acct 241 ch 11

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wsrdpc
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acct 241 ch 11
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2010-09-05 21:22:01
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acct 241 ch 11
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  1. Which of the following activities is ordinarily performed prior to year end?
    A. audit documentation review
    B. roll forward work
    C. subsequent event review
    D. interim testing
    D. interim testing
    (this multiple choice question has been scrambled)
  2. Procedures used to allow auditors to extend their conclusions to the end of the year under audit are referred to as:
    A. analytical procedures
    B. interim testing
    C. roll forward work
    D. test of controls
    C. roll forward work
    (this multiple choice question has been scrambled)
  3. Which of the following transaction cycle(s) are most closely related to gains or losses on disposals of property, plant and equipment?
    A. finance/investment cycle
    B. revenue/collection cycle
    C. acquistion/expenditure cycle
    d. a and c above
    C. acquistion/expenditure cycle
    (this multiple choice question has been scrambled)
  4. Which of the following procedures is normally not considered in the auditors' substantive procedures for revenue and expense accounts?
    A. evaluate evidence gathered in the audit of balance sheet accounts and examination of transaction cycles
    B. examine "miscellaneous", "other", and "clearing" accounts classified as revenues and expenses
    C. individually confirm significant transactions with 3rd parties
    D. perform analytical procedures to verify the overall reasonableness of revenue and expense accounts
    C. individually confirm significant transactions with 3rd parties
    (this multiple choice question has been scrambled)
  5. Which of the following is typically the auditors' initial procedure performed to identify litigation, claims, and assessments?
    A. perform analytical procedures
    B. confirm litigation, claims, and assessments with 3rd party litigants
    C. obtain an attorney letter from the entity's legal counsel
    D. inquire of the entity regarding the existence of litigation, claims, and assessments
    D. inquire of the entity regarding the existence of litigation, claims, and assessments
    (this multiple choice question has been scrambled)
  6. Which of the following information is not included in the attorney letter?
    A. an estimate of the range of potential loss
    B. the attorney's expert opinion as to the probability of an unfavorable judgement against the entity
    C. a description of each item identified by management, including the nature of the case and management responses or intended responses to the case
    D. a list of pending or threatened litigation, claims, or assessments
    B. the attorney's expert opinion as to the probability of an unfavorable judgement against the entity
    (this multiple choice question has been scrambled)
  7. Which of the following communications is ordinarily signed by auditors?
    A. internal control deficiency letter
    B. attorney letter
    C. management respresentation letter
    d. all of the above are signed by the auditor
    A. internal control deficiency letter
    (this multiple choice question has been scrambled)
  8. Which of the following statements is true with respect to management representations?
    A. management representations may serve as a substitute for various types of substantive
    B. management representations are used to corroborate information obtained during the audit
    C. management representations are signed by auditors and delivered to the entity's officers
    D. management representations are dated as of the balance sheet date
    B. management representations are used to corroborate information obtained during the audit
    (this multiple choice question has been scrambled)
  9. Which of the following procedures would not be performed by auditors to identify subsequent events?
    A. obtain attorney letters from legal counsel engaged by the entity
    B. inquire of officers and other executitves about various matters
    C. review prior year financial statements and disclosures
    D. read minutes of meetings of shareholders, directors, and appropriate committees
    C. review prior year financial statements and disclosures
    (this multiple choice question has been scrambled)
  10. Which of the following types of audit documentation review is focused on ensuring that the quality of audit work and reporting is consistent with the quality standards of the firm?
    A. review of staff work by audit manager
    B. review of staff work by audit supervisor
    C. review of work by audit manager and audit partner
    D. review of work by second (reviewing) partner
    D. review of work by second (reviewing) partner
    (this multiple choice question has been scrambled)
  11. The main purpose of a management representation letter is to:
    A. shift responsibility for financial statements from the management to the auditor
    B. provide management a place to make assertions about the quantity and valuation of the physical inventory
    C. impress upon management its ultimate responsiblity for the financial statements and disclosures
    D. provide a substitute source of auditor evidence for substantive procedures auditors would otherwise perform
    C. impress upon management its ultimate responsiblity for the financial statements and disclosures
    (this multiple choice question has been scrambled)
  12. Which one of these substantive procedures or sources is not used to obtain evidence about contingencies?
    A. obtain a representation letter from the client's attorney
    B. examine terms of sale in sales contracts
    C. scan expense accounts for credit entries
    D. read the minutes of the board of directors' meetings
    C. scan expense accounts for credit entries
    (this multiple choice question has been scrambled)
  13. A type 1 subsequent event involves subsequent inforamtion about a condition that existed at the balance sheet date. Subsequent knowledge of which of the following would casue the company to adjust its December 31 financial statements
    A. Settlement of litigation in February for $100,000 that had been estimated at $12,000 in the December 31 financial statements
    B. storm damage of $1 million to the company's buildings on March 1
    C. sales of an issue of new stock for $500,000 on January 30
    D. Settlement of a damage lawsuit for a customer's injury sustained February 15 for $10,000
    A. Settlement of litigation in February for $100,000 that had been estimated at $12,000 in the December 31 financial statements
    (this multiple choice question has been scrambled)
  14. A. Griffin audited the financial statements of Dodger Magnificant Corporation for the year ended December 31, 2004. She completed the audit fieldwork on January 30 and later learned of a stock split voted by the board of directors on February 5. The financial statements were changed to reflect the split, and she now needs to dual date the auditor report before sending it to the company. Which of the following is the proper form?
    A. February 5, 2005, except for completion of fieldwork for which the date is January 30, 2005
    B. December 31, 2004, except as to Note X which is dated January 30, 2005
    C. January 30, 2005, except as to Note X, which is dated February 5, 2005
    D. December 31, 2004, except as to Note X which is dated February 5, 2005
    D. December 31, 2004, except as to Note X which is dated February 5, 2005
    (this multiple choice question has been scrambled)
  15. The auditing standards regarding "subsequent discovery of facts that existed at the balance sheet date" refers to knowledge obtained after:
    A. the company's year end balance sheet date
    B. the date interim audit work was complete
    C. the date the audit report was delivered to the client
    D. the auditor report date
    C. the date the audit report was delivered to the client
    (this multiple choice question has been scrambled)
  16. Which of the following is ordinarily performed last in the audit examination?
    A. securing a signed engagements letter from the client
    B. obtaining a signed management representation letter
    C. performing a review for subsequent events
    D. performing tests of controls
    B. obtaining a signed management representation letter
    (this multiple choice question has been scrambled)
  17. Hall accepted an engagement to audit the year 1 financial statements XYZ Company. XYZ completed the preparation of the year 1 financial statements on February 13, year 2, and Hall began the fieldwork on February 17, year 2. Hall completed the field on March 24, year 2, and completed the report on March 28, year 2. The management representation letter normally would be dated:
    A. February 17, year 2
    B. February 13, year 2
    C. March 24, year 2
    D. March 28, year 2
    C. March 24, year 2
    (this multiple choice question has been scrambled)
  18. Which of the following substantive procedures should an auditor perform regarding subsequent events?
    A. send second requests to the client's customers who failed to respond to initial accounts receivable confirmation requests
    B. compare the latest available interim statements with the financial statements being audited
    C. review the cutoff bank statements for several months after the year end
    D. Communicate material weaknesses in internal control to the client's audit committee
    B. compare the latest available interim statements with the financial statements being audited
    (this multiple choice question has been scrambled)
  19. Which of the following substantive procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events?
    A. recompute a sample of large dollar transactions occurring after year end for arithmetic accuracy
    B. investigate changes in shareholders' equity occurring after year end
    C. inquire of the entity's legal counsel concerning litigation, claims, and assessments arising after year end
    confirm bank accounts established after year end
    B. investigate changes in shareholders' equity occurring after year end
    (this multiple choice question has been scrambled)
  20. The primary reason an auditor requests letters of inquiry from a client's attorneys is to provide the auditor with:
    A. corroboration of the information furnished by management about litigation, claims, and assessments
    B. a description and evaluation of litigation, claims, and assessments that existed at the balance sheet date
    C. the probable outcome of asserted claims and pending or threatened litigation
    D. the attorney's opinions of the client's historical experience in recent similar litigation
    A. corroboration of the information furnished by management about litigation, claims, and assessments
    (this multiple choice question has been scrambled)

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