Audit MCQ Practice - 6

  • 格式:doc
  • 大小:92.00 KB
  • 文档页数:6

Practice Exam #2 Name: 1. The purpose of the requirement in SAS No. 84 of having communication between the predecessor and successor auditor is to: a. allow the predecessor to disclose information which would otherwise be confidential. b. help the successor auditor to evaluate whether to accept the engagement. c. help the client by facilitating the change of auditors. d. ensure the predecessor collects all unpaid fees prior to a change in auditor.

2. Which of the following is correct with respect to the use of analytical procedures? a. Analytical procedures may be used in evaluating balances in the testing phase as long as the auditor also uses them in assessing the going concern assumption. b. Analytical procedures must be used throughout the audit. c. Analytical procedures used in the testing phase of the audit are primarily used to direct an auditor’s attention so that the auditor’s understanding of the business is improved. d. None of the above is correct.

3. Which of the following is correct with respect to the use of analytical procedures? a. Analytical procedures may be used in evaluating balances in the testing phase as long as the auditor also uses them in assessing the going concern assumption. b. Analytical procedures must be used throughout the audit. c. Analytical procedures used in the testing phase of the audit are primarily used to direct an auditor’s attention so that the auditor’s understanding of the business is improved. d. None of the above is correct.

4. Which of the following would not likely be classified as a related-party transaction? a. An advance of one week’s salary to an employee. b. Sales of merchandise between affiliated companies. c. Loans or credit sales to the principal owner of the client company. d. Exchanges of equipment between two companies owned by the same person.

5. Which of the following would not usually be included in the minutes of the board of directors? a. The duties and powers of the corporate officers. b. Declaration of dividends. c. Authorization of long-term loans. d. All of the above would be included. 6. An auditor who accepts an audit engagement and does not possess the industry expertise of the business entity should: a. engage financial experts familiar with the nature of the business entity. b. obtain a knowledge of matters that relate to the nature of the entity’s business. c. refer a substantial portion of the audit to another CPA who will act as the principal auditor. d. first inform management that an unqualified opinion cannot be issued.

7. An engagement letter sent to an audit client usually would not include a(n): a. reference to the auditor’s responsibility for the detection of errors or irregularities. b. estimation of the time to be spent on the audit work by audit staff and management. c. statement that management advisory services would be made available upon request. d. reference to management’s responsibility for the financial statements.

8. Investigating new clients with a focus on assessing the auditor’s potential relationship with that new client is a critical element in determining: a. inherent risk. b. acceptable audit risk. c. statistical risk. d. financial risk.

9. The risk of material misstatement refers to: a. control risk and acceptable audit risk. b. inherent risk. c. the combination of inherent risk and control risk. d. none of the above.

10. Which of the following statements is not true? a. Inherent risk is inversely related to detection risk. b. Inherent risk is inversely related to evidence. c. Inherent risk is the susceptibility of the financial statements to material error, assuming no internal controls. d. Inherent risk is the auditor’s assessment of the likelihood that errors exceeding a tolerable amount exist in a segment before considering the effectiveness of internal controls.

11. Tolerable misstatement as set by the auditor: a. decreases acceptable audit risk. b. increases inherent risk and control risk. c. affects planned detection risk. d. does not affect any of the four risks.