审计课后选择题.pdf

CHAPTER 1 THE DEMAND FOR AUDIT AND OTHER ASSURANCE SERVICESCHAPTER 1 THE DEMAND FOR AUDIT AND OTHER ASSURANCE SERVICES 1-1Which of the following best describes why an independent auditor is asked to express an opinion on the fair presentation of financial statements? The opinion of an independent party is needed because a company may not be objective with respect to its own financial statements. 1-2Independent auditing can best be described as? a discipline that attests to the results of accounting and other functional operations and data. 1-3Which of the following professional services would be considered an attestation engagement? An engagement to report on statutory requirements. 1-4In performing an attestation engagement,a CPA typically? expresses a conclusion about an assertion. 1-5Operationalauditsgenerallyhavebeenconductedbyinternalauditorsand governmental audit agencies but may be performed by certified public accountants.A primary purpose of an operational audit is to provide? a measure of management performance in meeting organizational goals. 1-6In comparison to the external auditor,an internal auditor is more likely to be concerned with? operational auditing. 1-7Which of the following best describes the operational audit? It concentrates on seeking aspects of operations in which waste could be reduced by the introduction of controls. 1-8Compliance auditing often extends beyond audits leading to the expression of opinion onthefairnessoffinancialpresentationandincludesauditsof efficiency,economy,effectiveness,as well as? adherence to specific rules or procedures. CHAPER 2 THE CPA PREFESSIONCHAPER 2 THE CPA PREFESSION 2-1The first general standard,which states in part that the audit is to be performed by a person or persons having adequate technical training,requires that an auditor have? education and experience in the field of auditing. 2-2Which of the following best describes what is meant by generally accepted auditing standards? Acts to be performed by the auditors. 2-3Thegeneralgroupofthegenerallyacceptedauditingstandardsincludesa requirement that? due professional care be exercised by the auditor. 2-4What is the general character of the three generally accepted auditing standards classified as standards of field work? The criteria of audit planning and evidence gathering. 2-5A CPA firm is reasonably assured of meeting its responsibility to provide services that conform with professional standards by? having an appropriate system of quality control. 2-6Which of the following are elements of a CPA firms quality control that should be considered in establishing its quality control policies and procedures? Personnel Management.(Yes)/Monitoring.(Yes)/Engagement Performance.(Yes) 2-7Which of the following is an element of a CPA firms quality control that should be considered in establishing its quality control policies and procedures? Management Personnel . CHAPTER 3 AUDIT REPORTSCHAPTER 3 AUDIT REPORTS 3-1An auditors unqualified report? explicitly states that all material items have been disclosed in conformity with accounting principles generally accepted in the United Stated of America. 3-2The date of the CPAs opinion on the financial statements of the client should be the date of the? completion of all important audit procedures. 3-3If a principal auditor decides to refer in his or her report to the audit of another,he or she is required to disclose the? portion of the financial statements audited by the other auditor. 3-4An entity changed from the straight-line method to the declining-balance method of depreciation for all newly acquired assets.This change has no material effect on the current years financial statements but is reasonably certain to have a substantial effect in later years.If the change is disclosed in the notes to the financial statements,the auditor issue a report with a? qualified opinion with explanatory paragraph regarding consistency. 3-5A CPA will issue an adverse auditors opinion if? the exception to the fairness of presentation is so material that an “expect for”opinion is not justified. 3-6An auditor would most likely disclaim an opinion because of? a client-imposed scope limitation. 3-7Under which of the following sets of circumstances should an auditor issue a qualified opinion? The financial statements contain a departure from generally accepted accounting principles,the effect of which is material. CHAPTER 4 PROFESSIONAL ETHICSCHAPTER 4 PROFESSIONAL ETHICS 4-1What is the meaning of the generally accepted auditing standard that the Code of Professional Conduct or GAAS.Choose the best response. The auditor must be without bias with respect to the client under audit. 4-2The independent audit is important to readers of financial statements because it? involvestheobjectiveexaminationofandreportingonmanagement-prepared statements. 4-3An auditor strives to achieve independence in appearance to? maintain public confidence in the profession. 4-4In which one of the following situations would a CPA be in violation of the AICPA Code of Professional Conduct in determining the audit fee? A fee based on whether the CPAs report on the clients financial statements results in the approval of a bank loan. 4-5The AICPA Code of Professional Conduct that a CPA shall not disclose any confidential information obtained in the course of a professional engagement except with the consent of the client.In which one of the following situations would disclosure by a CPA be in violation of the code? Disclosing confidential information to another accountant interested in purchasing the CPAs practice. 4-6A CPAs retention of client records as a means of enforcing payment of an overdue audit fee is an action that is? prohibited under the AICPA rules of conduct. CHAPTER 6 AUDIT RESPONSIBILITIES AND OBJECTIVESCHAPTER 6 AUDIT RESPONSIBILITIES AND OBJECTIVES 6-1Which of the following best describes the reason why an independent auditor report on financial statements? Different interests may exist between the company preparing the statements and the persons using the statements. 6-2An independent audit aids in the communication of economic data because the audit? lends credibility to the financial statements. 6-3The major reason an independent auditor gathers audit evidence is to? form an opinion on the financial statements. 6-4An independent auditor has the responsibility to design the audit to provide reasonable assuranceofdetectingerrorsandfraudthatmighthaveamaterialeffecton financialstatements.Which of the following,if material,would be a fraud as defined in Codification of Statements on Auditing Standards? Misappropriation of an asset or groups of assets. 6-5What assurance does the auditor provide that errors,fraud,and direct-effect illegal acts that are material to the financial statements will be detected? Errors.(Reasonable)/Fraud.(Reasonable)/Direct-Effect Illegal Acts.(Reasonable) 6-6An auditor most likely would analyze inventory turnover rates to obtain evidence concerning managements assertions about? valuation or allocation. 6-7The audit clients board of directors and audit committee refused to take any action with respect to an immaterial illegal act that was brought to their attention by the auditor.Because of their failure to act,the auditor withdrew from the engagement.The auditors decision to withdraw was primarily because of doubts concerning? reliance on managements representations. 6-8The primary responsibility for the adequacy of disclosure in the financial statements and footnotes rests with the? client. CHAPTER 7 AUDIT EVIDENCECHAPTER 7 AUDIT EVIDENCE 7-1Which of the following types of documentary evidence should the auditor consider to be the most reliable? A check,issued by the company and bearing the payees endorsement,that is included with the bank statements mailed directly to the auditor. 7-2The most reliable type of audit evidence that an auditor can obtain is? physical examination by the auditor. 7-3Auditevidencecancomeindifferentformswithdifferentdegreesof persuasiveness.Which of the following is the least persuasive type of evidence? Prenumbered sales invoices. 7-4Which of the following is the least persuasive documentation in support of an auditors opinion? Schedules of details of physical inventory counts conducted by the clients. 7-5Which of the following is not a primary purpose of audit documentation? To support the financial statements. 7-6During an audit engagement,pertinent data are compiled and included in the audit files.The audit files primarily are considered to be? support for the auditors representations as to compliance with generally accepted auditing standards. 7-7Although the quantity,type,and content of audit documentation will vary with the circumstances,audit documentation generally would include the? auditing procedures followed and the testing performed in obtaining evidential matter. CHAPTER 8 AUDIT PLANNING AND ANALYTICAL PROCEDURESCHAPTER 8 AUDIT PLANNING AND ANALYTICAL PROCEDURES 8-1Which of the following is an effective audit planning procedure that helps prevent misunderstandings and inefficient use of audit personnel? Arrangeapreliminaryconferencewiththeclienttodiscussaudit objectives,fees,timing,and other information. 8-2An auditor is planning an audit engagement for a new client in a business with which he is unfamiliar.Which of the following would be the most useful source of information during the preliminary planning stage,when the auditor is trying to obtain a general understanding of audit problems that might be encountered? Prior-year audit files of the predecessor auditor. 8-3An auditor obtains knowledge about a new clients business and industry to? understand the events and transactions that may have an effect on the clients financial statements. 8-4In assessing whether to accept a client for an audit engagement,a CPA should consider? Client Business Risk.(Yes)/Acceptable Audit Risk.(Yes). 8-5When approached to perform an audit for the first time,the CPA should make inquires of the predecessor auditor.This is a necessary procedure because the predecessor may be able to provide the successor with information that will assist the successor in determining whether? the engagement should be accepted. 8-6What is the responsibility of successor auditor with respect to communicating with the predecessor auditor in connection with a prospective new audit client? The successor auditor should obtain permission from the prospective client to contact the predecessor auditor. 8-7Analytical procedures used in planning an audit should focus on identifying? areas that may represent specific risks relevant to the audit. 8-8For all audits of financial statements made in accordance with generally accepted auditing standards,the use of analytical procedures is required to some extent? In the Planning Stage(Yes)/As a Substantive Test(No)/In the Completion Stage(Yes). 8-9Which of the following would be least likely to be comparable between similar corporations in the same industry line of business? Earnings per share. 8-10Which of the following situations has the best chance of being detected whena CPA compares 2004 revenues and expenses with the prior year and investigates all changes exceeding a fixed percentage? An increase in property tax rates has not been recognized in the companys 2004 accrual. CHAPTER 9 MATERIALITY AND RISKCHAPTER 9 MATERIALITY AND RISK 9-1Which one of the following statements is correct concerning the concept of materiality? Materiality is a matter of professional judgment. 9-2The concept of materiality will be least important to the CPA in the determining the? effects of the CPAs direct financial interest in a client upon the CPAs independence. 9-3Edison Corporation has a few large accounts receivable that total $1400000.Victor Corporationhasagreatnumberofsmallaccountsreceivablethatalsototal $1400000.The importance of a misstatement in any one account is therefore greater for Edison than for Victor.This is example of the auditors concept of? materiality. 9-4 Which of the following are elements ultimately determines the specific auditing procedures that are necessary in the circumstances to afford a reasonable basis for an opinion? Inherent risk. 9-5Which of the following best describes the element of inherent risk that underlies the application of generally accepted auditing standards,specifically the standards of field work and reporting? Inventories may require more attention by the auditor on an engagement for a merchandising enterprise than on an engagement for a public utility. 9-6Which one of the following statements is not correct about materiality? An auditor considers materiality for planning purposes in terms of largest aggregate level of misstatements that could be material to any one of the financial statements. 9-7Inherent risk and control risk differ from planned detection risk in that they? exist independently of the financial statement audit. 9-8In considering materiality for planning purposes,an auditor believes that misstatements aggregating $10000 would have a material effect on an entitys income statement,but that misstatements would have to aggregate $20000 to materiality affect the balance sheet.Ordinarily,it would be appropriate to design auditing procedures that would be expected to detect misstatements that aggregate? $10000. CHAPTER 10 INTERNAL CONTROL AND CONTROL RISKCHAPTER 10 INTERNAL CONTROL AND CONTROL RISK 10-1When considering internal control,an auditor must be aware of the concept of reasonable assurance which recognizes that the? cost of internal control should not exceed the benefits expected to be derived therefrom. 10-2When an auditor issues an unqualified opinion on the financial statement,it is implied that the? likelihood of fraud is minimal. 10-3Which of the following statements about the auditors responsibility for internal control is correct? Even when controls are adequately designed and placed in operation,the auditor can assess control at maximum and not perform tests of controls when substantive tests are less costly to perform. 10-4What is the independent auditors principal purpose for obtain evidence in every audit that internal control and assessing control risk in a financial statement audit? To determine the nature,timing,and extent of subsequent audit work. 10-5In general,a significant internal control weakness may be defined as a condition under which material misstatements would ordinarily not be detected within a timely period by? employees in the normal course of performing their assigned functions. 10-6Which of the following statements with respect to required auditor communication of significant deficiencies is correct? Such communication must include a description of all weakness. 10-7The auditor who becomes aware of a significant deficiency in internal control is required to communicate this to the? audit committee. 10-8The ultimate purpose of assessing control risk is to contribute to the auditors evaluation of the? risk that material misstatements exist in the financial statement. 10-9An auditor uses assessed control risk to? determine the materiality thresholds for planning and evaluation purposes are sufficiently high. 10-10On the basis of audit evidence gathered and evaluated,an auditor decides to increase assessed control risk from that originally planned.To achieve an audit risk level(AcAR)that is substantially the same as the planned audit risk level(AAR),the auditor would? decrease planned detection risk. 10-11Which of the following statements about tests of controls is correct?Tests of controls? provide persuasive evidence that a material misstatement exists when the auditor determines that the control is not being consistently applied. CHAPTER 12 THE IMPACT OF INFORMATION TECHNOLOGYCHAPTER 12 THE IMPACT OF INFORMATION TECHNOLOGY 12-1An IT system is designed to ensure that management possesses the information it needs to carry out its function through the integrated actions of? data gathering,analysis,and reporting functions. 12-2Which of the following conditions would not normally cause the auditor to question whether material misstatements exist? Bookkeeping errors are lists on an IT-generated error listing. 12-3As the strength of general IT controls weakens,the auditor is most likely to? expand testing of application controls used to reduce control risk to cover greater portions of the fiscal year under audit. 12-4Which of the following is an example of an application control? The sales system automatically computes the total sale amount and posts the total to the sales journal master file. 12-5Which of the following client IT systems generally can be audited without examining or directly testing the computer programs of the system? A system that performs relatively uncomplicated processes and produces detailed output. 12-6Which of the following is true of generalized audit software programs? They each have their own characteristics that the auditor must carefully consider before using in a given audit situation. 12-7Assume that an auditor estimates that 10000 checks were issued during the accounting period.If an IT application control that performs a limit check for each check request is to be subjected to the auditors test data approach,the sample should include? a number of test items determined by the auditor to be sufficient under the circumstances. 12-8An auditor will use the test data approach to gain certain assurances with respect to the? procedures contained within the program. CHAPTER 13 OVERALL AUDIT PLAN AND AUDIT PROGRAMCHAPTER 13 OVERALL AUDIT PLAN AND AUDIT PROGRAM 13-1The auditor looks for an indication duplicate sales invoices to see whether the involves have been verified.This is an example of? a test of control. 13-2Analytical procedures may be classified as being primarily? substantive tests. 13-3To support the auditors initial assessment