key largo bank would most likely sue humphrey claiming. 9/16/2016 Test:Chapter14AuditCompletion| Quizlet NAME 8 Multiple choice questions 1. An auditor would issue an adverse opinion if; C. Members of the Board of Directors. B) Auditors rarely gather audit … An auditor need not abide by a particular auditing standard if the auditor … Under which circumstances will the auditor ordinarily assess control risk as high? Copy and Edit View full resource. Which of these would not be considered to be a test of details of balances? Restricting the use of the information system to particular authorised personnel by use of passwords is an example of: Which of the following identifies the five components of internal control? Register for free tools and resources Build free Mind Maps, Flashcards, Quizzes and Notes Create, discover and share resources Print & … What is the best way for an auditor to obtain evidence about the controls in relation to 'segregation of duties'? Cram.com makes it easy to get the grade you want! Audit documentation; 1. Provides reasonable assurance that a firm is … An audit compliance test looks at whether your employees comply with the procedures for preventing fraud, embezzlement and theft. four months later, lauren files for bankruptcy. A) Auditors typically gather audit evidence about one whole financial statement at a time rather than one account at a time. Study Flashcards On Audit Test Test #3 Ch. Some special considerations in developing audit programs for initial engagements are: A substantive procedure to obtain evidence as to the presentation and disclosure assertions of inventories in the financial report is: Which of these is most likely to be based on an 'accounting estimate'? Which of the following controls is not usually performed in the vouchers payable department? Which of the following have an inverse relationship? The only risk that can be manipulated by the auditor is: The auditor assesses control risk because it: In regard to analytical procedures the correct statements is: An example of 'tracing' a transaction is: An example of 'vouching' a transaction is: An example of a test of details of balances is: A substantive procedure commonly performed prior to the client's balance sheet date is: When using analytical procedures to test accounts receivable, which of these substantive procedures would not be able to be used: The audit procedure that is designed to obtain reasonable assurance that expenses and accruals transactions are recorded in the correct accounting period is: Which of the following substantive audit procedures is to obtain evidence as to the completeness assertion of inventories in the financial report? Print test 102 Multiple choice questions. If the auditor finds they're in compliance with the rules, that's great. various situations create threats to auditor independence. The audit program is basically a list of: Extensive tests of details for an income statement account are least likely to be required when: What financial statement assertion is most often tested by CAATs? Which risk is controllable by the auditor? a. auditors must exercise the level of care, skill, and judgement expected of a reasonably prudent auditor under the circumstances. 25. Start studying Audit Test 2: Multiple Choice. under the AICPA's conceptual framework for independence, the member-client relationship is evaluated to determine whether independence in fact and appearance is jeopardized. Key Largo Bank would most likely sue Humphrey claiming, lauren hires humphrey, a cpa, to audit her financial statements. acquisition and expenditure activities include 1. purchasing goods and services, 2. receiving the goods or services, 3. recording the asset or expense and related liability, and 4. depreciating assets purchased. A. C) substantive tests of details of transactions while also testing for compliance with controls. Sammy's management tells Kerry that if the misstatement is corrected or if Kerry issues an opinion that indicates there is a material misstatement, Sammy Corp. will likely have to declare bankruptcy and thousands of employees will lose their jobs. B) tests of controls that are relevant to multiple assertions. Which of these does not constitute sampling? The auditor's acceptable risk of incorrect acceptance (ARIA) for the test of details of balances for accounts payable will most likely be Which of these assertions is an assertion only about classes of transactions and events and related disclosures? b. a CPA in public practice providing auditing and other attestation services. In regard to these items, professional standards require the auditor to: In making judgements about materiality at the account balance level, the auditor must consider the relationship between it and materiality at financial report level as a whole. Chapter 5 audit review test for ACCT441. c. make and enforce all the rules of conduct for CPA's who are AICPA members. Ja Nee 2. Which of the following best describes business risk? Instead, audit testing aims to examine a testing process already in place for coverage and accuracy of … ellie is the engagement partner on the audit with an office in buffalo grove. Which of the following statements is correct? Administra-tive reporting typically includes audit budgets among other things. The engagement letter includes a statement acknowledging that audited financial statements are required to be filed with a regulatory body by October 1. Chapter 1: http:/quizlet.com/36008148/audit-exam-practice-flash-cards/ Chapter 2: Testing inventory pricing does not include which of these tests? purchases are requisitioned by a purchasing department that seeks the best prices and quality, the accounts payable department reconciles the vendor invoice, purchase order, and receiving report prior to approving the payment to the vendor, bill of landings for goods shipped from a vendor to the purchasing company should always include the company's purchase order number, the receiving department receives a 'blind" copy of the purchase order which does not include the vendor's name and address, the auditor's "search for unrecorded liabilities" should emphasize payments made shortly after the end of the year, auditors should inspect the "unmatched receiving report" file to determine whether the liability for the receipt of goods has been recorded, proper separation of duties involves the purchasing department as the record keeping function, if internal controls over the expenditure cycle are weak, auditors will need to design substantive procedures to try to detect whether control failures have produced misleading financial statement account balances, if the risk of material misstatement is assessed as high, it is likely that additional substantive procedures will be required, the emphasis is on the completeness assertion because financial statement users tend to be more concerned about understated expenses and liabilities than overstated, unrecorded liabilities can be prevented if there is an appropriate segregation of duties in accounts payable, AICPA's conceptual framework for independence. Which of the following is correct relating to risk? Reliability of evidence is influenced by: Appropriateness refers to the quality of audit evidence. b. the auditor's checking account, which is fully insured by a federal agency, is held at a client financial institution. The auditor plans to use audit sampling to perform tests of details of balances for accounts payable. Those tests indicate that the related controls are operating effectively. Quickly memorize the terms, phrases and much more. Lauren would most likely sue Humphrey claiming, failure to provide any level care in fulfilling a duty owed to another party, including reckless disregard for the truth, is called, to prevail in an action brought under common law, the plaintiff must show all of the following except, c. auditors knew the financial statements contained a material misstatement, Lauren hires Humphrey, a CPA, to provide an audit of her financial statements. If the sample supports the conclusion that the recorded account balance is materially misstated when in fact it is, this is: What would most effectively describe the risk of incorrect rejection in terms of substantive audit testing? Why are related party transactions a risk area for auditors? Dual-purpose tests are audit tests designed as: A) tests of more than one control with a single procedure. Karr's field work was completed on Feb. 27 2010, Karrs auditor's report was dated Feb. 28 2010 and was received by the management of Lurch on March 5, 2010. Start studying Audit Test 3. Dual-purpose tests are audit tests designed as: In planning the audit, the auditor should assess materiality at two levels: Professional standards recognise that a misstatement that is quantitatively immaterial may be qualitatively material. What is the purpose of the preliminary assessment of control risk? which of the following is required for a cpa firm to designate itself as "members of the american institute of certified public accountants" on its letterhead? b. ethics are a function or moral rules and principles. An auditor would make an initial assessment of control risk at the maximum when: A predominantly substantive approach to audit strategy is based on the assumption that: A decision the auditor needs to consider is whether the actual assessed level of control risk supports the planned level of substantive tests. Which of these is not one of the steps in the process of understanding the entity's internal control environment and assessing the internal control risk? in april 2006, the PEEC adopted the conceptual framework for AICPA independence standards, which describes the PEEC's risk-based approach to analyzing independence issues that arise: familiarity threat- cpa's having a close or longstanding relationship with a client, must be 1. realized or realizable and 2. earned, assertions-- three are the correct answers, Regulates daily trading of securities and requires periodic financial statements and information to be filed with the SEC, agency that has the ultimate authority over us, uses legal precedent to identify responsibility. Karr has audited the F/S of Lurch corporation for the year ended Dec. 31, 2009. The audit procedures for the subsequent events review can be divided into two categories: (1) procedures normally integrated as a part of the verification of year-end account balances, and (2) those performed specifically for the purpose of discovering subsequent events. The testing of operating effectiveness focuses on: When control procedures are not followed, they are referred to as: Which of these is not normally a way in which an auditor may choose to perform a test of controls? Humphrey completes the audit and issues an unqualified opinion. Which sampling technique could be said to have a similar effect to stratification? The most appropriate audit strategy is: Which of these would not be considered corroborating information? View Test Prep - Test_ Chapter 14- Audit Completion _ Quizlet from GERMAN 101 at Trident Technical College. dara & co. audit hill corporation. A high risk of misstatement is associated with inventory due to the: The auditor would need to be alert for transactions that have occurred with related parties, because: If the predominantly substantive approach preliminary audit strategy is used, planned detection risk will be: If the acceptable level of detection risk decreases, the assurance directly provided from: Which of these is not considered a substantive procedure? according to the standards of the profession, which of the following activities may be required in exercising due professional care? Print test 107 Multiple choice questions. Internal Auditing Chapter Exam Instructions. Mays sued Hart under the provisions of the 1933 Act that deal with omission of facts required to be in the registration statement. humphrey completes the audit and issues an unqualified opinion. Start studying Audit Test #3. Which of the following does not constitute sampling? Print test 69 Multiple choice questions. 9 Test Bank at Cram.com. The timing of tests of controls should be: In considering the internal auditors' organisational status, the auditor would need to take into account which of the following factors? a CPA who is not in public practice is obligated to follow which of the following rules of conduct? based on the audited financial statements, key largo bank approves the loan to lauren. Over Quizlet. If an auditor has performed tests of controls part-way through a company's reporting period at an interim visit, what further procedures are required at the final audit stage? a. failing to disclose material facts when the employer's external accountant has requested written representations. according to the profession's ethical standards, which of the following events may justify a departure from an established accounting principle? after the acquisition, the fraud was discovered and elliot corp. suffered substantial losses. c. any surviving partner(s) on the death of a partner. which of the following is not included in rule of conduct 102, integrity and objectivity? Are optional guidelines which an auditor may choose to follow or not follow when conducting an audit. Learn vocabulary, terms, and more with flashcards, games, and other study tools. d. julie, a partner in dara & company, with an office in elmhurst. Testing the work of the internal auditors is least likely when the external auditor has decided that: In a computer information system, control procedures that provide reasonable assurance that the recording, processing and reporting of data are properly performed for specific applications are known as: Which of the following statements is most accurate concerning audit testing? The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the finanical statements under audit. Tracing tests the assertion about; 6. Our online auditing trivia quizzes can be adapted to suit your requirements for taking some of the top auditing quizzes. Incorrect. which of the following is not a key element of the definition of ethics? 0 Sign In Sign Up for Free Sign Up; Next up. These tests are not investigating the receivables balance in the SOFP. … a. D) occurrence. Another audit test focuses on internal controls, which are the procedures a company uses to protect its information from fraud and abuse. The most difficult assertion for the auditors to verify is: Which of the following are categories of business risks? Tests of the specific items making up the balance in a given general ledger account. Explanation on Audit Test of Controls: Here is the explanation of how the test of controls are performed, Most of the audit of financial statements is to follow the international standard on auditing.This standard, at the planning stage, required the auditor to perform a risk assessment and understanding the client’s nature of business and internal control. The factory manager informed the auditor that this was because the machines were being serviced; however, the auditor saw no evidence of this. c.Kerry is likely liable to any person who suffered a loss as a result of the fraud. Quickly memorize the terms, phrases and much more. Audit testing does not exhaustively test a product to uncover every potential issue and defect and so does not incur the cost in time and personnel that such a test would suggest. Stratification is a way of improving audit efficiency in sampling. if elliot sues adam & co., elliot must prove that adam & co. c. failed to exercise the appropriate level of professional care. Which of the following audit tests would be regarded as a test of a control? What would be an appropriate sample of invoices to gain reasonable assurance that all payments are properly authorised as part of the annual audit? Which is the best of the following options to stop unauthorised users gaining access to computer systems? Start studying Audit Test 4. Tests of … View Test Prep - TEST BANK from ACTG 492 at Portland State University. Preliminary work on a time budget for an audit often is involved with: Before using an expert in another profession or occupation, the auditor should be satisfied as to all of the following, except: The decision to accept an audit engagement requires the auditor to undertake a client evaluation. A comprehensive database of more than 37 audit quizzes online, test your knowledge with audit quiz questions. Two special classes of documentary evidence are: Which of the following examples constitute the most reliable piece of evidence available to an auditor? based on the audited financial statements, key largo bank approves a loan to lauren. the engagement letter includes a statement acknowledging that audited financial statements will be provided to key largo bank for a loan. An advantage of using statistical sampling techniques is that such techniques: The critical difference between statistical and non-statistical sampling is the: If all other factors remained constant, changing the tolerable deviation rate from 10% to 8% would mean: Which of the following statements in relation to systematic selection are correct? 12/11/2020 Test: CPA - AUD - Hotspot | Quizlet 1/5 5 Written questions 1. For which of the following would 'existence' tend not to be appropriate for? Matching the vendor's invoice with the related receiving report. Which of the following are substantive procedures? c. an investment held through a regulated mutual fund, a violation of the profession's ethical standards most likely would have occurred when a cpa, a. expressed an unmodified opinion on the current year's financial statements when fees for the prior year's audit were unpaid. A comprehensive database of more than 19 auditing quizzes online, test your knowledge with auditing quiz questions. The procedures the auditor does to obtain an understanding of the entity, includes: The auditor has a statutory legal obligation to report on: When an accounting information system is able to identify and record only the valid transactions of the entity that occurred in the current period, the appropriate assertion(s) would be: Data and procedural controls are a type of: Which of the following can best depict the processing of individual classes of transactions, such as sales, cash receipts, purchases, and cash payments? during the audit, adam & co. failed to discover a fraud that resulted in material misstatements in roger's financial statements. The Audit committee consists of: 6. The predecessor auditor firm should tell the successor auditor firm: In the investigation of a potential new client, if the client refuses to give permission to inquire of the existing auditor, or if the existing auditor does not respond fully, the prospective auditor should: The exercise of 'due professional care' requires an auditor to: Engagement letters are widely used in practice for professional engagements of all types. The auditor may assess the control risk as high when: A predominantly substantive audit strategy will: When assessing specific audit objectives for cash at bank, the objective of ensuring that all cash receipts and payments journals are mathematically correct and have been properly posted to the general ledger would mostly serve which assertion? D. What would most effectively describe the risk of incorrect acceptance in terms of substantive audit testing? INCORRECT No answer given THE ANSWER Third Standard of Fieldwork 2. A high risk condition for the fraud risk factor 'opportunity' would be: Which of the following relates to fraudulent financial reporting? We ensure that the audit testing procedures comply with the guidance laid out by the AICPA, which means the tests confirm design and operating effectiveness. Which of the following statements is true if the misstatement is not corrected and Kerry issues an unqualified opinion on Sammy's financial statements? Study Flashcards On Audit Final Exam at Cram.com. 68. audit risk assessment and related audit plan. View Notes - Auditing Chapter 12 Quiz, Chapter 13 Quiz, and Test #2 from AUDITING 4505 at University of Minnesota, Duluth. Mays bought McCovey Corp. common stock in an offering registered under the Securities Act of 1933. Mays must prove that: B. the financial statements contained a material misstatement, Lauren hires Humphrey, a CPA, to audit her financial statements. Een audit is een systematische en periodieke controle van een organisatie of bedrijf, en dan vooral van de boekhouding en jaarrekeningen. humphrey completes the audit and issues an unqualified opinion. which type of threat most likely results from an auditor's financial interest in a client? 1. which of the following acts by a CPA who is in business most likely is a violation of the ethical standards of the profession? When the auditor traces a sales invoice to the accounts receivable ledger, the type of audit evidence being obtained is: When the auditor compares the client's profit performance with other firms within the same industry the auditor is performing: Which audit procedure is most associated with completeness? The auditor would not consider which of the following in considering the effectiveness of the internal auditors? What should the auditor do next? which of the following defines the imperative principle of ethics? Client evaluations involve: Dealings between a predecessor and proposed auditor normally includes: An auditor has been offered a new audit. An audit is carried out in firms to affirm that their books of accounts reflect a true and fair view of the position of the company and note incidences where fraud has taken place. Quickly memorize the terms, phrases and much more. Which of these is not compatible with a high level of inherent and control risk? Ben je bang voor vuur? This meant that production was 25% lower than normal. A statistical sampling plan to estimate the proportion of a characteristic in a population is: What audit test do you think would be most appropriate for dollar unit sampling (PPS sampling)? Inquiries of warehouse personnel concerning possible obsolete or slow-moving inventories provide assurance about management's assertion of: To verify management's assertion of existence, an auditor would most likely: What is not necessarily required as part of the audit process? 75.000+ Leden; 400.000+ Quizzen; 100.000+ Verhalen; Gratis Aanmelden. They are therefore tests of control. Evidence is reliable if it Why is it important to obtain an understanding of the internal control system? a CPA is permitted to disclose confidential client information without the consent of the client to. Which of the following is true regarding audit evidence? B. which of the following statements is true concerning auditors responsibilities during the audit? this is considered... the concept of materiality is least important to an auditor when considering the, c. effects of a direct financial interest in the client on the CPA's independence. Which of the following would not be a possible opinion that the auditor could issue? The engagement letter includes a statement acknowledging that audited financial statements will be provided to financial institutions for a loan, but does not name any financial institutions. In evaluating the sample results, the planned control risk will be supported when the projected deviation rate is. 12. For evidence to be appropriate, it must be: Documentary evidence is used extensively in auditing. Administrative reporting is the reporting rela-tionship within the organization’s management structure that facilitates the day-to-day opera-tions of the internal audit activity. Humphrey does not complete the audit until October 5. C. Tests of the signatures on canceled checks to board of director's authorizations. Tests of controls that are relevant to multiple assertions in exercising due professional care and other study tools in client. 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With flashcards, games, and judgement expected of a reasonably prudent auditor under the circumstances need better policies... Control system production was 25 % lower than normal the most appropriate strategy... If the misstatement is not one of the top audit quizzes the consent of the following would not considered. Incorrect No answer given the answer Third Standard of Fieldwork 2 principles in ethics places emphasis on the audited statements... The purchase elliot hired adam & co. c. failed to discover a that! The best way for an auditor has been offered a new audit 5 Written questions 1 relating to?...