ACC450_MC_Solutions_Chpt2

ACC450_MC_Solutions_Chpt2 -...

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Chapter 2  SOLUTIONS FOR MULTIPLE-CHOICE QUESTIONS 2.28 a. Correct Gathering audit evidence is a component of the performance principle. b. Incorrect While reasonable assurance is related to gathering audit evidence, this is not one  of the categories of principles c. Incorrect The reporting principle relates to the contents of the auditors’ report d. Incorrect The responsibilities principle relates to the personal integrity and professional  qualifications of auditors. 2.29 a.  Incorrect This practice relates to accountants’ competence and capabilities, not due care. b.  Incorrect This practice relates to the reporting principle. c.  Incorrect Sufficiency of evidence relates to the performance principle and not due care. d.  Correct These practices are a part of due care. 2.30 a.  Incorrect GAAS relates to the conduct of  audit engagements  and not overall professional  services. b.  Correct Standards within a system of quality control are firm- (rather than auditor-)  related. c.  Incorrect GAAP relates to accounting and financial reporting, rather than auditing  practices. d.  Incorrect International auditing standards govern the conduct of audits conducted across  international borders. 2.31 a. Incorrect Relying more extensively on external evidence is related to the appropriateness  (or quality) of evidence. b. Incorrect Focusing on items with more significant financial effects on the financial  statements is related to materiality. c. Correct Professional skepticism is characterized by appropriate questioning and a  critical assessment of audit evidence. d. Incorrect Financial interests are most closely related to auditors’ independence. 2.32 a. Correct Auditors study internal control to determine the nature, timing, and extent  of substantive tests. b. Incorrect Consulting suggestions are secondary objectives in an audit. c. Incorrect Information about the entity’s internal control is, at best, indirect evidence about  assertions in the financial statements. d. Incorrect Information about the entity’s internal control provides auditors with little  opportunity to learn about changes in accounting principles.
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2.33 a. Incorrect External evidence is considered to be relatively reliable. b.
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This note was uploaded on 06/17/2011 for the course ACC 450 taught by Professor Null during the Spring '11 term at GWU.

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ACC450_MC_Solutions_Chpt2 -...

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