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Question(s) / Instruction(s):

ACC3118

1) There are five steps to developing audit objectives, so which is the last?

A) Know management assertions about accounts

B) Know specific audit objectives for classes of transactions and accounts

C) Divide the financial statements into cycles

D) Know general audit objectives for classes of transactions and accounts

 

2) The completeness assertion addresses:

A) Matters that are the opposite of those addressed by the occurrence assertion.

B) Whether all transactions that should be included in the financial statements are in fact included.

C) The possibility of omitting transactions that should have been recorded.

D) All of the above.

 

3) Which of the following statements is true?

A) The circumstances may vary from audit to audit, but the evidence accumulated remains the same.

B) The evidence which the auditor accumulates remains the same from audit to audit, but the

General audit objectives vary, depending on the circumstances.

C) The general audit objectives remain the same from audit to audit, but the evidence varies,

Depending on the circumstances

D) The general audit objectives may vary from audit to audit, but the circumstances remain the same.

 

4) There are several reasons why the auditor is responsible for reasonable but not absolute assurance.

One of them is:

A) Audit testing and the evaluation of test results require significant auditor judgment and

Auditors can make and errors in judgment.

B) Fraudulently prepared financial statements are often extremely difficult, but not impossible,

For the auditor to detect

C) Accounting presentations contain complex estimates that can be convincing.

D) Most audit evidence results from testing a sample of a population and sampling involves

Minimal risk

 

5) Which of the following is not one of the four phases in the audit process?

A) Plan and design an audit approach.

B) Inform client of any adjustments or corrections to be made to the financial statements.

C) Complete the audit and issue the report.

D) Test controls and transactions.

 

6) Management assertions are:

A) Explicitly expressed representations about the financial statements.

B) Stated in the footnotes to the financial statements.

C) Implied or expressed representations about classes of transactions and the related accounts in

The financial statements

D) Provided to the auditor in the assertions letter, but are not disclosed on the financial

Statements

 

7) Which one of the following is not an example of misclassification for sales?

A) Recording the sale of a subsidiary as a reduction in investments

B) Including cash sales as credit sales

C) Including retail sales as wholesale sales

D) Recording a sale of operating fixed assets as revenue

 

8) After the auditor has completed all the procedures, it is necessary to combine the information

Obtained to reach an overall conclusion as to whether the financial statements are fairly presented.

This is a highly subjective process that relies heavily on:

A) The joint Code of Professional Conduct.

B) Generally accepted accounting principles.

C) The auditor’s professional judgment.

D) Generally accepted auditing standards.

 

9) When the auditor believes an illegal act may have occurred, it is necessary to:

A) Inquire of management, at a level above those likely to be involved with illegality.

B) Consider accumulating additional evidence to determine if there is actually an illegal act.

C) Consult with the client’s legal counsel.

D) Do all three of the above.

 

10) Misstatements are usually considered material if:

A) The auditor has quantified a measure of materiality.

B) The combined uncorrected errors and fraud in the financial statements are likely to have

Changed or influenced the decisions of a reasonable person using the financial statements.

C) The combined uncorrected errors in the financial statements are likely to have changed or

Influenced the decisions of a reasonable person using the financial statements

D) None of the above.

 

 

 

 

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