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Unformatted text preview: ements an auditor tests only a sample of transactions that occurred. 1-9 What are the major phases of an audit? 1-10 The auditor’s understanding of the entity and its environment should include knowledge of which categories of information? 1-11 Identify the four paragraphs of the auditor’s standard unqualified report for a public company client. 1-12 Briefly discuss why auditors must often exercise creativity and innovation in auditing financial statements. Give an example different from the one offered in the text. M ULTIPLE-CHOICE QUESTIONS All applicable questions are available with McGraw-Hill’s Connect™ Accounting. LO 2,3,5 LO 2,3,5 mes25435_ch01_001-032.indd mes25435_ch01_001-032.indd 27 1-13 An independent audit aids in the communication of economic data because the audit a. Confirms the exact accuracy of management’s financial representations. b. Lends credibility to the financial statements. c. Guarantees that financial data are fairly presented. d. Assures the readers of financial statements that any fraudulent activity has been corre...
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This note was uploaded on 12/08/2012 for the course ACCT 564 at Washington University in St. Louis.

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