6.1 (A) The requirement is to obtain an understanding of the entitys internal controls
planning. Answer (A) is correct because the auditor should obtain an understanding of
of relevant internal controls for financial reporting
1. When planning an audit, the auditors knowledge about the design of relevant internal
controls should be used to
(A) Assess the efficiency of internal controls over operations.
(B) Identify the types of potential misstatements that could occur
1. Which of the following is a conceptual difference between the International Standards
for Assurance Engagements (ISAE) and International Auditing Standards (ISA)?
(A) ISAEs provide a framework for the attest function beyond historical financi
1. Which of the following factors would be most likely to cause a professional auditor in
public practice to decline a new audit engagement?
(A) The prospective client has already completed its physical inventory count.
(B) The auditor lacks an
1. The auditor with final responsibility for an engagement and one of the assistants has a
difference of opinion about the clients application of an accounting method. If the
assistant believes it is necessary to be disassociated with the matter
1. A group that was established in 2002 by the US Congress to oversee and investigate
the audits and auditors of public companies and sanction both firms and individuals for
violations of laws, regulations, and rules is:
(A) The Public Interest
Chapter 1 - Questions
1. An attitude that includes a questioning mind and a critical assessment of audit
evidence is referred to as:
(A) Due professional care.
(B) Professional skepticism.
(C) Reasonable assurance.
2. Which of the followi
1. A basic premise underlying the application of analytical procedures is that:
(A) The study of financial ratios is an acceptable alternative to the investigation of
(B) Statistical tests of financial information may lead
Test Bank for Accounting: Tools for Business Decision Making, Fifth Edition
The Hartman Boat Company's bank statement for the month of November showed a balance per
bank of $7,000. The company's Cash account in the general ledger had a balance of
UNIVERSITY OF THE PHILIPPINES
COLLEGE OF LAW
Bar Operations 2008
LABOR LAW I
Bar Operations Head
LABOR LAW I
TABLE OF CONTENTS
IMPAIRMENT OF ASSETS
Objective of PAS 36
The objective of this Standard is to prescribe the procedures that an entity applies to ensure that its
assets are carried at no more than their recoverable amount. An asset is carried at more than its
1. When considering internal control, an auditor should be aware of the concept of
reasonable assurance, which recognizes that:
(A) Internal control may be ineffective due to mistakes in judgment and personal
(B) Adequate safeguard
1. In obtaining an understanding of an entitys internal controls that are relevant to audit
planning, an auditor is required to obtain knowledge about the:
(A) Design of relevant internal controls pertaining to financial reporting in each of the
6. When auditing related-party transactions, an auditor places primary emphasis on:
(A) Ascertaining the rights and obligations of the related parties.
(B) Confirming the existence of the related parties.
(C) Verifying the valuation of the related
8.1 (B) The answer should describe how knowledge of internal control design may
be used. This
design knowledge is used to identify potential misstatements that could occur. A is
because efficiency of operations is not a direct concern of
7.1 (D) The requirement is to associate the meaning of reasonable assurance with
one of the
statements. Answer (D) is correct because in accounting terms reasonable is a term
the cost_benefit concept, i.e. that the cost of internal co
8.5 (A) The requirement is to determine an inquiry test of controls to assess the
occurrence assertion. Answer (A) is correct because the existence assertion related
would correspond to the audit objective of determining th
11.6 (D) The requirement is to identify the correct statement concerning related-party transactions.
Answer (D) is correct because International Financial Reporting Standards (IAS 24)
requires disclosure of the nature and volume of transactions wi
10A.1 (A) We are to find the answer that represents the concept of sampling risk. Sampling risk
arises from the possibility that the auditors conclusion, based on a sample, may be different from
the conclusion reached if the entire population were
11.1 (D) The requirement is to determine what auditors services International Standards on
Quality Control (ISQC) apply to. Answer (D) is the best answer because ISQCs apply across the
board to all auditors assurance and other related services. An
7.6 (A) The requirement is to find the best statement concerning an auditors
control risk. Answer (A) is correct because assessing control risk may be performed
during an audit with obtaining an understanding of internal
Ch 9 A
9.1 (C) The requirement is to recognize a basic premise on which the application of analytical
procedures is based. Answer (C) is correct because when using analytical procedures one must
assume the source references on which expectations are based
1. International Standards on Quality Control (ISQC) apply to:
(A) Auditing services only.
(B) Auditing and management advisory services.
(C) Auditing and tax services.
(D) Auditing and accounting and review services.
2. One of a certified audit f
1. The objective of tests of details of classes of transactions performed as substantive
tests is to:
(A) Comply with International Financial Reporting Standards.
(B) Attain assurance about the reliability of the information system relevant to
CHAPTER 3 - Audit of Cash &
The following items are found in the cash account of Ivie Company at December 31, 2006.
The companys controller asks your opinion whether the items listed below should be
considered as part of cash ac
Purchases & Cash Disbursements
Luis Antonio C. Bullina
(Special Thanks to)
David N. Ricchiute
Nature of expenditure/disbursement cycle
Purchasing and Cash Disbursement
Common forms and documents
The senior auditor instructed you to prepare a four column proof of cash receipts and disbursements
for the month of August 2008.
The bank reconciliation prepared by Albarando Company at July 31 is reproduced below (All book
disbursements were r