reporting.
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The audit opinion formulation process is comprised of seven phases.
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All of these are true statements regarding the audit opinion formulation process.
Question 2
Question
Which of the following accounts would not be included in the Acquisition and Payment for Long-Lived Assets Cycle?
Answer
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Equipment
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Revenue
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Depreciation expense
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Gain on disposal
Question 3
Question
Which of the following information should be included in audit documentation?
Answer
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Procedures performed.
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Audit evidence examined.
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Conclusions reached with respect to relevant financial statement assertions.
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All of this information should be included.
Question 4
Question
Which of the following statements regarding client acceptance/continuance decisions is false?
Answer
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Auditors are not required to perform audits for any organization that asks for an audit.
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An audit firm's client portfolio is impacted by both audit firm decisions and client decisions.
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Auditors should assess the background and experience of accounting personnel of a potential client.
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It would not be appropriate for audit firms to perform background checks on management of a potential client.
Question 5
Question
Which of the following procedures is least likely to be performed during Phase V of the audit opinion formulation process?
Answer
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Performance of an engagement quality review.
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Performance of preliminary analytical review procedures.
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Assessment of misstatements detected during the performance of substantive procedures and tests of controls.
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Determination of the appropriate audit opinion(s) to issue.
Question 6
Question
There is not much overlap; i.e., things in common among the auditing standards set by the PCAOB, AICPA, and IAASB.
Answer
- True
- False
Question 7
Question
A classic inventory fraud involves management understating ending inventory, thereby yielding a reduction in cost of goods sold and an overstatement of profitability.
Answer
- True
- False
Question 8
Question
Risk assessment procedures provide sufficient appropriate audit evidence on which to base an audit opinion.
Answer
- True
- False
Question 9
Question
In conducting a substantive audit, the auditor uses only substantive procedures, and does not rely on tests of internal controls.
Answer
- True
- False
Question 10
Question
Substantive procedures include substantive analytical procedures and tests of details.
Answer
- True
- False
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