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6-15 (Objectives 6-6, 6-8) Identify the management assertion and general balance-related audit objective for the specific balance-related audit objective: All recorded fixed assets exist at the balance sheet date.6-16 (Objectives 6-6, 6-8) Explain how management assertions, general balance-related audit objectives, and specific balance-related audit objectives are developed for an account balance such as accounts receivable.6-17 (Objectives 6-6, 6-9) Identify the management assertion and presentation and dis- closure-related audit objective for the specific presentation and disclosure-related audit objective: Read the fixed asset footnote disclosure to determine that the types of fixed assets, depreciation methods and useful lives are clearly disclosed.Chapter 6 / AUDIT RESPONSIBILITIES AND OBJECTIVES 1656-18 (Objective 6-10) Identify the four phases of the audit. What is the relationship of the four phases to the objective of the audit of financial statements?MULTIPLE CHOICE QUESTIONS FROM CPA EXAMINATIONS6-19 (Objective 6-1) The following questions concern the reasons auditors do audits. Choose thebest response.Which of the following best describes the reason why an independent auditor reports on financial statements?(1) A misappropriation of assets may exist, and it is more likely to be detected byindependent auditors.
(2) Different interests may exist between the company preparing the statements andthe persons using the statements.(3) A misstatement of account balances may exist and is generally corrected as theresult of the independent auditor’s work.(4) Poorly designed internal controls may be in existence.Because of the risk of material misstatement, an audit should be planned and per- formed with an attitude of(1) objective judgment. (3) professional skepticism.(2) independent integrity. (4) impartial conservatism.The major reason an independent auditor gathers audit evidence is to (1) form an opinion on the financial statements.(2) detect fraud.(3) evaluate management.(4) assess control risk.6-20 (Objective 6-3) The following questions deal with errors and fraud. Choose the bestresponse.
An independent auditor has the responsibility to design the audit to provide reasonable assurance of detecting errors and fraud that might have a material effect on the financial statements. Which of the following, if material, is a fraud as defined in audit- ing standards?(1) Misappropriation of an asset or groups of assets.(2) Clerical mistakes in the accounting data underlying the financial statements.(3) Mistakes in the application of accounting principles.(4) Misinterpretationoffactsthatexistedwhenthefinancialstatementswereprepared.What assurance does the auditor provide that errors, fraud, and direct-effect illegal acts that arematerial to the financial statements will be detected?