In determining estimates of fees, an auditor may take into account each of the following, except the: a. Value of the service to the client b. Degree of responsibility assumed by undertaking the engagement. c. Skills required to perform the service. d. Attainment of specific findings

Question

In determining estimates of fees, an auditor may take into account each of the following, except the: a. Value of the service to the client b. Degree of responsibility assumed by undertaking the engagement. c. Skills required to perform the service. d. Attainment of specific findings

In determining estimates of fees, an auditor
may take into account each of the following,
except the:
a. Value of the service to the client
b. Degree of responsibility assumed by
undertaking the engagement.
c. Skills required to perform the service.
d. Attainment of specific findings

asked Nov 1, 2021 by shubhhw

1 Answer

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Which of the following procedures would an auditor be most likely to perform in planning a financial statement audit? a. Reviewing investment transactions of the audit period to determine whether related parties were created. b. Performing analytical procedures to identify areas that may represent specific risks. c. Obtaining a written representation letter from the client to emphasize management's responsibilities. d. Reading the minutes of stockholder and director meetings to discover whether any unusual transactions have occurred.

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In pursuing its quality control objectives with respect to assigning personnel to engagements, a public accounting firm may use policies and procedures such as a. Rotating employees from assignment to assignment on a random basis to aid in the staff training effort. b. Allowing staff to select the assignments of their choice to promote better client relationships. c. Assigning a number of employees to each engagement in excess of the number required so as not to overburden the staff, and interfere with the quality of the audit work performed. d. Requiring timely identification of the staffing requirements of specific engagements so that enough qualified personnel can be made available

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Safeguards that may eliminate or reduce threats to independence to an acceptable level fall in the following categories except: a. Safeguards created by the profession, legislation or regulation b. Firm-wide safeguards c. Engagement specific safeguards d. Safeguards created by the client

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A CPA is conducting the first audit of a client’s financial statements. The CPA hopes to reduce the audit work by consulting with the predecessor auditor and reviewing the predecessor's working papers. This procedure is a. Acceptable if the CPA refers in the audit report to reliance upon the predecessor auditor's work. b. Required if the CPA is to render an unqualified opinion. c. Unacceptable because the CPA should bring an independent viewpoint to a new engagement. d. Acceptable if the client and the predecessor auditor agree to it.

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Last Answer : Acceptable if the client and the predecessor auditor agree to it.

Before accepting an engagement to audit a new client, a CPA is required to obtain a. An understanding of the prospective client’s industry and business. b. The prospective client’s signature to the engagement letter. c. A preliminary understanding of the prospective client’s control environment. d. The prospective client’s consent to make inquiries of the predecessor auditor, if any.

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Before continuing the client relationship, the auditor should perform the following except: a. Communicate with the predecessor auditor. b. Evaluate client in case of change of client’s businesc. Evaluate client’s integrity. d. Evaluate financial condition of the cliens

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Which of the following is an element of "directing an audit assistant" objective? a. Identifying in advance the staffing requirements of a particular audit engagement. b. Resolving any differences in professional judgment between audit personnel. c. Resolution of differences in audit findings. d. Informing assistants of their responsibilities and the objectives of the procedures they are to perform

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Last Answer : Informing assistants of their responsibilities and the objectives of the procedures they are to perform

The primary deliverable of an engagement to perform based on procedures prescribed by the intended user of the report is/are: a. The Review Report b. Report of Factual Findings c. Management Letter d. The financial statements

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Last Answer : Report of Factual Findings

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Last Answer : Risk assessment procedures

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An engagement letter should be written before the start of an audit because a. It specifies the client's responsibility for preparing schedules and making the records available to the auditor. b. It may limit the auditor's legal liability by specifying the auditor's responsibilities. c. It specifies the basis for billing the audit for the upcoming year. d. All of the above

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Which statement is correct regarding the relationship between internal auditing and the external auditor? a. Some judgments relating to the audit of the financial statements are those of the internal auditor. b. The external audit function's objectives vary according to management's requirements. c. Certain aspects of internal auditing may be useful in determining the nature, timing and extent of external audit procedures. d. The external auditor is responsible for the audit opinion expressed, however that responsibility may be reduced by any use made of internal auditing

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Which of the following statements is true when the CPA has been engaged to do an attestation engagement? a. The CPA firm is engaged and paid by the client; therefore, the firm has primary responsibility to be an advocate for the client. b. The CPA firm is engaged and paid by the client, but the primary beneficiaries of the audit are the statement users. c. Should a situation arise where there is no convincing authoritative standard available, and there is a choice of actions which could impact client's financial statements either positively or negatively, the CPA is free to endorse the choice which is best in the client's interest. d. As long as CPA firms are competent, it is not required that they remain unbiased.

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As a resolution of the conflict in the application of fundamental principles, the auditor, after considering the ethical issues and relevant facts may do any of the following, except: a. Must immediately resign from the engagement or the employing entity. b. Should weigh me consequences of each possible course of action. c. Should consult with other appropriate persons within the firm or employing organization for help to finally resolve the matter. d. The professional accountant may wish to obtain professional advice from, the relevant professional body without breaching confidentiality if significant conflict cannot be resolved.

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When the continuing auditor intends to use information about the entity and its environment obtained in prior periods, the auditor shoulda. Assess control risk as "high" for theassertions affected by the prior-periodinformation.b. Seek permission with the client in usingthe prior period information obtained bythe auditor.c. Determine whether changes haveoccurred that may affect therelevance of such information in thecurrent audit.d. Determine whether to equitably reducethe audit fee due to lower audit effortexpended during the engagement

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Which of the following matters would an auditor least likely consider when setting the direction of the audit? a. The selection of the engagement team and the assignment of audit work to the team members. b. The engagement budget which includes consideration of the appropriate amount of time to allot for areas where there may be higher risks of material misstatement. c. The availability of client personnel and data. d. The manner in which the auditor emphasizes to engagement team members the need to maintain a questioning mind and to exercise professional skepticism in the gathering and evaluation of audit evidence.

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Last Answer : The availability of client personnel and data

An engagement to perform agreed-upon procedures may involve the auditor in performing certain procedures concerning I. Individual items of financial data. II. A single financial statement. III. A complete set of financial statements. a. I and II only b. II and III only c. I and III only d. I, II, and III

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Last Answer : I, II, and III

Which of the following is required if the professional accountant uses experts who are not professional accountants? a. The professional accountant is discouraged to engage the services of experts who are not a professional accountant. b. The ultimate responsibility for the professional service is assumed by the expert who is not a professional accountant. c. The professional accountant must take steps to see that such experts are aware of the ethical requirements of the profession. d. Experts who are not professional accountants need not be informed of ethical requirements because they are not members of the Accountancy profession

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Last Answer : The professional accountant must take steps to see that such experts are aware of the ethical requirements of the profession.

Which of the following least likely create "self-interest threat"? a. Undue dependence on total fees from an assurance client. b. Concern about the possibility of losing the engagement. c. Having a close business relationship with an assurance client. d. Pressure to reduce inappropriately the extent of work performed in order to reduce fees

Description : Which of the following least likely create "self-interest threat"? a. Undue dependence on total fees from an assurance client. b. Concern about the possibility of losing the engagement. c. Having ... client. d. Pressure to reduce inappropriately the extent of work performed in order to reduce fees

Last Answer : Pressure to reduce inappropriately the extent of work performed in order to reduce fees

Which of the following statements about fraud or error is incorrect? a. The responsibility for the prevention and detection of fraud and error rests with management. b. The auditor should plan and perform the audit with an attitude of professional skepticism, recognizing that conditions or events may be found that fraud or error may exist. c. The likelihood of detecting fraud is ordinarily higher than that of detecting error. d. The auditor is not and can not be held responsible for the prevention of fraud and error

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Last Answer : The likelihood of detecting fraud is ordinarily higher than that of detecting error.

Which of the following will an auditor least likely discuss with the former auditors of a potential client prior to acceptance? a. Disagreements with management regarding accounting principles b. Integrity of management c. Fees charged for services d. Reasons for changing audit firms

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Last Answer : Fees charged for services

Which of the following will an auditor least likely discuss with the former auditors of a potential client prior to acceptance? a. Disagreements with management regarding accounting principles b. Integrity of management c. Fees charged for services d. Reasons for changing audit firms

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Last Answer : Fees charged for services

Under the Code of Ethics, a CPA may not: a. Perform bookkeeping services for an audit client. b. Perform advisory services for an audit client. c. Have any direct financial interest in a client during the period covered by the financial statements. d. Having any joint, closely held investments with a principal stockholder of an audit client during the period of audit engagement which is not material in relation to his ne

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Last Answer : Have any direct financial interest in a client during the period covered by the financial statements.

The early appointment of the independent auditor has many advantages to the auditor and the client. Which of the following advantages is least likely to occur as a result of early appointment of the auditor? a. The auditor will be able to plan the audit work so that it may be done expeditiously. b. The auditor will be able to complete the audit work in less time. c. The auditor will be able to better plan for the observation of the physical inventories. d. The auditor will be able to perform the examination more efficiently and will be finished at an early date after the yearend

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Last Answer : The auditor will be able to complete the audit work in less time.

Contingent fees charged by CPAs engaged in tax practice are permitted under the rules of professional conduct because: a. This practice establishes fees which are commensurate with the value of the services. b. Attorneys in tax practice customarily set contingent fees. c. Determination by taxing authorities are a matter of judicial proceedings which do not involve third parties. d. The consequences are based upon findings of judicial proceedings or the findings of tax authorities

Description : Contingent fees charged by CPAs engaged in tax practice are permitted under the rules of professional conduct because: a. This practice establishes fees which are commensurate with the value of ... . The consequences are based upon findings of judicial proceedings or the findings of tax authorities

Last Answer : The consequences are based upon findings of judicial proceedings or the findings of tax authorities

Which of the following statements is correct? a. The fair presentation of audited financial statements in accordance with applicable financial reporting framework is an implicit part of the auditor’s responsibility. b. Professional judgment can be used as the justification for the decisions made by the auditor that are not otherwise supported by the facts and circumstances of the engagement or sufficient appropriate evidence. c. Appropriateness is the measure of the quality of evidence, that is, its reliability and persuasiveness. d. Most CPAs, including those who provide audit and tax services, also provide consulting services to their clients.

Description : Which of the following statements is correct? a. The fair presentation of audited financial statements in accordance with applicable financial reporting framework is an implicit part of the auditor's ... those who provide audit and tax services, also provide consulting services to their clients.

Last Answer : Most CPAs, including those who provide audit and tax services, also provide consulting services to their clients.

shubhhw · Answer 1 · 2021-11-01T09:00:22+0000

Answer :

Attainment of specific findings

answered Nov 1, 2021 by shubhhw

In determining estimates of fees, an auditor may take into account each of the following, except the: a. Value of the service to the client b. Degree of responsibility assumed by undertaking the engagement. c. Skills required to perform the service. d. Attainment of specific findings

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