Which Of The Following Statements Is True Of Services Provided By Brokers?

The objective of an audit of the financial statements is an expression of an opinion on

A) the fairness of the fiscal statements in all cloth respects.

B) the accuracy of the financial statements.

C) the accurateness of the annual report.

D) the accuracy of the balance sheet and income statement.

A) the fairness of the financial statements in all textile respects.

If the accountant believes that the financial statements are notfairly stated or is unable to attain a conclusion because of insufficient evidence, the auditor

A) should withdraw from the engagement.

B) should request an increase in audit fees so that more resource can be used to conduct the audit.

C) has the responsibility of notifying financial statement users through the auditor's study.

D) should notify regulators of the circumstances.

C) has the responsibility of notifying financial statement users through the auditor's written report.

Auditors accrue evidence to

A) defend themselves in the event of a lawsuit.

B) make up one's mind if the financial statements are correct.

C) satisfy the requirements of the Securities Acts of 1933 and 1934.

D) reach a decision about the fairness of the fiscal statements.

D) reach a conclusion about the fairness of the fiscal statements.

Which of the following is notone of the steps used to develop audit objectives?

A) know the proper type of audit opinion to issue

B) split up the financial statements into cycles

C) know the direction assertions well-nigh the fiscal statements

D) know the specific audit objectives for classes of transactions

A) know the proper blazon of inspect opinion to outcome

When developing the audit objectives, the outset step is to split up the financial statements into cycles.

TRUE OR Faux

Fake

The responsibility for adopting sound accounting policies and maintaining adequate internal command rests with the

A) lath of directors.

B) company management.

C) fiscal argument auditor.

D) company's internal audit department.

B) company management.

In certifying their almanac financial statements, the CEO and CFO of a public company certify that the financial statements comply with the requirements of

A) GAAP.

B) the Sarbanes-Oxley Human action.

C) the Securities Exchange Act of 1934.

D) GAAS.

C) the Securities Exchange Act of 1934.

Which of the following statements is true of a public visitor'due south fiscal statements?

A) Sarbanes-Oxley requires only the CEO to certify the fiscal statements.

B) Sarbanes-Oxley requires but the CFO to certify the fiscal statements.

C) Sarbanes-Oxley requires both the CEO and CFO to certify the fiscal statements.

D) Sarbanes-Oxley requires neither the CEO nor the CFO to certify the financial statements.

C) Sarbanes-Oxley requires both the CEO and CFO to certify the financial statements.

The responsibility for the preparation of the fiscal statements and the accompanying footnotes belongs to

A) the auditor.

B) direction.

C) both management and the auditor equally.

D) management for the statements and the auditor for the notes.

B) direction.

Considering they operate the business on a daily basis, a visitor's management knows more virtually the company'due south transactions and related assets, liabilities, and equity than the auditors.

True OR FALSE

Truthful

The annual reports of many public companies include a statement nearly management's responsibilities and relationship with the CPA firm.

TRUE OR False

True

The auditors determine which disclosures must be presented in the fiscal statements.

True OR FALSE

Fake

The Sarbanes-Oxley Act provides for criminal penalties.

Truthful OR Imitation

True

The auditor's best defense force when cloth misstatements are notuncovered is to have conducted the audit

A) in accordance with generally accepted auditing standards.

B) equally effectively as reasonably possible.

C) in a timely manner.

D) only after an adequate investigation of the management team.

A) in accord with generally accepted auditing standards.

Which of the post-obit is notone of the reasons that auditors provide only reasonableassurance on the financial statements?

A) The auditor ordinarily examines a sample, rather than the entire population of transactions.

B) Bookkeeping presentations contain circuitous estimates which involve dubiousness.

C) Fraudulently prepared financial statements are often difficult to detect.

D) Auditors believe that reasonable balls is sufficient in the vast majority of cases.

D) Auditors believe that reasonable assurance is sufficient in the vast majority of cases.

Which of the following statements is the most correct regarding errors and fraud?

A) An error is unintentional, whereas fraud is intentional.

B) Frauds occur more often than errors in financial statements.

C) Errors are ever fraud and frauds are always errors.

D) Auditors take more responsibility for finding fraud than errors.

A) An error is unintentional, whereas fraud is intentional.

When an auditor believes that an illegal deed may take occurred, the auditor should first

A) obtain an understanding of the nature and circumstances of the human activity.

B) consult with legal counsel or others knowledgeable about the illegal deed.

C) talk over the matter with the audit commission.

D) withdraw from the engagement.

A) obtain an agreement of the nature and circumstances of the act.

The auditor has no responsibleness to plan and perform the audit to obtain reasonable assurance that misstatements that are not________ are detected.

A) important to the financial statements

B) statistically significant to the financial statements

C) textile to the fiscal statements

D) identified past the customer

C) material to the fiscal statements

Fraudulent financial reporting is most likely to be committed by whom?

A) line employees of the company

B) outside members of the company'south board of directors

C) company management

D) the company's auditors

C) company management

Which of the following would almost likely be deemed a direct effect illegal act?

A) violation of federal employment laws

B) violation of federal environmental regulations

C) violation of federal income tax laws

D) violation of civil rights laws

C) violation of federal income tax laws

The concept of reasonable balls indicates that the auditor is

A) not a guarantor of the correctness of the financial statements.

B) non responsible for the fairness of the financial statements.

C) responsible merely for issuing an opinion on the financial statements.

D) responsible for finding all misstatements.

A) not a guarantor of the correctness of the financial statements.

Which of the following is the auditor least likely to do when aware of an illegal act?

A) discuss the thing with the customer's legal counsel

B) obtain evidence virtually the potential outcome of the illegal deed on the fiscal statements

C) contact the local law enforcement officials regarding potential criminal wrongdoing

D) consider the impact of the illegal act on the human relationship with the company's management

C) contact the local law enforcement officials regarding potential criminal wrongdoing

An auditor discovers that the company's bookkeeper unintentionally made an fault in calculating the amount of the quarterly sales. This is an case of

A) employee fraud.

B) an fault.

C) misappropriation of avails.

D) a defalcation.

B) an error.

An accountant has a duty to

A) provide reasonable assurance that textile misstatements will be detected.

B) be a guarantor of the fairness in the statements.

C) exist as responsible with management for the grooming of the financial statements.

D) be an insurer of the fairness in the statements.

A) provide reasonable balls that fabric misstatements volition exist detected.

If the accountant were responsible for making certain that all of direction'due south assertions in the financial statements were absolutely correct,

A) bankruptcies could no longer occur.

B) bankruptcies would be reduced to a very small number.

C) audits would be much easier to complete.

D) audits would non be economically practical.

D) audits would not be economically applied.

When dealing with laws and regulations that do nothave a direct effect on the financial statements, the auditor

A) should inquire of management most whether the entity is in compliance with such laws and regulations.

B) has no responsibility to determine if whatever violations of these laws has occurred.

C) must report all violations, including inconsequential violations, to the inspect committee.

D) should perform the same procedures as for violations having a direct effect on the financial statements.

A) should enquire of management nearly whether the entity is in compliance with such laws and regulations.

Which of the following statements is usually true?

A) Materiality is piece of cake to quantify.

B) Fraudulent financial statements are often easy for the auditor to notice, particularly when there is bunco among management.

C) Reasonable balls is a depression level of assurance that the financial statements are complimentary from material misstatement.

D) An item is considered fabric if information technology would likely have changed or influenced the decisions of a reasonable person using the statements.

D) An item is considered material if it would probable accept inverse or influenced the decisions of a reasonable person using the statements.

Auditing standards make ________ stardom(south) betwixt the auditor's responsibilities for searching for errors and fraud.

A) little

B) a significant

C) no

D) various

C) no

In comparison direction fraud with employee fraud, the auditor's take a chance of failing to discover the fraud is

A) greater for management fraud because managers are inherently more deceptive than employees.

B) greater for management fraud because of management'southward ability to override existing internal controls.

C) greater for employee fraud considering of the higher crime rate amongst blueish collar workers.

D) greater for employee fraud because of the larger number of employees in the organization.

B) greater for management fraud considering of management'due south ability to override existing internal controls.

Misappropriation of assets

A) is generally committed past company direction.

B) harms the users of the fiscal statements past providing them incorrect financial information for their decision making.

C) causes impairment to stockholders because the avails are no longer available to their rightful owners.

D) causes the financial statements to be misstated since the misappropriation usually involves material amounts.

C) causes harm to stockholders considering the assets are no longer bachelor to their rightful owners.

When comparing the auditor's responsibleness for detecting employee fraud and for detecting errors, the profession has placed the responsibility

A) more on discovering errors than employee fraud.

B) more on discovering employee fraud than errors.

C) equally on discovering errors and employee fraud.

D) on the senior auditor for detecting errors and on the director for detecting employee fraud.

C) equally on discovering errors and employee fraud.

If there is collusion among management, the chance a normal audit would uncover such acts is

A) very low.

B) very high.

C) zip.

D) none of the to a higher place.

A) very low.

When the auditor becomes aware of or suspects noncompliance with laws and regulations

A) the accountant should evaluate the furnishings of the noncompliance on other aspects of the inspect.

B) the accountant should talk over the affair with management at a level in a higher place those suspected of the noncompliance.

C) the auditor should obtain additional data to evaluate the possible effects on the financial statements.

D) all of the above

D) all of the above

When the accountant identifies or suspects noncompliance with laws and regulations, the auditor

A) should discuss the affair with those whom they believe committed the illegal act.

B) begin communication with the FASB in accordance with PCAOB regulations.

C) may disclaim an opinion on the basis of scope limitations if he is precluded past management from obtaining sufficient advisable bear witness.

D) should withdraw from the date.

C) may disclaim an opinion on the ground of scope limitations if he is precluded past direction from obtaining sufficient appropriate evidence.

When an auditor knows that an illegal act has occurred, she must

A) report it to the proper governmental authorities.

B) consider the furnishings on the financial statements, including the capability of disclosure.

C) withdraw from the appointment.

D) issue an adverse opinion.

B) consider the effects on the financial statements, including the adequacy of disclosure.

Which of the post-obit is an accurate statement concerning the auditor'due south responsibility to consider laws and regulations?

A) Auditors tin can follow an like shooting fish in a barrel, step-by-step procedure to determine how laws and regulations impact the financial statements.

B) The accountant's responsibility will depend on whether the laws or regulations are expected to accept a direct impact on the financial statements.

C) It is the responsibility of the accountant to determine if an act constitutes noncompliance.

D) The auditor must inform an outside political party if management has knowingly not complied with a police force or regulation.

B) The accountant's responsibility will depend on whether the laws or regulations are expected to have a direct impact on the fiscal statements.

Which of the following statements best describes the accountant'south responsibleness with respect to illegal acts that exercise nothave a material effect on the client'southward financial statements?

A) By and large, the auditor is under no obligation to notify parties other than personnel within the client's organization.

B) Generally, the accountant is nether an obligation to inform the PCAOB.

C) Generally, the auditor is obligated to disclose the relevant facts in the auditor's report.

D) Generally, the auditor is expected to compel the client to adhere to requirements of the Foreign Corrupt Practices Human activity.

A) Generally, the accountant is nether no obligation to notify parties other than personnel within the client'southward organization.

Which of the following statements best describes the accountant's responsibility regarding the detection of fraud?

A) The accountant is responsible for the failure to detect fraud only when such failure clearly results from nonperformance of inspect procedures specifically described in the engagement letter.

B) The auditor is required to provide reasonable assurance that the financial statements are free of both material errors and fraud.

C) The auditor is responsible for detecting material financial statement fraud, but not a material misappropriation of assets.

D) The auditor is responsible for the failure to detect fraud only when an unqualified opinion is issued.

B) The accountant is required to provide reasonable assurance that the financial statements are free of both material errors and fraud.

When reporting identified or suspected noncompliance,

A) the auditor must report inconsequential noncompliance to the inspect commission.

B) the auditor should communicate all material noncompliance matters to those charged with governance.

C) any intentional noncompliance must be reported to local law enforcement.

D) all noncompliance, whether fabric or not, must result in a disclaimer of stance.

B) the auditor should communicate all material noncompliance matters to those charged with governance.

Another term for misappropriation of assets is

A) management fraud.

B) collusion.

C) employee fraud.

D) illegal acts.

C) employee fraud.

The provisions of many laws and regulations touch on the fiscal statements

A) directly.

B) only indirectly.

C) both direct and indirectly.

D) materially if direct; immaterially if indirect.

B) merely indirectly.

If a client has violated federal tax laws,

A) the accountant must notify the IRS.

B) and the amount is pregnant, the auditor should communicate with those charged with governance.

C) the noncompliance generally will not touch the financial statements.

D) the accountant does non need to evaluate the effects of the noncompliance on other aspects of the audit.

B) and the amount is significant, the auditor should communicate with those charged with governance.

Errors are commonly more difficult for an auditor to detect than frauds.

Truthful OR Imitation

Faux

Other than inquiring of management near policies they have established to foreclose illegal acts and whether direction knows of whatever laws or regulations that the visitor has violated, the auditor should not search for illegal acts that do not have a direct event on the financial statements unless there is reason to believe they may exist.

TRUE OR FALSE

Truthful

When an accountant believes that an illegal act may have occurred, the first step he or she should accept is to gather boosted testify to determine the extent of the illegality and if there is a straight impact on the fiscal statements.

TRUE OR False

True

Audits are expected to provide a college degree of assurance for the detection of textile frauds than is provided for an equally material error.

Truthful OR FALSE

Simulated

Auditors have a higher caste of responsibility for detecting illegal acts that have a directly effect on the financial statements than illegal acts that practise non accept a direct effect on the financial statements.

True OR FALSE

TRUE

The auditor'southward first form of action when an illegal act is uncovered should be to immediately notify the advisable authorities, including but not limited to, law enforcement and the Securities and Exchange Commission.

Truthful OR FALSE

FALSE

An audit mostly provides no balls that illegal acts that do non take a direct consequence on the financial statements will be detected.

TRUE OR FALSE

Truthful

Auditing standards indicate that reasonable balls is a moderate, simply not accented, level of assurance that the financial statements are free of material misstatement.

TRUE OR FALSE

Imitation

In obtaining reasonable balls that the fiscal statements are free of material misstatement, the auditor does notneed to take into business relationship the applicable legal and regulatory framework relevant to the client.

True OR FALSE

FALSE

In obtaining reasonable assurance that the financial statements are complimentary of material misstatement, the accountant takes into account applicable legal and regulatory frame- works relevant to the customer.

The objective of the audit of financial statements by an independent auditor is to verify that the financial statements are free of misstatements and accurately represent the visitor'south financial position and results of operations.

Truthful OR Imitation

FALSE

Every bit the impact from noncompliance is further removed from affecting the financial statements, the less likely the accountant is to become aware of or recognize noncompliance when auditing the financial statements.

TRUE OR FALSE

Truthful

An inspect must exist performed with an mental attitude of professional skepticism. Professional person skepticism consists of two primary components: a questioning mind and

A) the assumption that upper-level direction is dishonest.

B) a critical assessment of the audit evidence.

C) the assumption that all employees are motivated by greed.

D) verification of all critical information by independent third parties.

B) a disquisitional cess of the audit testify.

Which of the following is an accurate statement nearly professional skepticism?

A) Professional person skepticism involves a critical assessment of the evidence.

B) Professional skepticism is easy to implement in practice.

C) It is easy for auditors to sympathize that their clients may try to deceive them throughout the inspect procedure.

D) Professional skepticism is just necessary for the audits of public companies.

A) Professional skepticism involves a disquisitional cess of the show.

One of the characteristics of professional skepticism is ________, which is the confidence to decide for oneself, rather than accepting the claims of others.

A) interpersonal understanding

B) autonomy

C) break of judgment

D) self-esteem

B) autonomy

A questioning mindset

A) means the auditor must show every argument that direction makes to them.

B) ways the accountant should approach the audit with a "exercise not trust anyone" mental outlook.

C) assures that the accountant will only accept honest clients.

D) means the auditor should approach the audit with a "trust only verify" mental outlook.

D) ways the auditor should approach the audit with a "trust but verify" mental outlook.

One of the characteristics of professional skepticism is_______, which is a want to investigate beyond the obvious.

A) self-esteem

B) an interpersonal understanding

C) a search for cognition

D) a questioning mindset

C) a search for knowledge

________ is the self-confidence to resist persuasion and to challenge assumptions or conclusions.

A) Self-esteem

B) Interpersonal agreement

C) Suspension of judgment

D) Autonomy

A) Self-esteem

An auditor should recognize that the application of auditing procedures may produce bear witness indicating the possibility of errors of fraud and therefore should

A) plan and perform the date with an attitude of professional skepticism.

B) not rely on internal controls that are designed to foreclose or observe errors or fraud.

C) pattern audit tests to detect unrecorded transactions.

D) extend the work to inspect the bulk of the recorded transactions and records of an entity.

A) plan and perform the date with an attitude of professional person skepticism.

Auditors often convince themselves that they simply accept clients they can trust and who accept loftier integrity.

TRUE OR FALSE

Truthful

A suspension of judgment is the recognition that people's motivations and perceptions can lead them to provide biased or misleading information.

True OR Simulated

FALSE

The starting point to constructive professional judgment begins with

A) gathering the facts.

B) identifying alternatives.

C) identifying relevant literature.

D) identifying and defining the issue.

D) identifying and defining the effect.

Which of the post-obit is nota step in the professional judgment process?

A) make the determination

B) perform the assay

C) determine the type of audit opinion

D) review and document the rationale for the conclusion

C) determine the type of inspect opinion

________ is the tendency to make assessments by starting from an initial value and then adjusting insufficiently away from that initial value.

A) Anchoring

B) Availability

C) Overconfidence

D) Confirmation

A) Anchoring

When the auditor considers whether he understands the grade and substance of the transaction or effect, and whether the relevant authoritative literature has been applied consistently past the client, he is performing which pace in the professional judgment process?

A) identifying and defining the outcome

B) performing the assay and identifying potential alternatives

C) making the decision

D) gathering the facts

B) performing the analysis and identifying potential alternatives

When performing the review and completing the documentation and rationale for the conclusion pace of the professional judgment procedure, auditors will

A) consider the bookkeeping and auditing standards relevant to the issues.

B) clear in written form the rationale of their judgment.

C) identify the issue.

D) gather the facts.

B) articulate in written class the rationale of their judgment.

The profession has developed professional judgment frameworks that illustrate an effective decision-making process.

Truthful OR FALSE

TRUE

During the professional judgment process, the analysis may identify only ane appropriate response to the result.

TRUE OR False

FALSE

Overconfidence is the tendency to put more weight on information that is consistent with the initial behavior or preferences.

Truthful OR Faux

FALSE

In order to mitigate availability, the auditor should consult with others and brand the opposing example.

TRUE OR Imitation

Truthful

Why does the auditor divide the financial statements into smaller segments?

A) Using the cycle approach makes the audit more manageable.

B) Virtually accounts take few relationships with others and so it is more efficient to break the financial statements into smaller pieces.

C) The cycle approach is used because auditing standards crave it.

D) All of the above are correct.

A) Using the wheel approach makes the audit more manageable.

Why does the auditor divide the financial statements into segments effectually the financial statement cycles?

A) Most auditors are trained to audit cycles equally opposed to entire fiscal statements.

B) The approach aids in the assignment of tasks to different members of the audit team.

C) The wheel approach is required past auditing standards.

D) The cycle approach allows the accountant to detect illegal acts.

B) The arroyo aids in the assignment of tasks to different members of the audit team.

The most important general ledger account included in and affecting several cycles is the

A) cash account.

B) inventory account.

C) income taxation expense and liability accounts.

D) retained earnings account.

A) greenbacks account.

When using the wheel approach to segmenting the inspect, the reason for treating capital acquisition and repayment separately from the conquering of goods and services is that

A) the transactions are related to financing a visitor rather than to its operations.

B) nearly capital acquisition and repayment cycle accounts involve few transactions, but each is often highly textile and therefore should be audited extensively.

C) Both A and B are right.

D) Neither A nor B is right.

C) Both A and B are correct.

In describing the cycle approach to segmenting an audit, which of the following statements is nottrue?

A) All general ledger accounts and journals are included at to the lowest degree once.

B) Some journals and general ledger accounts are included in more than than ane wheel.

C) The "capital acquisition and repayment" cycle is closely related to the "acquisition of goods and services and payment" cycle.

D) The "inventory and warehousing" cycle may be audited at any time during the engagement since it is unrelated to the other cycles.

D) The "inventory and warehousing" bicycle may be audited at any fourth dimension during the engagement since it is unrelated to the other cycles.

The wheel approach to auditing

A) ties to the way transactions are recorded in journals and and so summarized in the general ledger and fiscal statements.

B) cannot combine transactions recorded in dissimilar journals with the general ledger balances that consequence from those transactions.

C) is the only way of segmenting an audit.

D) assumes that each business relationship has two or more cycles associated with information technology.

A) ties to the way transactions are recorded in journals and so summarized in the general ledger and fiscal statements.

Which remainder sheet accounts are included in the payroll and personnel bike?

A) greenbacks in depository financial institution, accrued payroll, merchandise accounts receivable

B) accrued payroll, notes payable, and deferred taxation

C) accrued payroll, cash in banking concern, and accrued payroll taxes

D) salaries and commissions, greenbacks in bank, accrued payroll taxes

C) accrued payroll, cash in depository financial institution, and accrued payroll taxes

Under the bicycle approach to segmenting an audit, transactions recorded in dissimilar journals should never be combined with the general ledger balances that outcome from those transactions.

TRUE OR FALSE

Imitation

Under the bike approach, the only accounts that have two or more than cycles associated with them are cash and accounts receivable.

True OR Fake

Fake

Although auditors need to consider the interrelationships between cycles, they typically treat cycles independently to the extent practical to manage complex audits effectively.

TRUE OR Simulated

TRUE

When examining the relationships of the five cycles and general greenbacks, the cycles have no showtime or cease except at the origin or final disposition of the company.

True OR FALSE

True

Auditors accept found that generally the most efficient and effective way to comport audits is to

A) obtain consummate assurance nearly the definiteness of each class of transactions affecting the account.

B) obtain some combination of assurance for each class of transactions and for the ending rest in the related accounts.

C) obtain balls almost the ending balance of the account just.

D) verify each entry that was made into an business relationship.

B) obtain some combination of balls for each class of transactions and for the ending balance in the related accounts.

The term audit objective refers to all of the following exceptfor

A) transaction-related inspect objectives.

B) presentation and disclosure-related audit objectives.

C) balance-related audit objectives.

D) bike-related audit objectives.

D) cycle-related audit objectives.

When an accountant is determining what information to include in the notes to the financial statements relating to bonds payable, he is concerned with the transaction-related inspect objectives.

True OR FALSE

Fake

It is generally impractical for the auditor to obtain consummate assurance nearly the correctness of each class of transactions.

TRUE OR Imitation

TRUE

Which of the following is notone of the AICPA categories of assertions?

A) assertions about classes of transactions and events for the catamenia under audit

B) assertions about financial statements and correspondence to GAAP

C) assertions about business relationship balances at menstruum end

D) assertions nigh presentation and disclosure

B) assertions about fiscal statements and correspondence to GAAP

If a curt-term note payable is included in the accounts payable residual on the financial statement, in that location is a violation of the

A) completeness assertion.

B) existence exclamation.

C) cutoff assertion.

D) classification assertion.

D) nomenclature exclamation.

International auditing standards and U.S. GAAP classify assertions into three categories. Which of the following is nota category of assertions that management makes almost the accounting information in financial statements?

A) assertions near classes of transactions for the catamenia under audit

B) assertions virtually account balances at period stop

C) assertions about the quality of source documents used to prepare the financial statements

D) assertions about presentation and disclosure

C) assertions about the quality of source documents used to prepare the financial statements

Management assertions are

A) directly related to the financial reporting framework used by the company, usually U.S. GAAP or IFRS.

B) stated in the footnotes to the financial statements.

C) explicitly expressed representations about the financial statements.

D) provided to the auditor in the assertions letter, merely are not disclosed on the financial statements.

A) straight related to the financial reporting framework used by the company, normally U.S. GAAP or IFRS.

Direction makes the following assertions about account balances:

A) existence, completeness, nomenclature and cutoff.

B) existence, accuracy, classification and rights and obligations.

C) existence, abyss, valuation and resource allotment, and rights and obligations.

D) beingness, completeness, rights and obligations, and cutoff.

C) existence, completeness, valuation and resource allotment, and rights and obligations.

Management'south disclosure of the amount of unfunded pension obligations and the assumptions underlying these amounts is an example of the ________ exclamation.

A) completeness

B) existence

C) accurateness and valuation

D) rights and obligations

C) accuracy and valuation

Which of the following assertions is described as "this exclamation addresses whether all transactions that should be included in the financial statements are in fact included"?

A) occurrence

B) completeness

C) rights and obligations

D) beingness

B) abyss

Which of the following management assertions is notassociated with classes of transactions and events?

A) occurrence

B) classification

C) accuracy

D) rights and obligations

D) rights and obligations

With increases in the complication of transactions and the demand for expanded disclosures nigh these transactions, assertions about the ________ have increased in importance.

A) existence

B) account balances

C) presentation and disclosure

D) classes of transactions

C) presentation and disclosure

Relevant assertions have a meaningful begetting on whether the account is fairly stated and are used to assess the risk of fabric misstatement and the pattern and performance of audit procedures.

True OR False

True

The auditor's audit objectives follow and are closely related to direction assertions.

TRUE OR FALSE

TRUE

Which of the post-obit statements is true regarding the stardom betwixt general inspect objectives and specific audit objectives for each form of transactions?

A) The specific audit objectives are applicable to every form of transactions.

B) The general audit objectives are applicative to every course of transactions.

C) In one case the specific transaction-related audit objectives are established, they can exist used to develop the general transaction-related objectives.

D) For any given class of transactions, commonly only i audit objective must be met to conclude the transactions are properly recorded.

B) The general inspect objectives are applicable to every class of transactions.

The auditor is determining that the correct selling toll was used for billing and that the quantity of goods shipped was the same as the quantity billed. She is gathering evidence virtually which transaction-related inspect objective?

A) existence

B) completeness

C) accurateness

D) cutting-off

C) accuracy

The posting and summarization audit objective is the auditor's analogue to management's assertion of

A) occurrence.

B) completeness.

C) accuracy.

D) classification.

C) accuracy.

________ deals with potential overstatement and ________ deals with understatements (unrecorded transactions).

A) Occurrence; completeness

B) Completeness; occurrence

C) Accuracy; classification

D) Classification; accuracy

A) Occurrence; completeness

Full general transaction-related audit objectives vary from audit to audit, depending on the nature and characteristics of the customer'due south business and industry.

TRUE OR FALSE

Fake

The audit objective of posting and summarization is associated with the management assertion of accuracy.

TRUE OR FALSE

True

The transaction-related audit objective of timing is related to the assertion of cutoff.

True OR Imitation

Truthful

If a sale was for a valid shipment, merely the amount of the sales invoice was calculated incorrectly, the accuracy objective was violated.

TRUE OR Imitation

TRUE

The outcome of a violation of the completeness transaction-related audit objective for cash disbursements transactions would be an overstatement of greenbacks disbursements.

True OR FALSE

Faux

The transaction-related audit objective that deals with whether recorded transactions have actually occurred is the completeness objective.

TRUE OR FALSE

Faux

In testing for cutoff, the objective is to determine

A) whether all of the electric current period's transactions are recorded.

B) whether transactions are recorded in the correct accounting period.

C) the proper cutoff betwixt capitalizing and expensing expenditures.

D) the proper cutoff between disclosing items in footnotes or in account balances.

B) whether transactions are recorded in the correct accounting menstruation.

The particular tie-in objective is notconcerned that the details in the business relationship balance

A) agree with related subsidiary ledger amounts.

B) are properly disclosed in accordance with GAAP.

C) foot to the total in the business relationship residue.

D) concord with the total in the general ledger.

B) are properly disclosed in accordance with GAAP.

The detail tie-in is part of the ________ assertion for account balances.

A) nomenclature

B) valuation and resource allotment

C) rights and obligations

D) completeness

B) valuation and allocation

The nomenclature balance-related audit objective

A) involves determining if items included on a client's list are included in the correct general leger accounts.

B) is the counterpart to the management assertion of completeness.

C) involves determining if items included on a client'due south list are disclosed properly in the financial statements.

D) involves tying in the account balances to the full general ledger.

A) involves determining if items included on a client's listing are included in the correct general leger accounts.

Remainder-related audit objectives

A) are never applied to income argument accounts.

B) are designed to discover fraud.

C) provide a framework to help the accountant accumulate sufficient appropriate evidence related to account balances.

D) tin can have but one specific-related audit objectives.

C) provide a framework to help the accountant accumulate sufficient appropriate evidence related to account balances.

Which of the following statements is nottrue?

A) Remainder-related inspect objectives are applied to ending account balances.

B) Transaction-related audit objectives are practical to classes of transactions.

C) Balance-related inspect objectives are applied to the ending balance in residue sheet accounts.

D) Residual-related inspect objectives are practical to both beginning and ending balances in balance canvas accounts.

D) Residuum-related audit objectives are applied to both showtime and ending balances in balance sheet accounts.

Determining that the footnote disclosures related to long-term debt are accurate is an example of the ________ audit objective.

A) occurrence

B) completeness

C) presentation and disclosure

D) classification and understandability

C) presentation and disclosure

Residual-related inspect objectives follow from direction assertions.

True OR Faux

TRUE

Balance-related audit objectives are usually practical to the catastrophe balance in income statement accounts; transaction-related audit objectives are usually applied to transactions reflected in rest sheet accounts.

True OR FALSE

Imitation

Tests of details of balances typically involve the use of comparisons and relationships to assess the overall reasonableness of account balances.

TRUE OR FALSE

Fake

The full general balance-related audit objective that deals with determining that details in the business relationship balance agree with related principal file amounts, foot to the full in the account balance, and agree with the total in the general ledger is the detail necktie-in objective.

True OR Faux

Truthful

The cutoff objective, "transactions well-nigh the residue canvas date are recorded in the proper period," is a rest-related inspect objective.

True OR FALSE

Truthful

The presentation and disclosure-related inspect objectives are identical to the management assertions for presentation and disclosure.

Truthful OR FALSE

True

The procedures used to test the effectiveness of the internal controls are known equally

A) tests of transactions.

B) tests of controls.

C) substantive analytical procedures.

D) control risk.

B) tests of controls.

Which of the post-obit statements is notcorrect?

A) At that place are many ways an auditor can accumulate evidence to run into overall audit objectives.

B) Sufficient appropriate evidence must be accumulated to meet the auditor'due south professional responsibility.

C) It is advisable to minimize the cost of accumulating evidence.

D) Gathering evidence and minimizing costs are equally important considerations that affect the arroyo the accountant selects.

D) Gathering evidence and minimizing costs are as important considerations that touch the approach the auditor selects.

2 overriding considerations bear upon the many ways an auditor can accrue testify:

1.   Sufficient advisable show must be accumulated to run into the auditor's professional responsibleness.

2.   Cost of accumulating evidence should be minimized.

In evaluating these considerations

A) the first is more than important than the second.

B) the second is more important than the kickoff.

C) they are equally important.

D) it is impossible to prioritize them.

A) the first is more of import than the 2nd.

If the auditor has obtained a reasonable level of balls about the fair presentation of the financial statements through understanding internal control, assessing command risk, testing controls, and analytical procedures, then the auditor

A) can upshot an unqualified stance.

B) can significantly reduce other substantive tests.

C) can write the engagement letter.

D) needs to perform additional tests of controls then that the assurance level can be increased.

B) can significantly reduce other substantive tests.

Later the auditor has completed all audit procedures, it is necessary to combine the information obtained to reach an overall conclusion as to whether the fiscal statements are fairly presented. This is a highly subjective process that relies heavily on

A) generally accepted auditing standards.

B) the AICPA'due south Code of Professional Conduct.

C) generally accustomed accounting principles.

D) the auditor'south professional judgment.

D) the auditor's professional judgment.

Direct, written communication with the client's customers to place whether a receivable exists is an example of a(n)

A) noun test of transactions.

B) test of controls.

C) belittling procedure.

D) test of details of balances.

D) exam of details of balances.

________ are used as evidence to provide assurance virtually an account balance.

A) Substantive belittling procedures

B) Tests of transactions

C) Audit risks

D) Tests of details of balances

A) Substantive belittling procedures

List the four phases of a financial argument audit.

i.   plan and blueprint an audit arroyo based on risk assessment procedures

ii.   perform tests of controls and substantive tests of transactions

3.   perform noun analytical procedures and tests of details of balances

4.   consummate the audit and issue an audit study

When an auditor has reduced assessed control risk based on tests of controls, he or she may so reduce the extent to which the accuracy of the financial statement information straight related to those controls must exist supported through the accumulation of testify using noun tests.

True OR Imitation

True

For a private company audit, tests of controls are normally performed just on those internal controls the auditor believes have notbeen operating finer during the period under inspect.

TRUE OR Fake

Imitation

Rights and obligations is the but balance-related assertion without a similar transaction-related exclamation.

True OR FALSE

TRUE

The audit objectives are the well-defined methodology for organizing an audit to ensure that the evidence gathered is sufficient and appropriate.

TRUE OR FALSE

FALSE

Obtaining an understanding of the entity and its surroundings is part of the belittling procedures phase of the audit.

Truthful OR FALSE

Faux

An accountant assesses the gamble of fabric misstatement to determine the impact on the audit plan and to decide the nature, extent, and timing of the audit procedures.

TRUE OR Simulated

TRUE

Which Of The Following Statements Is True Of Services Provided By Brokers?,

Source: https://www.brainscape.com/flashcards/chapter-6-audit-responsibilities-and-obj-7018100/packs/11097322

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