Auditing Final Exam 1.2

Is this your test? Login to manage it. If not, you can create an assessment just like it.

This is a non-interactive preview of the quiz content.

1.
1 point
Which of the following factors would least likely affect the form, content, and extent of audit documentation?
2.
1 point
When performing procedures to test assertions about purchases, an auditor vouches a sample of entries in the voucher register to the supporting documents. Which relevant assertion would this procedure most likely support?
3.
1 point
Although the quantity and content of audit documentation vary with each engagement, an auditor’s permanent files most likely include
4.
1 point
In completing the audit, the auditor must obtain a letter of audit inquiry. Which of the following is an accurate description of a letter of audit inquiry?
5.
1 point
The auditor of a large U.S. public company has determined that a material weakness exists in the client’s ICFR. Which of the following statements is true?
6.
1 point
Which of the following sets of information does an auditor usually confirm on one form?
7.
1 point
Questions 1 and 2 are based on the following information. The following was taken from the bank transfer schedule prepared during the audit of Fox Co.’s financial statements for the year ended December 31, Year 1. Assume all checks are dated and issued on December 30, Year 1.

Check Bank Accounts Disbursement Date Receipt Date

No. From To Per Per Per Per
Books Bank Books Bank
101 National Federal Dec. 30 Jan. 4 Dec. 30 Jan. 3
202 County State Jan. 3 Jan. 2 Dec. 30 Dec. 31
303 Federal American Dec. 31 Jan. 3 Jan. 2 Jan. 2
404 State Republic Jan. 2 Jan. 2 Dec. 31 Jan. 2

Which of the following checks illustrate deposits or transfers in transit at December 31, Year 1?
8.
1 point
Which of the following statements concerning audit documentation is false?
9.
1 point
In which of the following situations would an auditor ordinarily issue an unqualified audit opinion without an explanatory paragraph?
10.
1 point
Questions 1 and 2 are based on the following information. The following was taken from the bank transfer schedule prepared during the audit of Fox Co.’s financial statements for the year ended December 31, Year 1. Assume all checks are dated and issued on December 30, Year 1.

Check Bank Accounts Disbursement Date Receipt Date

No. From To Per Per Per Per
Books Bank Books Bank
101 National Federal Dec. 30 Jan. 4 Dec. 30 Jan. 3
202 County State Jan. 3 Jan. 2 Dec. 30 Dec. 31
303 Federal American Dec. 31 Jan. 3 Jan. 2 Jan. 2
404 State Republic Jan. 2 Jan. 2 Dec. 31 Jan. 2

Which of the following checks might indicate kiting?
11.
1 point
An auditor decides to use the blank form of accounts receivable confirmation rather than the traditional positive form. The auditor should be aware that the blank form may be less efficient because
12.
1 point
Which of the following most likely would give the most assurance concerning the valuation assertion about accounts receivable?
13.
1 point
Tech Company has an uncertainty because of pending litigation. The auditor’s decision to issue a qualified opinion rather than an unqualified opinion most likely would be determined by which of the following?
14.
1 point
The authority to accept incoming goods in receiving should be based on a(n)
15.
1 point
The auditor has responsibility regarding clients’ noncompliance with laws and regulations. Obviously, management may try to hide acts involving noncompliance, which limits the auditor’s ability to detect such acts. Which of the following are inherent limitations in the audit that limit the auditor’s ability to detect acts involving noncompliance?
16.
1 point
Tread Corp. accounts for the effect of a material accounting change prospectively, when the inclusion of the cumulative effect of the change is required in the current year. The auditor would choose which of the following opinions?
17.
1 point
An auditor most likely would review an entity’s periodic accounting for the numerical sequence of shipping documents and invoices to support management’s financial statement assertion of
18.
1 point
In completing the audit, the auditor should review the adequacy of the disclosures in the financial statements. When assessing the disclosures, the auditor should have reasonable assurance that which of the following are characteristic of the disclosures?
19.
1 point
To determine whether accounts payable are complete, an auditor performs a test to verify that all merchandise received is recorded. The population of documents for this test consists of all
20.
1 point
Audit evidence can come in different forms with different degrees of persuasiveness. Which of the following is the least persuasive type of evidence?
21.
1 point
In which of the following situations would the auditor modify the audit report on ICFR?
22.
1 point
Which of the following procedures would an auditor most likely perform for year-end accounts receivable confirmations when the auditor did not receive replies to second requests?
23.
1 point
Which of the following accounts most likely would assist in reducing the risks of material misstatement related to the existence or occurrence of manufacturing transactions?
24.
1 point
To provide assurance that each voucher is submitted and paid only once, an auditor most likely would examine a sample of paid vouchers and determine whether each voucher is
25.
1 point
If it is discovered after the report date that the auditor failed to confirm receivables, which of the following statements is true?
26.
1 point
Which of the following is an important provision of the Foreign Corrupt Practices Act?
27.
1 point
The auditor’s report does not provide assurance about which of the following elements of the client’s financial reporting?
28.
1 point
Which of the following is a substantive procedure that an auditor most likely would perform to verify the existence and valuation assertions about recorded accounts payable?
29.
1 point
The objective of tests of details of transactions performed as substantive procedures is to
30.
1 point
Which of the following statements is true regarding the auditor’s responsibilities related to reporting?
31.
1 point
The auditor of a large U.S. public company has determined that a material weakness exists in the client’s ICFR. Which of the following statements is true?
32.
1 point
The primary source of information to be reported about litigation, claims, and assessments is the
33.
1 point
The audit working paper that reflects the major components of an amount reported in the financial statements is the
34.
1 point
Which of the following describes a situation when an auditor cannot typically issue a standard unqualified audit opinion?
35.
1 point
AU-C 505, External Confirmations, defines external confirmation as “a direct written response to the auditor from a third party (the confirming party), either in paper form or by electronic or other medium.” The assertions for which confirmation of accounts receivable balances provides primary evidence are
36.
1 point
In completing the audit, the auditor communicates with management via the management letter. Which of the following is false about management letters?
37.
1 point
Which of the following auditing procedures most likely would provide assurance regarding a manufacturing entity’s relevant assertions about inventory valuation?
38.
1 point
Which of the following statements about audit evidence is true?
39.
1 point
An auditor most likely would limit substantive audit tests of sales transactions when the risks of material misstatement are assessed as low for the existence and occurrence assertions concerning sales transactions and the auditor has already gathered evidence supporting
40.
1 point
An auditor ordinarily sends a standard confirmation request to all banks with the client has done business during the year under audit, regardless of the year-end balance. A purpose of this procedure is to
41.
1 point
In completing the audit, the auditor should review the adequacy of the disclosures in the financial statements. When assessing the disclosures, the auditor should have reasonable assurance that which of the following are characteristic of the disclosures?
42.
1 point
Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?
43.
1 point
Which of the following statements is correct concerning the use of negative confirmation requests?
44.
1 point
The auditor discovers various errors in the client’s financial statements during the audit. At the end of the audit, these misstatements are analyzed to determine if they need to be recorded and corrected. In which situation could management and the auditor decide not to correct the misstatement?
45.
1 point
In which of the following situations would an auditor typically issue an unqualified opinion, but include explanatory language?
46.
1 point
Which of the following might be detected by an auditor’s review of the client’s sales cutoff?
47.
1 point
In which of the following situations would a disclaimer of opinion not be appropriate?
48.
1 point
Which statement about audit evidence is false?
49.
1 point
In obtaining evidence about loss contingencies, which of the following are sources of evidence that the auditor should obtain from management?
50.
1 point
Which of the following situations most likely could lead to an embezzlement scheme?