The purpose of tracing a sample of inventory tags to a clients c
inventory items is to determine whether the inventory items
Included on the listing were properly counted.
Included in the listing were properly valued.
Represented by tags were reduc
Which of the following factors is least likely to affect the exten
understanding of the entitys internal controls?
The size and complexity of the entity.
The nature of specific relevant controls.
The amount of time budgeted to complete the engageme
Chapter 9 True and False
If an internal control deficiency is of such magnitude as
to be a material weakness, it may be, but is not required
to be, separately identified and communicated from
other significant deficiencies.
Which of the following situations concerning consistency should the auditor not recognize in the
A change in the specific subsidiaries included in the group of companies for which
consolidated statements are presented.
A change in the percen
Chapter 8 True & False
The auditor may use tests of details of transactions
concurrently as tests of controls.
Your answer is correct.
Tests of details may be dual-purpose tests.
As substantive procedures, tests of details of
Hart, CPA, is engaged to review the Year 2 financial statements of Kell Co., a nonissuer.
Previously, Hart audited Kells Year 1 financial statements and expressed a qualified opinion due
to a scope limitation. Hart decides to include a separ
STUDY UNIT NINE
INTERNAL CONTROL COMMUNICATIONS AND REPORTS
Communicating Internal Control Related Matters Identified in an Audit (AU-C 265) . . . . . .
The Auditors Communication with Those Charged with Governance (AU-C 260
and AS No. 16) . . .
An auditor who is unable to form an opinion on a new clients opening inventory balances may
express an unqualified opinion on the current years
Income statement only.
Balance sheet only.
This answer is correct.
A scope limitation related to beginnin
Unit 15 - MCQ 1
An auditor plans to examine a sample of 20 purchase orders for proper approvals as prescribed
by the clients internal control. One of the purchase orders in the chosen sample of 20 cannot be
found, and the auditor is unable to use alternat
Chapter 14 True & False
After considering managements plans, the auditor may
conclude there is substantial doubt of the entitys ability to
continue as a going concern and should consider the
possible effects on the statements and the adequacy
Chapter 10 True & False
As the combined assessed level of the risk of material
misstatement decreases, the auditor may modify
substantive tests by changing their nature from more
effective to less effective (and less costly) tests.
Chapter 17 Simulations
Types of Opinions (8 Gradable Items)
1. Qualified or adverse. The clients inadequate disclosure regarding its ability to continue
as a going concern is a material misstatement that results in a qualified or an adverse
Chapter 16 Simulations
Auditors Report (8 Gradable Items)
1. Accounting principles. Management is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance with accounting
principles generally accepted
Chapter 15 Simulations
Research (1 Gradable Item)
Answer: AU-C 530.14
Sample Size (6 Gradable Items)
1. Decrease. An increase in the allowable risk of assessing control risk too low, an increase
in the tolerable rate, and a decrease in the expected rate e