Week 5 Extended Study Auditing Exam

Topics: Auditing, Audit, Internal control Pages: 19 (3630 words) Published: December 2, 2013
1) If reported sales for 2010 erroneously include sales that occur in 2011, the assertion violated on the 2010 statements would be: a. presentation and disclosure
b. valuation or allocation
c. existence or occurrence
d. completeness

2. The completeness assertion would be violated if
a. disclosure in the statements of pledged receivables was inadequate b. unbilled shipments occurred during the period
c. fictitious sales transactions were included in accounts receivable d. the allowance for doubtful accounts was understated
 
2) The rights and obligations assertion applies to:

 A: Transactions on accounts

3) Which of the following assertions is NOT made by management in placing an item in the financial statements?

a. Presentation and disclosure
b. Rights and obligations
c. Existence or occurrence
d. Direct controls 

4) Section 11 of the Securities Act of 1933 uses the term material fact to limit the amount of information required. Under the Act, the standard used to determine an item’s materiality

a. is the average prudent investor
b. is the auditor's professional judgement
c. has been established by the SEC as a percent of net income or of total assets d. may be found in FASB pronouncements 

5) Individuals or entities the auditor knew or should have known and would rely on the audit report in making business and investment decisions are a. foreseeable parties
b. third parties
c. foreseen beneficiaries
d. primary beneficiaries
 
6) Section 18 liability is relatively narrow in scope because it relates to a false or misleading statement in documents filed with the A: SEC
 
7) Within generally accepted auditing standards, general standards relate primarily to  a. the fairness of the financial statements
b. qualifications of the auditor and the quality of the auditor's work c. qualifications of the auditor
d. the relationship between generally accepted auditing standards and accounting principles

7) Statements on auditing standards (SAS) are interpretations of what? A: Publications issued by the ASB
8) Which of the following best describes the relationship that should exist between the external auditor and the management of the client company? A: Professional level
 
10) Statement on Quality Control Standards No. 2 identifies certain quality control elements that should be considered when performing which types of services?   a. Auditing, accounting and tax services

b. Auditing, accounting and review services
c. Auditing, tax and review services
d. Accounting, tax and review services 

11) Internal auditors are primarily involved with
A: One company
 
12) The Government Accounting Office reports directly to the  a. US Congress
b. public via news media
c. president
d. IRS

13) With respect to audit objectives, the term validity relates to which of the assertions below? A: Existence or Occurrence
 
14) Which of the following procedures consists of
seeking information from knowledgeable persons throughout or outside the entity?
a. Reperformance
b. Inquiry
c. Confirmation
d. Recalculation

15) Specific audit objectives are normally
a. developed for each item in the financial statements
b. developed for each item in the financial statements and
derived from the categories of management's financial statement assertions c. the same as the categories of management's financial
statement assertions
d. derived from the categories of management's financial
statement assertions.

 
16) The assessment of inherent risk requires considering matters that have a pervasive effect on assertions for all or many accounts and matters that may pertain only to assertions for specific accounts. Which of the following is an example of a pervasive effects matter?  

17) The assessment of inherent risk requires considering matters that have a pervasive effect on assertions for all or many accounts and matters that may pertain only to assertions for specific accounts. Which of...
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