Management’s attitude toward aggressive financial reporting and its emphasis onmeeting projected profit goals most likelywould significantly influence an entity’scontrol environment when a. External policies established by partiesoutside the entity affect its accountingpractices. b. Management is dominated by oneindividual who is also a shareholder. c. Internal auditors have direct access tothe board of directors and the entity’smanagement. d. The audit committee is active inoverseeing the entity’s financialreporting policies

Management’s attitude toward aggressive
financial reporting and its emphasis on
meeting projected profit goals most likely
would significantly influence an entity’s
control environment when
a. External policies established by parties
outside the entity affect its accounting
practices.
b. Management is dominated by one
individual who is also a shareholder.
c. Internal auditors have direct access to
the board of directors and the entity’s
management.
d. The audit committee is active in
overseeing the entity’s financial
reporting policies
by

1 Answer

Answer :

Management is dominated by one
individual who is also a shareholder
by

Related questions

The auditor's understanding of the entity and its environment consists an understanding of the following aspects: a. Industry, regulatory and other external factors, including the applicable financial reporting framework b. Nature of the entity, including the entity's selection and application of accounting policies c. Objectives and strategies and the related business risks that may result in a material misstatement of the financial statements d. All of these.

Description : The auditor's understanding of the entity and its environment consists an understanding of the following aspects: a. Industry, regulatory and other external factors, including the applicable financial reporting ... may result in a material misstatement of the financial statements d. All of these.

Last Answer : All of these.

The auditor's understanding of the entity and its environment consists of an understanding of the following aspects except a. Industry, regulatory, and other external factors, including the applicable financial reporting framework. b. Nature of the entity, including the entity's selection and application of accounting policies. c. Measurement and review of the entity's financial performance. d. Entity's selection and screening process of marketing and production personnel.

Description : The auditor's understanding of the entity and its environment consists of an understanding of the following aspects except a. Industry, regulatory, and other external factors, including the ... financial performance. d. Entity's selection and screening process of marketing and production personnel.

Last Answer : Entity's selection and screening process of marketing and production personnel.

Which of the following is correct concerning requirements about auditor's communications about fraud? a. Fraud that involves senior management should be reported directly to the audit committee regardless of the amounts involved. b. All fraud with a material effect on the financial statements should be reported directly by the auditor to the SEC c. Fraud with a material effect on the financial statements should ordinarily be disclosed by the auditor through the use of an emphasis of a matter paragraph added to the audit report. d. The auditor has no responsibility to disclose fraud outside the entity under any circumstances

Description : Which of the following is correct concerning requirements about auditor's communications about fraud? a. Fraud that involves senior management should be reported directly to the audit committee ... . The auditor has no responsibility to disclose fraud outside the entity under any circumstances

Last Answer : Fraud that involves senior management should be reported directly to the audit committee regardless of the amounts involved

Which of the following is least likely considered a financial statement audit risk factor? a. Management operating and financing decisions are dominated by top management. b. A new client with no prior audit history. c. Rate of change in the entity's industry is rapid. Profitability of the entity relative to its industry is inconsistent.d

Description : Which of the following is least likely considered a financial statement audit risk factor? a. Management operating and financing decisions are dominated by top management. b. A new client with no ... entity's industry is rapid d. Profitability of the entity relative to its industry is inconsistent.

Last Answer : Management operating and financing decisions are dominated by top management.

Which of the following factors most likely would heighten an auditor's concern about the risk of fraudulent financial reporting? a. Large amounts of liquid assets that are easily convertible into cash. b. Low growth and profitability as compared to other entity's in the same industry. c. Financial management's participation in the initial selection of accounting principles. d. An overly complex organizational structure involving unusual lines of authority.

Description : Which of the following factors most likely would heighten an auditor's concern about the risk of fraudulent financial reporting? a. Large amounts of liquid assets that are easily ... of accounting principles. d. An overly complex organizational structure involving unusual lines of authority.

Last Answer : An overly complex organizational structure involving unusual lines of authority.

PSA 315 requires that the auditor should obtain an understanding' of relevant industry, regulatory and other external factors including the applicable financial reporting framework. Which of the following is not an example of matters relating to regulatory environment that the auditor would usually consider? a. Regulatory framework for a regulated industry. b. Product technology relating to the entity's product. c. Legislation and regulation significantly affecting the entity's operationd. Taxation

Description : PSA 315 requires that the auditor should obtain an understanding' of relevant industry, regulatory and other external factors including the applicable financial reporting framework. Which of the ... product. c. Legislation and regulation significantly affecting the entity's operation d. Taxation

Last Answer : Product technology relating to the entity's product

The audit program usually cannot be finalized until the a. Reportable conditions have been communicated to the audit committee of the board of directors. b. Engagement letter has been signed by the auditor and the client. c. Consideration of the entity’s internal control has been completedd. Search for unrecorded liabilities has beenperformed and documented

Description : The audit program usually cannot be finalized until the a. Reportable conditions have been communicated to the audit committee of the board of directors. b. Engagement letter has been ... s internal control has been completed d. Search for unrecorded liabilities has been performed and documented

Last Answer : Consideration of the entity’s internal control has been completed

An auditor obtains an understanding of the entity and its environment in order to a. Make constructive suggestions concerning improvements to the client's internal control. b. Understand the events and transactions that may have an effect on the client's financial statements. c. Evaluate whether the aggregation of known misstatements causes the financial statements taken as a whole to be materially misstated. d. Develop an attitude of professional skepticism concerning management's financial statement assertion

Description : An auditor obtains an understanding of the entity and its environment in order to a. Make constructive suggestions concerning improvements to the client's internal control. b. ... misstated. d. Develop an attitude of professional skepticism concerning management's financial statement assertion

Last Answer : Understand the events and transactions that may have an effect on the client's financial statements

Internal auditing is an independent appraisal function established within an organization to examine and evaluate its activities. To that end, internal auditing provides assistance to a. External auditors b. Stockholders c. Management and the board of directors d. Government

Description : Internal auditing is an independent appraisal function established within an organization to examine and evaluate its activities. To that end, internal auditing provides assistance to a. External auditors b. Stockholders c. Management and the board of directors d. Government

Last Answer : Management and the board of directors

The purpose of an audit of financial statements is to a. Obtain an absolute level of assurance that the financial statements as a whole are free from material misstatement. b. Relieve management or those charged with governance of the responsibility for the preparation and presentation of the financial statements in accordance with the applicable financial reporting framework. c. Enhance the degree of confidence of intended users in the financial statements. d. Assure the future viability of the entity by expressing an opinion on the entity's financial statements.

Description : The purpose of an audit of financial statements is to a. Obtain an absolute level of assurance that the financial statements as a whole are free from material misstatement. b. Relieve management ... the future viability of the entity by expressing an opinion on the entity's financial statements.

Last Answer : Enhance the degree of confidence of intended users in the financial statements.

Which of the following is least likely included in an auditor’s inquiry of management while obtaining information to identify the risks of material misstatement due to fraud? a. Are financial reporting operations controlled by and limited to one location? b. Does it have knowledge of fraud or suspect fraud? c. Does it have programs to mitigate fraud risks? d. Has it reported to the audit committee the nature of the company's internal control?

Description : Which of the following is least likely included in an auditor's inquiry of management while obtaining information to identify the risks of material misstatement due to fraud? a. Are financial reporting ... d. Has it reported to the audit committee the nature of the company's internal control?

Last Answer : Are financial reporting operations controlled by and limited to one location?

Professional judgment:a. Is not used in making decisions about materiality and audit risk. b. Is necessary in the evaluation of management's judgments in applying the entity's applicable financial reporting framework. c. Should be exercised in planning and performing an audit of financial statements but need not be documented. d. Can be used as the justification for the decisions made by the auditor that are not supported by the facts and circumstances of the engagement

Description : Professional judgment:a. Is not used in making decisions about materiality and audit risk. b. Is necessary in the evaluation of management's judgments in applying the entity's applicable financial ... made by the auditor that are not supported by the facts and circumstances of the engagement

Last Answer : Is necessary in the evaluation of management's judgments in applying the entity's applicable financial reporting framework

Which of the following statements is correct concerning an auditor's responsibilities regarding financial statements? a. The auditor's report should provide an assurance as to the future viability of the entity. b. Making suggestions that are adopted about the form and content of an entity's financial statements impairs an auditor's independence. c. An auditor's responsibilities for audited financial statements are confined to the expression of the auditor's opinion. d. The fair presentation of audited financial statements in accordance with an applicable financial reporting framework is an implicit part of the auditor's responsibilities

Description : Which of the following statements is correct concerning an auditor's responsibilities regarding financial statements? a. The auditor's report should provide an assurance as to the future ... with an applicable financial reporting framework is an implicit part of the auditor's responsibilities

Last Answer : An auditor's responsibilities for audited financial statements are confined to the expression of the auditor's opinion

A operational audit is primarily oriented toward a. Future improvements to accomplish management’s goals. b. Past protection provided by existing internal control. c. Operational information is in accordance with generally accepted accounting principles. d. Financial statements are fairly presented.

Description : A operational audit is primarily oriented toward a. Future improvements to accomplish management’s goals. b. Past protection provided by existing internal control. c. Operational information is in accordance with generally accepted accounting principles. d. Financial statements are fairly presented.

Last Answer : Future improvements to accomplish management’s goals.

Internal auditing can affect the scope of the external auditor's audit of financial statements by a. Decreasing the external auditor's need to perform detailed testsb. Eliminating the need to observe thephysical inventory taking.c. Allowing the external auditor to limithis/her audit to the performance ofsubstantive test procedures.d. Limiting direct testing by the externalauditor to management assertions notdirectly tested by internal auditing.

Description : Internal auditing can affect the scope of the external auditor's audit of financial statements by a. Decreasing the external auditor's need to perform detailed tests b. Eliminating the need ... direct testing by the external auditor to management assertions not directly tested by internal auditing.

Last Answer : Decreasing the external auditor's need to perform detailed tests

Whom should auditors contact when they suspect a fraud? a. Senior management b. Expected perpetrators of the fraud c. Audit committee of the board of directors d. A and C

Description : Whom should auditors contact when they suspect a fraud? a. Senior management b. Expected perpetrators of the fraud c. Audit committee of the board of directors d. A and C

Last Answer : A and C

Management’s assertions in the financial statements are relevant to the audit process because: a. They provide evidence that auditors have prepared financial statements in accordance with GAAP b. They embody the audit procedures that will be performed by the audit engagement team. c. They include representations of financial statements in accordance with the applicable reporting criteria d. They relate to regulator’s expectations about audit results

Description : Management's assertions in the financial statements are relevant to the audit process because: a. They provide evidence that auditors have prepared financial statements in accordance with GAAP b ... with the applicable reporting criteria d. They relate to regulator's expectations about audit results

Last Answer : They include representations of financial statements in accordance with the applicable reporting criteria

Management’s assertions in the financial statements are relevant to the audit process because: a. They provide evidence that auditors have prepared financial statements in accordance with GAAP b. They embody the audit procedures that will be performed by the audit engagement team. c. They include representations of financial statements in accordance with the applicable reporting criteria d. They relate to regulator’s expectations about audit results

Description : Management's assertions in the financial statements are relevant to the audit process because: a. They provide evidence that auditors have prepared financial statements in accordance with GAAP b ... with the applicable reporting criteria d. They relate to regulator's expectations about audit results

Last Answer : They include representations of financial statements in accordance with the applicable reporting criteria

In assessing the technical competence of an internal auditor, an external auditor most likely would obtain information about the a. Organizational level to which the internal auditor reports. b. Quality of working paper documentation, reports, and recommendations. c. Influence of management on the internal auditor's duties. d. Entity's commitment to integrity and ethical values.

Description : In assessing the technical competence of an internal auditor, an external auditor most likely would obtain information about the a. Organizational level to which the internal auditor reports. b. Quality of ... on the internal auditor's duties. d. Entity's commitment to integrity and ethical values.

Last Answer : Quality of working paper documentation, reports, and recommendations

Which of the following factors most likely would cause a CPA to decline a new audit engagement? a. The CPA does not understand the entity's operations and industry. b. The CPA is unable to review the predecessor auditor's working papers. c. Management is unwilling to permit inquiry of its legal counsel. d. Management acknowledges that the entity has had recurring operating losses

Description : Which of the following factors most likely would cause a CPA to decline a new audit engagement? a. The CPA does not understand the entity's operations and industry. b. The CPA is ... permit inquiry of its legal counsel. d. Management acknowledges that the entity has had recurring operating losses

Last Answer : Management is unwilling to permit inquiry of its legal counsel

Which of the following should the auditors normally interview as part of their assessment of fraud risk? a. Senior management b. Audit committee c. Various employees whose duties financial reporting responsibilities d. All of the given choices

Description : Which of the following should the auditors normally interview as part of their assessment of fraud risk? a. Senior management b. Audit committee c. Various employees whose duties financial reporting responsibilities d. All of the given choices

Last Answer : All of the given choices

Auditors would normally interview all but which of the following individuals as part of their assessment of fraud risk? a. Senior management b. Audit committee c. Various employees whose duties do not include normal financial reporting responsibilities d. All of the above

Description : Auditors would normally interview all but which of the following individuals as part of their assessment of fraud risk? a. Senior management b. Audit committee c. Various employees whose duties do not include normal financial reporting responsibilities d. All of the above

Last Answer : All of the above

Which of the following characteristics most likely would heighten an auditor’s concern about the risk of intentional manipulation of financial statements? a. Turnover of senior accounting personnel is low. b. Insiders recently purchased additional shares of the entity’s stock. c. Management places substantial emphasis on meeting earnings projections. d. The rate of change in the entity’s industry is slow.

Description : Which of the following characteristics most likely would heighten an auditor's concern about the risk of intentional manipulation of financial statements? a. Turnover of senior accounting personnel is low. b ... meeting earnings projections. d. The rate of change in the entity's industry is slow.

Last Answer : Management places substantial emphasis on meeting earnings projections.

What is the proper organizational role of internal auditing? a. To serve as an independent, objective assurance and consulting activity that adds value to operations. b. To assist the external auditor in order to reduce external audit fees. c. To perform studies to assist in the attainment of more efficient operations. d. To serve as the investigative arm of the audit committee of the board of directors

Description : What is the proper organizational role of internal auditing? a. To serve as an independent, objective assurance and consulting activity that adds value to operations. b. To assist the external auditor in ... . d. To serve as the investigative arm of the audit committee of the board of directors

Last Answer : To serve as an independent, objective assurance and consulting activity that adds value to operations.

Which of the following actions would be an appropriate response by companies to improve the public's perception of their financial reporting? a. Requiring internal auditors to report all significant findings of fraud and illegal activity to the company president. b. Increased adoption of audit committees. c. Keeping external and internal auditing work separated to maintain independence. d. None of the above.

Description : Which of the following actions would be an appropriate response by companies to improve the public's perception of their financial reporting? a. Requiring internal auditors to report all significant ... external and internal auditing work separated to maintain independence. d. None of the above.

Last Answer : Increased adoption of audit committees.

Inquiries directed towards those charged with governance may most likely a. Relate to their activities concerning the design, and effectiveness of the entity's internal control and whether management has satisfactorily responded to any findings from these activities. b. Help the auditor understand the environment in which the financial statements are prepared. c. Relate to changes in the entity's marketing strategies, sales trends, or contractual arrangements with its customers. d. Help the auditor in evaluating the appropriateness of the selection and application of certain accounting policies

Description : Inquiries directed towards those charged with governance may most likely a. Relate to their activities concerning the design, and effectiveness of the entity's internal control and ... the auditor in evaluating the appropriateness of the selection and application of certain accounting policies

Last Answer : Help the auditor understand the environment in which the financial statements are prepared.

Which of the following matters is generally included in an auditor’s engagement letter? a. Management’s responsibility for the entity’s compliance with laws and regulationsb. The factors to be considered in settingpreliminary judgments about materiality. c. Management’s vicarious liability forillegal acts committed by its employees. d. The auditor’s responsibility to search forsignificant internal control deficiencies

Description : Which of the following matters is generally included in an auditor's engagement letter? a. Management's responsibility for the entity's compliance with laws and regulationsb. The factors to ... its employees. d. The auditor's responsibility to search for significant internal control deficiencies

Last Answer : Management’s responsibility for the entity’s compliance with laws and regulations

Which of the following factors would most likely cause a CPA to decide not to accept a new audit engagement? a. The CPA’s lack of understanding of the prospective client’s internal auditor’s computer-assisted audit techniques. b. Management’s disregard of its responsibility to maintain an adequate internal control environment. c. The CPA’s inability to determine whether related-party transactions were consummated on terms equivalent to arm’s-length transactions. d. Management’s refusal to permit the CPA to perform substantive tests before the year-end.

Description : Which of the following factors would most likely cause a CPA to decide not to accept a new audit engagement? a. The CPA's lack of understanding of the prospective client's internal auditor's ... . d. Management's refusal to permit the CPA to perform substantive tests before the year-end.

Last Answer : Management’s disregard of its responsibility to maintain an adequate internal control environment

Why does a company choose to have an independent auditor report on its financial statements? a. Independent auditors will always detect management fraud. b. Independent auditors guarantee the accuracy of the financial statements. c. The company preparing the statements may have a vested interest in reporting certain results. d. An independent audit is designed to search for deficiencies in the company's internal control

Description : Why does a company choose to have an independent auditor report on its financial statements? a. Independent auditors will always detect management fraud. b. Independent auditors guarantee the accuracy ... . An independent audit is designed to search for deficiencies in the company's internal control

Last Answer : The company preparing the statements may have a vested interest in reporting certain results.

Which of the following statements is not a distinction between independent auditing and internal auditing? a. Independent auditors represent third party users external to the auditee entity, whereas internal auditors report directly to management. b. Internal auditors are employees of the auditee, whereas independent auditors are independent contractors. c. The internal auditor's span of coverage goes beyond financial auditing to encompass operational and performance auditing. d. Although independent auditors strive for both validity and relevance of evidence, internal auditors are concerned almost exclusively with validity.

Description : Which of the following statements is not a distinction between independent auditing and internal auditing? a. Independent auditors represent third party users external to the auditee entity, ... validity and relevance of evidence, internal auditors are concerned almost exclusively with validity.

Last Answer : Although independent auditors strive for both validity and relevance of evidence, internal auditors are concerned almost exclusively with validity.

Which of the following is incorrect about responsibility for financial statements? a. Management is responsible for fair presentation of the financial statements. b. Auditor is responsible for expressing an opinion on the financial statements. c. Audit of financial statements does not reduce management's responsibility. d. Fair presentation of financial statements is an implicit part of the auditor's responsibility

Description : Which of the following is incorrect about responsibility for financial statements? a. Management is responsible for fair presentation of the financial statements. b. Auditor is responsible for ... . Fair presentation of financial statements is an implicit part of the auditor's responsibility

Last Answer : Fair presentation of financial statements is an implicit part of the auditor's responsibility

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 relates 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

Description : 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. ... as the principal auditor. d. First inform management that an unqualified opinion cannot be issued

Last Answer : Obtain a knowledge of matters that relates to the nature of the entity's business.

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 relates 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

Description : 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. ... as the principal auditor. d. First inform management that an unqualified opinion cannot be issued

Last Answer : Obtain a knowledge of matters that relates to the nature of the entity's business.

Which of the following auditor concerns most likely could be so serious that the auditor concludes that a financial statement audit cannot be conducted? a. The entity has no formal written code of conduct b. The integrity of the entity’s management is suspect c. Procedures requiring segregation of duties are subject to management override d. Management fails to modify prescribed controls for changes in conditions

Description : Which of the following auditor concerns most likely could be so serious that the auditor concludes that a financial statement audit cannot be conducted? a. The entity has no formal written ... subject to management override d. Management fails to modify prescribed controls for changes in conditions

Last Answer : The integrity of the entity’s management is suspect

The internal auditing profession has advanced primarily as a result of a. Increased interest by Bachelor of Science in Accountancy (BSA) graduates and experienced auditors. b. The limitation of financial statement audit scope. c. Job qualification specifications that include added emphasis on background knowledge and skills. d. Increased complexity and sophistication of business operations.

Description : The internal auditing profession has advanced primarily as a result of a. Increased interest by Bachelor of Science in Accountancy (BSA) graduates and experienced auditors. b. The ... emphasis on background knowledge and skills. d. Increased complexity and sophistication of business operations.

Last Answer : Increased complexity and sophistication of business operations.

The audit committee of the board of directors of a company is responsible for a. Hiring the auditor b. The audit workpapers c. Preparing the financial statements d. Independence and obtaining evidence

Description : The audit committee of the board of directors of a company is responsible for a. Hiring the auditor b. The audit workpapers c. Preparing the financial statements d. Independence and obtaining evidence

Last Answer : Hiring the auditor

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

Description : 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 ... opinion expressed, however that responsibility may be reduced by any use made of internal auditing

Last Answer : Certain aspects of internal auditing may be useful in determining the nature, timing and extent of external audit procedures.

Which of the following statements about independent financial statement audit is correct? a. The audit of financial statements relieves management of its responsibilities for die financial statements. b. An audit is designed to provide limited assurance that the financial statements taken as a whole are free from material misstatement. c. The auditor's opinion is not an assurance as to the future viability of the entity as well as the effectiveness and efficiency withwhich management has conductedthe affairs of the entity.d. The procedures required to conduct anaudit in accordance with PSAs shouldbe determined by the client whoengaged the services of the auditor

Description : Which of the following statements about independent financial statement audit is correct? a. The audit of financial statements relieves management of its responsibilities for die financial statements. b. An ... with PSAs should be determined by the client who engaged the services of the auditor

Last Answer : The auditor's opinion is not an assurance as to the future viability of the entity as well as the effectiveness and efficiency withwhich management has conducted the affairs of the entity.

To emphasize auditor independence from management, many corporations follow the practice of a. Appointing a partner of the CPA firm conducting the examination to the corporation's audit committee. b. Establishing a policy of discouraging social contact between employees of the corporation and the staff of the independent auditor. c. Requesting that a representative of the independent auditor be on hand at the annual stockholders' meeting. d. Having the independent auditor report to an audit committee of outside members of the board of directors

Description : To emphasize auditor independence from management, many corporations follow the practice of a. Appointing a partner of the CPA firm conducting the examination to the corporation's audit committee. b ... the independent auditor report to an audit committee of outside members of the board of directors

Last Answer : Having the independent auditor report to an audit committee of outside members of the board of directors

Which of the following statements concerning consulting services is incorrect? a. The performance of consulting services for audit clients does not, in and of itself, impair the auditor's independence. b. Consulting services differ fundamentally from the CPA's function of attesting to the assertions of other parties. c. Consulting services ordinarily involve external reporting. d. Most CPAs, including those who provide audit and tax services, also provide consulting services to their clients

Description : Which of the following statements concerning consulting services is incorrect? a. The performance of consulting services for audit clients does not, in and of itself, impair the auditor's ... including those who provide audit and tax services, also provide consulting services to their clients

Last Answer : Consulting services ordinarily involve external reporting

Which of the following is considered a primary reason for creating an internal audit department? a. To safeguard resources entrusted to the organization. b. To evaluate and improve the effectiveness of control processes. c. To ensure the accuracy, reliability, and timeliness of financial and operating data used in management's decision making. d. To relieve management of the responsibility for establishing effective controls

Description : Which of the following is considered a primary reason for creating an internal audit department? a. To safeguard resources entrusted to the organization. b. To evaluate and improve the ... 's decision making. d. To relieve management of the responsibility for establishing effective controls

Last Answer : To evaluate and improve the effectiveness of control processes.

Which of the following factors most likely would influence an auditor’s determination of the auditability of an entity’s financial statements? a. The complexity of the accounting system. b. The existence of related-party transactions. c. The adequacy of the accounting records. d. The operating effectiveness of control procedures.

Description : Which of the following factors most likely would influence an auditor's determination of the auditability of an entity's financial statements? a. The complexity of the accounting system. b. The ... c. The adequacy of the accounting records. d. The operating effectiveness of control procedures.

Last Answer : The adequacy of the accounting records.

Internal auditors review the adequacy of the company's internal control system primarily to a. Help determine the nature, timing, and extent of tests necessary to achieve audit objectives. b. Determine whether the internal control system ensures that financial statements are fairly presented. c. Determine whether the internal control system provides reasonable assurance that the company's objectives and goals are met efficiently and economically. d. Ensure that material weaknesses in the system of internal control are corrected

Description : Internal auditors review the adequacy of the company's internal control system primarily to a. Help determine the nature, timing, and extent of tests necessary to achieve audit objectives. b. ... and economically. d. Ensure that material weaknesses in the system of internal control are corrected

Last Answer : Determine whether the internal control system provides reasonable assurance that the company's objectives and goals are met efficiently and economically.

Which of the following methods may be used to commit fraudulent financial reporting? a. Understate liabilities b. Fail to provide adequate disclosurec. Overstate revenuesd. Each of the above can be used tocommit fraudulent financialreporting

Description : Which of the following methods may be used to commit fraudulent financial reporting? a. Understate liabilities b. Fail to provide adequate disclosure c. Overstate revenues d. Each of the above can be used to commit fraudulent financial reporting

Last Answer : Each of the above can be used to commit fraudulent financial reporting

The auditor's evaluation of the likelihood of material employee fraud is normally done initially as a part of a. The assessment of whether to accept the audit engagement. b. Understanding the entity's internal control structure. c. The Tests of Controls. d. The Tests of Transactions

Description : The auditor's evaluation of the likelihood of material employee fraud is normally done initially as a part of a. The assessment of whether to accept the audit engagement. b. Understanding the entity's internal control structure. c. The Tests of Controls. d. The Tests of Transactions

Last Answer : Understanding the entity's internal control structure.

The auditor's evaluation of the likelihood of material employee fraud is normally done initially as a part of a. The assessment of whether to accept the audit engagement. b. Understanding the entity's internal control structure. c. The Tests of Controls. d. The Tests of Transactions

Description : The auditor's evaluation of the likelihood of material employee fraud is normally done initially as a part of a. The assessment of whether to accept the audit engagement. b. Understanding the entity's internal control structure. c. The Tests of Controls. d. The Tests of Transactions

Last Answer : Understanding the entity's internal control structure

When management refuses to disclose in the financial statements noncompliance to laws and regulations which are identified by the independent auditor, the CPA may be charged with unethical conduct for a. Withdrawing from the engagement. b. Issuing a disclaimer of opinionc. Failure to uncover the noncompliance to laws and regulations during the prior audits. d. Reporting these activities to the audit committee..

Description : When management refuses to disclose in the financial statements noncompliance to laws and regulations which are identified by the independent auditor, the CPA may be charged with unethical conduct for ... and regulations during the prior audits. d. Reporting these activities to the audit committee.

Last Answer : Issuing a disclaimer of opinion