Audit test review 1

Card Set Information

Author:
Joens1313
ID:
308571
Filename:
Audit test review 1
Updated:
2015-09-26 14:24:37
Tags:
Audit test review
Folders:

Description:
Audit test review 1
Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user Joens1313 on FreezingBlue Flashcards. What would you like to do?


  1. An auditor issued an audit report that was dual dated for a subsequent event occurring after the original date of the auditor's report but before issuance of the related financial statements. The auditor's responsibility for events occurring subsequent to the original report date was:
    limited to the specific event referenced.
  2. An auditor dual dates an audit report to limit the responsibility taken for subsequent events to the -----------------------------.
    An auditor dual dates an audit report to limit the responsibility taken for subsequent events to the specific event referenced.
  3. When dual dating is not used, the auditor's responsibility is extended to include ----------------------------------------------------------------------.
    When dual dating is not used, the auditor's responsibility is extended to include subsequent events occurring up to the date of the audit report.
  4. After identifying related party transactions, an auditor most likely would:
    determine whether the transactions were approved by those charged with governance.
  5. A CPA is engaged to examine an entity's financial forecast. The CPA believes that several significant assumptions do not provide a reasonable basis for the forecast. Under these circumstances, the CPA should issue:
    an adverse opinion.
  6. The auditor is not required to include --------------------------- in the summary of uncorrected misstatements.
    The auditor is not required to include trivial misstatements in the summary of uncorrected misstatements.
  7. Tell, CPA, is auditing the financial statements of Youth Services Co. (YSC), a not-for-profit organization, in accordance with Government Auditing Standards. Tell’s report on YSC’s compliance with laws and reg­ulations is required to contain statements of:
    both positive and negative assurance.
  8. The auditor may separately communicate ------------------------------ considered to be material weaknesses
    The auditor may separately communicate significant deficiencies considered to be material weaknesses
  9. ---------------------------------- are deficiencies relating to the internal control system that are “important enough to merit attention by those charged with governance.”
    Significant deficiencies are deficiencies relating to the internal control system that are “important enough to merit attention by those charged with governance.”
  10. risk assessment procedures should include the following:

    ------------------------------
    --------------------------------
    ------------------------------
    risk assessment procedures should include the following:

    • Inquiries of management and others
    • Analytical procedures
    • Observation and inspection
  11. Section 407 of the Sarbanes-Oxley Act of 2002 defines financial experts as persons who:

    --------------------------------------,
    ------------------------------------,
    ---------------------------------------.
    Section 407 of the Sarbanes-Oxley Act of 2002 defines financial experts as persons who:

    have an understanding of GAAP and financial statements,are experienced in the preparation or auditing of financial statements and the application of accounting principles,

    are experienced with internal accounting controls,

    and have an understanding of audit committee functions.
  12. What input control is a numeric value computed to provide assurance that the original value has not been altered in construction or transmission
    Check digit
  13. A ------------------------ is a computed numeric value.
    A check digit is a computed numeric value.
  14. How long do the standards require a firm to retain documentation for engagements other than audits?
    The firm should establish policies and procedures for the retention of the records for a sufficient period.
  15. The auditor's objective in performing an audit of internal control over financial reporting is to:
    express an opinion on the effectiveness of the internal controls over financial reporting.
  16. The objective in an audit of internal control is to -------------------------------------------------------------------------------------------.
    The objective in an audit of internal control is to express an opinion of the effectiveness of the internal controls over financial reporting.
  17. -------------------------------------------------- means that the auditor will falsely place too much reliance on the internal controls and will not collect enough evidence.
    Assessing control risk too low means that the auditor will falsely place too much reliance on the internal controls and will not collect enough evidence.
  18. When a CPA reports on audited financial statements prepared on the cash receipts and disbursements basis of accounting, the report should:
    state that the basis of presentation is a comprehensive basis of accounting other than generally accepted accounting principles.
  19. -------------------------------------- is used for tests of controls.
    Attribute sampling is used for tests of controls.
  20. During an engagement to review the financial statements of a nonissuer, an accountant becomes aware that several leases that should be capitalized are not capitalized. The accountant considers these leases to be material to the financial statements. The accountant decides to modify the standard review report because management will not capitalize the leases. Under these circumstances, the accountant should:
    disclose the departure from the applicable financial reporting framework in a separate paragraph of the accountant's review report.
  21. 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:
    stamped “paid” by the check signer.
  22. If a sample of paid vouchers is examined to verify each are stamped “paid” and stamped only once, this provides assurance that each voucher is ---------------------------------------------------.
    If a sample of paid vouchers is examined to verify each are stamped “paid” and stamped only once, this provides assurance that each voucher is submitted and paid only once.
  23. When using classical variables sampling for estimation, an auditor normally evaluates the sampling results by calculating the possible error in either direction. This statistical concept is known as:
    precision.
  24. To satisfy the valuation assertion when auditing an investment accounted for by the equity method, an auditor most likely would:
    examine the audited financial statements of the investee company.
  25. To establish the --------------------- of an investment accounted for by the equity method is an assertion about an account balance at the period-end
    To establish the valuation of an investment accounted for by the equity method is an assertion about an account balance at the period-end
  26. The ---------------------------------- states that all assets, liabilities, and equity interests are included in the financial statements at appropriate amounts.
    The valuation assertion states that all assets, liabilities, and equity interests are included in the financial statements at appropriate amounts.
  27. The audited financial statements of the investee company might be inspected to provide evidence concerning ---------------------- of investments carried under the equity method
    The audited financial statements of the investee company might be inspected to provide evidence concerning valuation of investments carried under the equity method
  28. In assessing control risk for purchases, an auditor vouches a sample of entries in the voucher register to the supporting documents. Which assertion would this test of controls most likely support?
    Existence
  29. Vouching a sample of recorded entries to supporting documents supports the assertion about --------------------------------------------
    Vouching a sample of recorded entries to supporting documents supports the assertion about existence or occurrence
  30. the -----------------------------------------------------directly affects the valuation of accounts receivable, the auditor's assessment of the allowance amount for reasonableness would provide the most assurance concerning the valuation of accounts receivable.
    the allowance for uncollectible accounts directly affects the valuation of accounts receivable, the auditor's assessment of the allowance amount for reasonableness would provide the most assurance concerning the valuation of accounts receivable.
  31. the allowance for uncollectible accounts directly affects the valuation of accounts receivable, the auditor's assessment of the allowance amount for reasonableness would provide the most assurance concerning the ---------------------------------------------.
    the allowance for uncollectible accounts directly affects the valuation of accounts receivable, the auditor's assessment of the allowance amount for reasonableness would provide the most assurance concerning the valuation of accounts receivable.
  32. defines -------------------------------- as “a difference between the amount, classification, presentation, or disclosure of a reported financial statement item and the amount, classification, presentation, or disclosure that is required for the item to be presented fairly in accordance with the applicable financial reporting framework.”
    defines misstatement as “a difference between the amount, classification, presentation, or disclosure of a reported financial statement item and the amount, classification, presentation, or disclosure that is required for the item to be presented fairly in accordance with the applicable financial reporting framework.”
  33. If the financial statements, including accompanying notes, fail to disclose information that is required by GAAP, the auditor should express a ------------------------------- opinion.
    If the financial statements, including accompanying notes, fail to disclose information that is required by GAAP, the auditor should express a qualified or adverse opinion.
  34. The title of a special-purpose framework report should be “------------------------------------------.”
    The title of a special-purpose framework report should be “Independent Auditor's Report.”
  35. Two assertions for which confirmation of accounts receivable balances provides primary evidence are:
    rights and obligations and existence.
  36. Confirmation of receivables verifies both the --------------------- of the receivable and the ----------------------------------------------------------------------------------.
    Confirmation of receivables verifies both the existence of the receivable and the rights of the entity to be paid the amount owed by the debtor.
  37. The refusal of a client's attorney to provide information requested in an inquiry letter generally is considered:
    a limitation on the scope of the audit.
  38. A lawyer's refusal to cooperate is a limitation of scope sufficient to preclude an ---------------------------------------.
    A lawyer's refusal to cooperate is a limitation of scope sufficient to preclude an unmodified opinion.

What would you like to do?

Home > Flashcards > Print Preview