Which of the following assertions would the auditor usually consider most relevant for accounts payable?
Which of the following is a procedure that requests a direct written response to the audit
Clearly trivial and not material are terms that can be used interchangeably.
In most audits, materiality is most commonly expressed as a percentage of net income.
Tolerable misstatement is the amount of misstatement in an account balance that
Which of the following factors should an auditor consider in evaluating the effect of fraud upon the planned
a. The type of fraud that may occur.
b. The potential materiality of fraud.
c. The likelihood of fraud occurring.
Which of the following concepts represents the most expansive aspect of liability for auditors?
Independence in mental attitude is required of auditor on all audit engagements. Which statement best describes
the highest goal for indepen
An example of fraudulent financial reporting is the CFO intentionally overstating sales to boost profits.
Auditors need to consider fraud arising from misappropriation of assets and fraudulent financial reporting.
Corporate governance is a proce
A company's internal auditing function should not be considered when assessing the effectiveness of internal controls.
A deficiency in design of internal controls exists when an existing control is not properly designed so that, even if the
The purpose of the audit program is to list the audit procedures to be followed in gathering audit evidence and to help those in
charge of the audit to monitor the progress and supervise the work.
The PCAOBs general standards provide guidance to audi
Which one of the following represents a control deficiency?
A missing control that is required for achievement of objectives.
Which of the following is not a way management obtains evidence regarding the effectiveness of internal
control over the accounti
A key responsibility of the internal audit function is to provide assurance on the reliability of financial reporting to
external stakeholders of a company.
Auditing exists because users need unbiased information on which to assess management perfor
While inspecting documents, the reliability depends on the nature and source of the documentation.
The type of audit evidence known as inquiry does not ordinarily provide sufficient audit evidence of the absence of a
material misstatement, nor is it
Which governing board performs quality reviews on registered audit firms that audit public companies?
Which organization issued the Internal Control, Integrated Framework which serves as the primary criterion
1. easy c Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called: a. finance. b. auditing. c. accounting. d.
A listing of all the things which the auditor will do to gather sufficient, competent evidence is
a. audit strategy.
b. audit program.
c. audit procedure.
d. audit risk model.
Shown below (1 th
IT has several significant effects on an organization. Which of the following would not be
important from an auditing perspective?
a. Organizational changes.
b. The visibility of information.
c. The potential
Which of the following best defines fraud in a financial statement auditing context?
Fraud is an unintentional misstatement of the financial statements.
Fraud is an intentional misstatement of the finan
If it is probable that the judgment of a reasonable person would have been changed or
influenced by the omission or misstatement of information, then that information is, by
definition of FASB Statement No. 2:
Which of the following is not one of the three main reasons why the auditor should properly
a. To enable proper on-the-job training of employees.
b. To enable the auditor to obtain sufficient
1. easy a The objective of the ordinary audit of financial statements is the expression of an opinion on: a. the fairness of the financial statements. b. the accuracy of the financial statements. c. the accuracy of the
Society has attached a special meaning to the term professional. A professional is:
a. someone who has passed a qualifying exam to enter the job market.
b. a person who is expected to conduct himself or hersel
Auditing standards require that the audit report must be titled and that the title must:
a. include the word independent.
b. indicate if the auditor is a CPA.
c. indicate if the auditor is a proprietorship, pa
Which one of the following is not one of the three General Standards?
a. Proper planning and supervision.
b. Independence of mental attitude.
c. Adequate training and proficiency.
d. Due professional care.
1Chapter 16 Completing the Tests in the Sales and Collection Cycle: Accounts Receivable
16-1 Tests of details of balances are designed to determine the reasonableness of the balances in sales, accounts receivable, and other account balanc