The ordinary examination of financial statements is not primarily designed to disclose defalcations and other irregularities although their discovery may result. Normal audit procedures are more likely to detect a fraud arising from a. Collusion on the part of several employees. b. Failure to record cash receipts for services rendered. c. Forgeries on company checks. d. Theft of inventories

The ordinary examination of financial
statements is not primarily designed to
disclose defalcations and other irregularities
although their discovery may result. Normal
audit procedures are more likely to detect a
fraud arising from
a. Collusion on the part of several
employees.
b. Failure to record cash receipts for
services rendered.
c. Forgeries on company checks.
d. Theft of inventories
by

1 Answer

Answer :

Theft of inventories
by

Related questions

The ordinary examination of financial statements is not primarily designed to disclose defalcations and other irregularities although their discovery may result. Normal audit procedures are more likely to detect a fraud arising from a. Theft of inventories. b. Collusion on the part of several employees. c. Failure to record cash receipts for services rendered. d. Forgeries on company checks

Description : The ordinary examination of financial statements is not primarily designed to disclose defalcations and other irregularities although their discovery may result. Normal audit procedures are more likely to ... . Failure to record cash receipts for services rendered. d. Forgeries on company checks

Last Answer : Theft of inventories

Audit programs generally include procedures to test actual transactions and resulting balances. These procedures are primarily designed to a. Detect irregularities that result in misstated financial statements. b. Test the adequacy of internal control. c. Gather corroborative evidence. d. Obtain information of informative disclosures

Description : Audit programs generally include procedures to test actual transactions and resulting balances. These procedures are primarily designed to a. Detect irregularities that result in misstated financial ... control. c. Gather corroborative evidence. d. Obtain information of informative disclosures

Last Answer : Gather corroborative evidence

Which of the following statements would least likely appear in an auditor's engagement letter? a. Our engagement is subject to the risk that material errors, fraud, and defalcations, if they exist, will not be detected. b. During the course of our audit we may observe opportunities for economy in, or improved controls over, your operations. c. After performing our preliminary analytical procedures we will discuss with you the other procedures we consider necessary to complete the engagement. d. Fees for our services are based on our regular per diem rates, plus travel and other out-of-pocket expenses

Description : Which of the following statements would least likely appear in an auditor's engagement letter? a. Our engagement is subject to the risk that material errors, fraud, and defalcations, if they exist, ... services are based on our regular per diem rates, plus travel and other out-of-pocket expenses

Last Answer : After performing our preliminary analytical procedures we will discuss with you the other procedures we consider necessary to complete the engagement.

In connection with the examination of financial statements, an independent auditor could be responsible for failure to detect a material fraud if a. Accountants performing important parts of the work failed to discover a close relationship between the treasurer and the cashier. b. The auditor planned the work in a hasty and inefficient manner. c. Statistical sampling techniques were not used on the audit engagement. d. The fraud was perpetrated by one client employee, who circumvented the existing internal control

Description : In connection with the examination of financial statements, an independent auditor could be responsible for failure to detect a material fraud if a. Accountants performing important parts of the ... . The fraud was perpetrated by one client employee, who circumvented the existing internal control

Last Answer : The auditor planned the work in a hasty and inefficient manner.

In connection with the examination of financial statements, an independent auditor could be responsible for failure to detect a material fraud if a. Statistical sampling techniques were not used on the audit engagement. b. The fraud was perpetrated by one client employee, who circumvented the existing internal control. c. The auditor planned the work in a hasty and inefficient manner. d. Accountants performing important partsof the work failed to discover a closerelationship between the treasurer andthe cashie

Description : In connection with the examination of financial statements, an independent auditor could be responsible for failure to detect a material fraud if a. Statistical sampling techniques were not used on ... partsof the work failed to discover a close relationship between the treasurer and the cashie

Last Answer : The auditor planned the work in a hasty and inefficient manner.

When planning the audit, if the auditor has no reason to believe that illegal acts exist, the auditor should a. Include audit procedures which have a strong probability of detecting illegal acts. b. Make inquiries of management regarding their policies and regarding their knowledge of violations, and then rely on normal audit procedures to detect errors, irregularities, and illegalities. c. Still include some audit procedures designed specifically to uncover illegalities. d. Ignore the topic

Description : When planning the audit, if the auditor has no reason to believe that illegal acts exist, the auditor should a. Include audit procedures which have a strong probability of detecting illegal ... c. Still include some audit procedures designed specifically to uncover illegalities. d. Ignore the topic

Last Answer : Make inquiries of management regarding their policies and regarding their knowledge of violations, and then rely on normal audit procedures to detect errors, irregularities, and illegalities

When planning the audit, if the auditor has no reason to believe that illegal acts exist, the auditor should a. Make inquiries of management regarding their policies and their knowledge of violations, and then rely on normal audit procedures to detect errors, irregularities, and illegalities. b. Still include some audit procedures designed specifically to uncover illegalities. c. Ignore the topic. d. Include audit procedures which have a strong probability of detecting illegal acts

Description : When planning the audit, if the auditor has no reason to believe that illegal acts exist, the auditor should a. Make inquiries of management regarding their policies and their knowledge of ... Ignore the topic. d. Include audit procedures which have a strong probability of detecting illegal acts

Last Answer : Make inquiries of management regarding their policies and their knowledge of violations, and then rely on normal audit procedures to detect errors, irregularities, and illegalities

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.

After studying and evaluating a client's existing internal control, an auditor has concluded that the policies and procedures are well-designed and functioning as intended. Under these circumstances, the auditor would most likely a. Perform further control tests to the extent outlined in the audit program. b. Determine the control policies and procedures that should prevent or detect errors and fraud. c. Set detection risk at a higher level than would be set under conditions of weak internal control. d. Set detection risk at a lower level than would be set under conditions of weak internal control.

Description : After studying and evaluating a client's existing internal control, an auditor has concluded that the policies and procedures are well-designed and functioning as intended. Under these circumstances, the ... risk at a lower level than would be set under conditions of weak internal control.

Last Answer : Set detection risk at a higher level than would be set under conditions of weak internal control.

The auditor's responsibility for failure to detect fraud arises a. Whenever the amounts involved are material. b. When such failure clearly results from noncompliance to generally accepted auditing standards. c. Only when such failure clearly results from negligence so gross as to sustain an inference of fraud on the part of the auditor. d. Only when the examination was specifically designed to detect fraud

Description : The auditor's responsibility for failure to detect fraud arises a. Whenever the amounts involved are material. b. When such failure clearly results from noncompliance to generally accepted auditing ... part of the auditor. d. Only when the examination was specifically designed to detect fraud

Last Answer : When such failure clearly results from noncompliance to generally accepted auditing standards.

Which of the following statements reflects an auditor's responsibility for detecting fraud and error? a. An auditor is responsible for detecting employee errors and simple fraud, but not for discovering fraud involving employee collusion or management overrideAn auditor should design the auditto provide reasonable assurance ofdetecting errors and fraud that arematerial to the financial statements.c. An auditor should plan the audit to detecterrors and fraud that are caused bydepartures from the applicable FRF.d. An auditor is not responsible fordetecting errors and fraud unless theapplication of PSAs and PAPs would resultin such detection

Description : Which of the following statements reflects an auditor's responsibility for detecting fraud and error? a. An auditor is responsible for detecting employee errors and simple fraud, but not for ... detecting errors and fraud unless the application of PSAs and PAPs would result in such detection

Last Answer : An auditor should design the audit to provide reasonable assurance of detecting errors and fraud that are material to the financial statements.

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

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 least likely limits the auditor’s ability to detect material misstatement? a. The inherent limitations of any accounting and internal control system. b. Most audit evidences are conclusive rather than being persuasive. c. Audit is based on testing d. Audit procedures that are effective in detecting ordinary misstatements are ineffective in detecting intentional misstatements

Description : Which of the following least likely limits the auditor's ability to detect material misstatement? a. The inherent limitations of any accounting and internal control system. b ... procedures that are effective in detecting ordinary misstatements are ineffective in detecting intentional misstatements

Last Answer : Most audit evidences are conclusive rather than being persuasive

The essence of the attest function is to a. Detect fraud. b. Examine individual transactions so that the auditor can certify as to their validity. c. Determine whether the client's financial statements are fairly stated. d. Ensure the consistent application of correct accounting procedures.

Description : The essence of the attest function is to a. Detect fraud. b. Examine individual transactions so that the auditor can certify as to their validity. c. Determine whether the client's financial statements are fairly stated. d. Ensure the consistent application of correct accounting procedures.

Last Answer : Determine whether the client's financial statements are fairly stated.

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

.As part of audit planning, CPAs should design audit programs for each individual audit and should include audit steps and procedures to a. Ensure that only material items are audited. b. Provide assurance that the objectives of the audit are met. c. Detect and eliminate fraud. d. Increase the amount of management information available

Description : .As part of audit planning, CPAs should design audit programs for each individual audit and should include audit steps and procedures to a. Ensure that only material items are audited. b. Provide ... are met. c. Detect and eliminate fraud. d. Increase the amount of management information available

Last Answer : Provide assurance that the objectives of the audit are met.

Which of the following is most likely to be a response to the auditor's assessment that the risk of material misstatement due to fraud for the existence of inventory is high? a. Observe test counts of inventory at certain locations on an unannounced basis. b. Perform analytical procedures rather than taking test counts. c. Request that inventories be counted prior to year end. d. Request that inventory counts at the various locations be counted on different dates so as to allow the same auditor to be present at every count

Description : Which of the following is most likely to be a response to the auditor's assessment that the risk of material misstatement due to fraud for the existence of inventory is high? a. Observe test counts ... be counted on different dates so as to allow the same auditor to be present at every count

Last Answer : Observe test counts of inventory at certain locations on an unannounced basis.

The auditor's defense of contributory negligence is most likely to prevail when a. Third party injury has been minimal. b. The client is privately held as contrasted with a public company. c. Undetected errors have resulted in materially misleading financial statements. d. The auditor fails to detect fraud resulting from management override of the control structure

Description : The auditor's defense of contributory negligence is most likely to prevail when a. Third party injury has been minimal. b. The client is privately held as contrasted with a public company ... statements. d. The auditor fails to detect fraud resulting from management override of the control structure

Last Answer : The auditor fails to detect fraud resulting from management override of the control structure

The auditor's defense of contributory negligence is most likely to prevail when a. Third party injury has been minimal. b. The client is privately held as contrasted with a public company. c. Undetected errors have resulted in materially misleading financial statements. d. The auditor fails to detect fraud resulting from management override of the control structure.

Description : The auditor's defense of contributory negligence is most likely to prevail when a. Third party injury has been minimal. b. The client is privately held as contrasted with a public company. ... . d. The auditor fails to detect fraud resulting from management override of the control structure.

Last Answer : The auditor fails to detect fraud resulting from management override of the control structure.

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.

The Philippine Standards on Auditing issued by AASC a. Need to be applied on all audit related. b. Require that in no circumstances would an auditor may judge it necessary to depart from a PSA, even though such a departure may result to more effective achievement of the objective of an audit. c. Apply to independent examination of financial statements of any entity when such an examination is conducted for the purpose of expressing an opinion. d. Must not apply to other related activities of auditors

Description : The Philippine Standards on Auditing issued by AASC a. Need to be applied on all audit related. b. Require that in no circumstances would an auditor may judge it necessary to depart from a PSA, ... for the purpose of expressing an opinion. d. Must not apply to other related activities of auditors

Last Answer : Apply to independent examination of financial statements of any entity when such an examination is conducted for the purpose of expressing an opinion.

The Philippine Standards on Auditing issued by AASC: a. Apply to independent examination of financial statements of any entity when such an examination is conducted for the purpose of expressing an opinion. b. Need to be applied on all audit related. c. Must not apply to other related activities of auditors. d. Require that in no circumstances would an auditor may judge it necessary to depart from a PSA, even though such a departure may result to more effective achievement of the objective of an audit

Description : The Philippine Standards on Auditing issued by AASC: a. Apply to independent examination of financial statements of any entity when such an examination is conducted for the purpose of expressing an ... though such a departure may result to more effective achievement of the objective of an audit

Last Answer : Apply to independent examination of financial statements of any entity when such an examination is conducted for the purpose of expressing an opinion

The management responsibility to detect and prevent fraud and error is accomplished by a. Having an annual audit of financial statements. b. Implementing adequate quality control system. c. Implementing adequate accounting and internal control system. d. Issuing a representation letter to the auditor.

Description : The management responsibility to detect and prevent fraud and error is accomplished by a. Having an annual audit of financial statements. b. Implementing adequate quality control system. c. ... adequate accounting and internal control system. d. Issuing a representation letter to the auditor.

Last Answer : Implementing adequate accounting and internal control system

Which of the following is an incorrect statement relating to the theoretical framework of auditing? a. Effective internal control structure reduces the probability of fraud or irregularities in an organization. b. Application of generally accepted accounting principles results in a fair presentation of financial statements. c. When examining financial data foropinion thereon, the auditor actsexclusively in the capacity of an auditor.d. In collecting evidence, auditorsshould maintain an attitude of trustabout their clients' assertions. the purpose of expressing an independent

Description : Which of the following is an incorrect statement relating to the theoretical framework of auditing? a. Effective internal control structure reduces the probability of fraud or irregularities in ... collecting evidence, auditors should maintain an attitude of trust about their clients' assertions.

Last Answer : In collecting evidence, auditors should maintain an attitude of trust about their clients' assertions.

A review of a company's financial statements by a CPA firm: a. Is similar in scope to an audit and adds similar credibility to the statements. b. Is significantly less in scope than an audit and results in a report which provides positive assurance, although not absolute assurance. c. Concludes with the issuance of a report expressing the CPA's opinion as to the fairness of the financial statements. d. Is designed to provide only moderate assurance

Description : A review of a company's financial statements by a CPA firm: a. Is similar in scope to an audit and adds similar credibility to the statements. b. Is significantly less in scope than an ... s opinion as to the fairness of the financial statements. d. Is designed to provide only moderate assurance

Last Answer : Is designed to provide only moderate assurance

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

Which of the following might be considered a "red flag" indicating possible fraud in a large manufacturing company with several subsidiaries? a. A consistent record of above average return on investment for all subsidiaries b. The existence of a financial subsidiary c. Use of separate bank accounts for payrolls by each subsidiary d. Complex sales-transactions and transfers of funds between affiliated companies

Description : Which of the following might be considered a "red flag" indicating possible fraud in a large manufacturing company with several subsidiaries? a. A consistent record of above average ... payrolls by each subsidiary d. Complex sales-transactions and transfers of funds between affiliated companies

Last Answer : Complex sales-transactions and transfers of funds between affiliated companies

The provision of services by a firm or network firm to an audit client that involve the design and implementation of financial information technology systems that are used to generate information forming part of a client's financial statements may most likely create a. Self-interest threat. b. Self-review threat. c. Intimidation threat. d. Familiarity threat

Description : The provision of services by a firm or network firm to an audit client that involve the design and implementation of financial information technology systems that are used to generate information forming ... Self-interest threat. b. Self-review threat. c. Intimidation threat. d. Familiarity threat

Last Answer : Self-review threat

Which of the following factors or conditions is an auditor least likely to plan an audit to discover? a. High turnover of senior management. b. Inadequate monitoring of significant controls. c. Inability to generate positive cash flows from operations. d. Financial pressures affecting employees

Description : Which of the following factors or conditions is an auditor least likely to plan an audit to discover? a. High turnover of senior management. b. Inadequate monitoring of significant controls. c. Inability to generate positive cash flows from operations. d. Financial pressures affecting employees

Last Answer : Financial pressures affecting employees

Which of the following conditions identified during fieldwork of an audit is most likely to affect the auditor’s assessment of the risk of misstatement due to fraud? a. Year-end adjusting journal entries. b. Checks for significant amounts outstanding at year-end. c. Missing documents. d. Computer generated documents

Description : Which of the following conditions identified during fieldwork of an audit is most likely to affect the auditor's assessment of the risk of misstatement due to fraud? a. Year-end adjusting ... for significant amounts outstanding at year-end. c. Missing documents. d. Computer generated documents

Last Answer : Missing documents

Which of the following is most likely to be an overall response to fraud risks identified in an audit? a. Only use certified public accountants on the engagemenb. Place increased emphasis on the audit of objective transactions rather than subjective transactions. c. Supervise members of the audit team less closely and rely more upon judgment. d. Use less predictable audit procedures.t

Description : Which of the following is most likely to be an overall response to fraud risks identified in an audit? a. Only use certified public accountants on the engagement b. Place increased emphasis on the ... the audit team less closely and rely more upon judgment. d. Use less predictable audit procedures.

Last Answer : Use less predictable audit procedures.

Which of the following is most likely to be an overall response to fraud risks identified in an audit? a. Supervise members of the audit team less closely and rely more upon judgment. b. Use less predictable audit procedures. c. Use only certified public accountants on the engagement. d. Place increased emphasis on the audit of objective transactions rather than subjective transactions.

Description : Which of the following is most likely to be an overall response to fraud risks identified in an audit? a. Supervise members of the audit team less closely and rely more upon ... engagement. d. Place increased emphasis on the audit of objective transactions rather than subjective transactions.

Last Answer : Use less predictable audit procedures.

Which of the following is most likely to be an overall response to fraud risks identified in an audit? a. Supervise members of the audit team less closely and rely more upon judgment. b. Only use certified public accountants on the engagement. c. Place increased emphasis on the audit of objective transactions rather than subjective transactions. d. Use less predictable audit procedures.

Description : Which of the following is most likely to be an overall response to fraud risks identified in an audit? a. Supervise members of the audit team less closely and rely more upon ... the audit of objective transactions rather than subjective transactions. d. Use less predictable audit procedures.

Last Answer : Use less predictable audit procedures.

The primary reason an engagement letter is obtained by audit firms prior to starting the work is that a. It provides an insurance policy for companies entering into the agreement. b. It clarifies the responsibilities of management and those of the auditor. c. It communicates the type of opinion that will be rendered on the engagement d. It defines the firm's policies and procedures regarding new clients

Description : The primary reason an engagement letter is obtained by audit firms prior to starting the work is that a. It provides an insurance policy for companies entering into the agreement. b. It clarifies ... be rendered on the engagement d. It defines the firm's policies and procedures regarding new clients

Last Answer : It clarifies the responsibilities of management and those of the auditor

The overriding objective of the International Auditing Standards that are issued by the International Auditing Practices Committee of the IFAC is a. To override a country’s regulations governing the audit of financial statements. b. To improve the uniformity of auditing practices and related services throughout the world. c. To provide a uniform application of specific audit procedures that are acceptable worldwide. d. To replace generally accepted auditing standards.

Description : The overriding objective of the International Auditing Standards that are issued by the International Auditing Practices Committee of the IFAC is a. To override a country's regulations governing ... audit procedures that are acceptable worldwide. d. To replace generally accepted auditing standards.

Last Answer : To improve the uniformity of auditing practices and related services throughout the world

The overriding objective of the International Auditing Standards that are issued by the International Auditing Practices Committee of the IFAC is a. To override a country’s regulations governing the audit of financial statements. b. To improve the uniformity of auditing practices and related services throughout the world. c. To provide a uniform application of specific audit procedures that are acceptable worldwide. d. To replace generally accepted auditing standards

Description : The overriding objective of the International Auditing Standards that are issued by the International Auditing Practices Committee of the IFAC is a. To override a country's regulations ... specific audit procedures that are acceptable worldwide. d. To replace generally accepted auditing standards

Last Answer : To improve the uniformity of auditing practices and related services throughout the world.

In designing written audit programs, an auditor should establish specific audit objectives that relate primarily to the a. Financial statement assertions. b. Timing of audit procedures. c. Cost-benefit of gathering evidence. d. Selected audit techniques.

Description : In designing written audit programs, an auditor should establish specific audit objectives that relate primarily to the a. Financial statement assertions. b. Timing of audit procedures. c. Cost-benefit of gathering evidence. d. Selected audit techniques.

Last Answer : Financial statement assertions

Non-assurance engagements include all of the following services, except: a. Agreed-upon procedures engagements. b. Compilations of financial or other information. c. Management and tax consulting. d. Examination of prospective financial information

Description : Non-assurance engagements include all of the following services, except: a. Agreed-upon procedures engagements. b. Compilations of financial or other information. c. Management and tax consulting. d. Examination of prospective financial information

Last Answer : Examination of prospective financial information

A principal purpose of a letter of representation from management is to a. Remind management of its primary responsibility for financial statements. b. Serve as an introduction to company personnel and an authorization to examine the records. c. Discharge the auditor from legal liability for his examination. d. Confirm in writing management's approval of limitations on the scope of the audit

Description : A principal purpose of a letter of representation from management is to a. Remind management of its primary responsibility for financial statements. b. Serve as an introduction to company personnel and ... . d. Confirm in writing management's approval of limitations on the scope of the audit

Last Answer : Remind management of its primary responsibility for financial statements.

A principal purpose of a letter of representation from management is to a. Serve as an introduction to company personnel and an authorization to examine the records. b. Discharge the auditor from legal liability for his examination. c. Confirm in writing management's approval of limitations on the scope of the audit. d. Remind management of its primary responsibility for financial statements.

Description : A principal purpose of a letter of representation from management is to a. Serve as an introduction to company personnel and an authorization to examine the records. b. Discharge the auditor ... the scope of the audit. d. Remind management of its primary responsibility for financial statements.

Last Answer : Remind management of its primary responsibility for financial statements.

Material misstatements in financial statements may arise from all of the following except a. Fraud b. Error c. Limitations of the audit d. Noncompliance with laws and regulations

Description : Material misstatements in financial statements may arise from all of the following except a. Fraud b. Error c. Limitations of the audit d. Noncompliance with laws and regulations

Last Answer : Limitations of the audit

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.

Description : 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 ... the minutes of stockholder and director meetings to discover whether any unusual transactions have occurred.

Last Answer : Performing analytical procedures to identify areas that may represent specific risks.

Of the following statements, which best distinguishes ordinary negligence from gross negligence? a. The more material the undetected error the greater the likelihood of ordinary negligence. b. Gross negligence is most probable when the auditor fails to detect errors that occurred under conditions of strong internal control. c. Failure to detect material errors, whether internal control is strong or weak, suggests gross negligence. d. Failure to exercise reasonable care denotes ordinary negligence, whereas failure to exercise minimal care indicates gross negligence

Description : Of the following statements, which best distinguishes ordinary negligence from gross negligence? a. The more material the undetected error the greater the likelihood of ordinary negligence. ... care denotes ordinary negligence, whereas failure to exercise minimal care indicates gross negligence

Last Answer : Failure to exercise reasonable care denotes ordinary negligence, whereas failure to exercise minimal care indicates gross negligence