Reasonable assurance means: a. Gathering of all available corroborating evidence for the auditor to conclude that there are no material misstatements in the financial statements, taken as a whole. b. Gathering of the audit evidence necessary for the auditor to conclude that the financial statements, taken as a whole, are free from any misstatements. c. Gathering of the audit evidence necessary for the auditor to conclude that the financial statements are free of material unintentional misstatements. d. Gathering of the audit evidence necessary for the auditor to conclude that there are no material misstatements in the financial

Reasonable assurance means:
a. Gathering of all available corroborating
evidence for the auditor to conclude that
there are no material misstatements in
the financial statements, taken as a
whole.
b. Gathering of the audit evidence
necessary for the auditor to conclude
that the financial statements, taken as a
whole, are free from any misstatements.
c. Gathering of the audit evidence
necessary for the auditor to conclude
that the financial statements are free of
material unintentional misstatements.
d. Gathering of the audit evidence
necessary for the auditor to
conclude that there are no material
misstatements in the financial
by

1 Answer

Answer :

Gathering of the audit evidence
necessary for the auditor to
conclude that there are no material
misstatements in the financial
statements, taken as a whole
by

Related questions

What is the responsibility of an auditor who is engaged to audit the financial statements of a government entity? a. Assess control risk with respect to each component of internal control. b. Assume responsibility for assuring that the entity complies with applicable laws and regulations. c. Obtain an understanding of the possible financial statement effects of laws and regulations having direct and material effects on amounts reported. d. Design the audit to provide reasonable assurance that the statements are free of material misstatements resulting from illegal acts having direct or indirect effects

Description : What is the responsibility of an auditor who is engaged to audit the financial statements of a government entity? a. Assess control risk with respect to each component of internal ... the statements are free of material misstatements resulting from illegal acts having direct or indirect effects

Last Answer : Obtain an understanding of the possible financial statement effects of laws and regulations having direct and material effects on amounts reported.

The auditor has considerable responsibility for notifying users as to whether or not the statements are properly stated. This imposes upon the auditor a duty to a. Provide reasonable assurance that material misstatements will be detected. b. Be an insurer of the fairness in the statements. c. Be a guarantor of the fairness in the statements. d. Be equally responsible with management for the preparation of the financial statements

Description : The auditor has considerable responsibility for notifying users as to whether or not the statements are properly stated. This imposes upon the auditor a duty to a. Provide reasonable assurance ... statements. d. Be equally responsible with management for the preparation of the financial statements

Last Answer : Provide reasonable assurance that material misstatements will be detected.

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.

Which of the following statements is incorrect about materiality? a. The concept of materiality recognizes that some matters are important for fair presentation of financial statements in conformity with GAAP, while other matters are not important. b. An auditor considers materiality for planning purposes in terms of the largest aggregate level of misstatements that could be material to any one of the financial statements. c. Materiality judgments are made in light of surrounding circumstances and necessarily involve both quantitative and qualitative judgments. d. An auditor’s consideration of materiality is influenced by the auditor’s perception of the needs of a reasonable person who will rely on the financial statements

Description : Which of the following statements is incorrect about materiality? a. The concept of materiality recognizes that some matters are important for fair presentation of financial statements in conformity with ... s perception of the needs of a reasonable person who will rely on the financial statements

Last Answer : An auditor considers materiality for planning purposes in terms of the largest aggregate level of misstatements that could be material to any one of the financial statements

Which of the following is not an assurance that the auditors give to the parties who rely on the financial statements? a. Auditors know how the amounts and disclosures in the financial statements were produced. b. Auditors gathered enough evidence to provide a reasonable basis for forming an opinionc. Auditors give assurance that thefinancial statements are accurate.d. If the evidence allows the auditors to doso, auditors give assurance in the form ofopinion, as to whether the financialstatements taken as a whole are fairlypresented in conformity with GAAP

Description : Which of the following is not an assurance that the auditors give to the parties who rely on the financial statements? a. Auditors know how the amounts and disclosures in the financial statements ... as to whether the financial statements taken as a whole are fairly presented in conformity with GAAP

Last Answer : Auditors give assurance that the financial statements are accurate

Which of the following is not an assurance that the auditors give to the parties who rely on the financial statements? a. Auditors give assurance that the financial statements are accurate. b. Auditors know how the amounts and disclosures in the financial statements were produced. c. Auditors gathered enough evidence to provide a reasonable basis for forming an opinion. d. If the evidence allows the auditors to doso, auditors give assurance in the form ofopinion, as to whether the financialstatements taken as a whole are fairlypresented in conformity with GAAP

Description : Which of the following is not an assurance that the auditors give to the parties who rely on the financial statements? a. Auditors give assurance that the financial statements are accurate. b. ... as to whether the financial statements taken as a whole are fairly presented in conformity with GAAP

Last Answer : Auditors give assurance that the financial statements are accurate

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 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.

According to Philippine Standards on Auditing, because there are inherent limitations in an audit that affect the auditor's ability to detect material misstatements, the auditor is: a. Neither a guarantor nor an insurer of financial statements. b. A guarantor but not an insurer of the statements. c. An insurer but not a guarantor of the statements. d. Both a guarantor and an insurer of the financial statements.

Description : According to Philippine Standards on Auditing, because there are inherent limitations in an audit that affect the auditor's ability to detect material misstatements, the auditor is: a. Neither a ... guarantor of the statements. d. Both a guarantor and an insurer of the financial statements.

Last Answer : Neither a guarantor nor an insurer of financial statements

Which of the following underlies the application of generally accepted auditing standards, particularly the standards of fieldwork and reporting? a. Element of corroborating evidence b. Element of reasonable assurance c. Elements of materiality and risk d. Element of internal control

Description : Which of the following underlies the application of generally accepted auditing standards, particularly the standards of fieldwork and reporting? a. Element of corroborating evidence b. Element of reasonable assurance c. Elements of materiality and risk d. Element of internal control

Last Answer : Elements of materiality and risk

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

Which of the following is not one of the general principles governing the audit of financial statements? a. The auditor should conduct the audit in accordance with PSA. b. The auditor should comply with the Philippine Code of Professional Ethics. c. The auditor should plan and perform the audit with an attitude of professional skepticism. d. The auditor should obtain sufficient appropriate evidence primarily through inquiry and analyticaprocedures to be able to draw reasonable conclusions.l

Description : Which of the following is not one of the general principles governing the audit of financial statements? a. The auditor should conduct the audit in accordance with PSA. b. The ... appropriate evidence primarily through inquiry and analytical procedures to be able to draw reasonable conclusions.

Last Answer : The auditor should obtain sufficient appropriate evidence primarily through inquiry and analytical procedures to be able to draw reasonable conclusions

The exercise of due professional care requires that an auditor a. Use error-free judgment. b. Consider internal control, including tests of controls. c. Critically review the work done at every level of supervision. d. Examine all corroborating evidence available.

Description : The exercise of due professional care requires that an auditor a. Use error-free judgment. b. Consider internal control, including tests of controls. c. Critically review the work done at every level of supervision. d. Examine all corroborating evidence available.

Last Answer : Critically review the work done at every level of supervision

The exercise of due professional care requires that an auditor a. Uses error-free judgment. b. Considers internal control, including tests of controls. c. Examines all corroborating evidence available. d. Be responsible for fulfilling his or her duties diligently and carefull

Description : The exercise of due professional care requires that an auditor a. Uses error-free judgment. b. Considers internal control, including tests of controls. c. Examines all corroborating evidence available. d. Be responsible for fulfilling his or her duties diligently and carefull

Last Answer : Be responsible for fulfilling his or her duties diligently and carefull

The exercise of due professional care requires that an auditor a. Uses error-free judgment. b. Considers internal control, including tests of controls. c. Be responsible for fulfilling his or her duties diligently and carefully. d. Examines all corroborating evidence available.

Description : The exercise of due professional care requires that an auditor a. Uses error-free judgment. b. Considers internal control, including tests of controls. c. Be responsible for fulfilling his or her duties diligently and carefully. d. Examines all corroborating evidence available.

Last Answer : Be responsible for fulfilling his or her duties diligently and carefully.

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

For what reason does an independent auditor gather evidence? a. To assess management performance b. To detect fraud c. To detect misstatements d. To form an opinion on the financial statements

Description : For what reason does an independent auditor gather evidence? a. To assess management performance b. To detect fraud c. To detect misstatements d. To form an opinion on the financial statements

Last Answer : To form an opinion on the financial statements

Operational audits generally have been conducted by internal and COA auditors, but may be performed by certified public accountants. A primary purpose of an operational audit is to provide: a. A measure of management performance in meeting organizational goalsb. The results of internal examinations of financial and accounting matters to a company's top-level management. c. Aid to the independent-auditor, who is conducting the examination of the financial statements. d. A means of assurance that internal accounting controls are functioning as planned.

Description : Operational audits generally have been conducted by internal and COA auditors, but may be performed by certified public accountants. A primary purpose of an operational audit is to provide: ... statements. d. A means of assurance that internal accounting controls are functioning as planned

Last Answer : A measure of management performance in meeting organizational goals

It is the amount or amounts set by the auditor at less than materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. a. Lower materiality b. Lesser materiality c. Performance materiality d. Materiality

Description : It is the amount or amounts set by the auditor at less than materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of ... as a whole. a. Lower materiality b. Lesser materiality c. Performance materiality d. Materiality

Last Answer : Performance materiality

The primary difference between financial statement errors and fraud is that a. Errors are intentional misstatements by management, while fraud involves unintentional mistakes or omissions. b. Errors are more likely to provide an indication that an illegal act has occurred. c. Errors are unintentional mistakes or omissions, while fraud involves intentional misstatements. d. There is no difference as errors and fraud have the same meaning.

Description : The primary difference between financial statement errors and fraud is that a. Errors are intentional misstatements by management, while fraud involves unintentional mistakes or omissions. b. Errors are more ... misstatements. d. There is no difference as errors and fraud have the same meaning.

Last Answer : Errors are unintentional mistakes or omissions, while fraud involves intentional misstatements.

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.

The exercise of due professional care requires that an auditor a. Critically review the judgment exercised at every level of supervision. b. Attain the proper balance of professional experience and formal education. c. Reduce control risk below the maximum. d. Examine all available corroborating evidence

Description : The exercise of due professional care requires that an auditor a. Critically review the judgment exercised at every level of supervision. b. Attain the proper balance of professional experience ... education. c. Reduce control risk below the maximum. d. Examine all available corroborating evidence

Last Answer : Critically review the judgment exercised at every level of supervision.

In an engagement to perform agreed-upon procedures, an auditor is engaged to: a. Use accounting expertise as opposed to auditing expertise to collect, classify, and summarize financial information. b. Provide a moderate level of assurance that the information is free of material misstatement. c. Provide a high, but not absolute, level of assurance that the information is free of material misstatement. d. Carry out those procedures of an audit nature to which the auditor and the entity and any appropriate third parties have agreed and to report on factual findings

Description : In an engagement to perform agreed-upon procedures, an auditor is engaged to: a. Use accounting expertise as opposed to auditing expertise to collect, classify, and summarize financial information. b ... and the entity and any appropriate third parties have agreed and to report on factual findings

Last Answer : Carry out those procedures of an audit nature to which the auditor and the entity and any appropriate third parties have agreed and to report on factual findings

Which of the following statements does not properly describe a limitation of an audit? a. Many audit conclusions are made on the basis of examining a sample of evidence. b. The work, under taken by the auditor is permeated by judgment. c. Fatigue and human weaknesses can cause auditors to overlook pertinent evidence. d. Many financial statement assertions cannot be audited

Description : Which of the following statements does not properly describe a limitation of an audit? a. Many audit conclusions are made on the basis of examining a sample of evidence. b. The ... weaknesses can cause auditors to overlook pertinent evidence. d. Many financial statement assertions cannot be audited

Last Answer : Fatigue and human weaknesses can cause auditors to overlook pertinent evidence

Which of the following statements does not properly describe a limitation of an audit? a. Many financial statement assertions cannot be audited. b. Many audit conclusions are made on the basis of examining a sample of evidence. c. The work, under taken by the auditor is permeated by judgment. d. Fatigue and human weaknesses can cause auditors to overlook pertinent evidence

Description : Which of the following statements does not properly describe a limitation of an audit? a. Many financial statement assertions cannot be audited. b. Many audit conclusions are made on the ... permeated by judgment. d. Fatigue and human weaknesses can cause auditors to overlook pertinent evidence

Last Answer : Fatigue and human weaknesses can cause auditors to overlook pertinent evidence

Which of the following statements is correct concerning the auditor's responsibility with respect to illegal acts? a. An auditor must design tests to detect both direct-effect and indirect-effect illegal acts. b. An auditor must design tests to detect both immaterial and material directeffect illegal acts. c. An auditor must design tests to obtain reasonable assurance of detecting material direct-effect illegal acts. d. An auditor must design tests to detect both material direct-effect and material indirect-effect illegal acts

Description : Which of the following statements is correct concerning the auditor's responsibility with respect to illegal acts? a. An auditor must design tests to detect both direct-effect and indirect- ... auditor must design tests to detect both material direct-effect and material indirect-effect illegal acts

Last Answer : An auditor must design tests to obtain reasonable assurance of detecting material direct-effect illegal acts.

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

The risk that the auditor's own work will lead to the decision that material misstatements do not exist in the financial statements, when in fact such misstatements do exist, is a. Control risk b. Detection risk c. Inherent risk d. Audit risk

Description : The risk that the auditor's own work will lead to the decision that material misstatements do not exist in the financial statements, when in fact such misstatements do exist, is a. Control risk b. Detection risk c. Inherent risk d. Audit risk

Last Answer : Audit risk

The auditor's best defense when material misstatements in the financial statements are not uncovered in the audit is that a. The financial statements are client's responsibility. b. The audit was conducted in accordance with PSAs c. Client is guilty of contributory negligence. d. The audit was conducted in accordance with generally accepted accounting principles.

Description : The auditor's best defense when material misstatements in the financial statements are not uncovered in the audit is that a. The financial statements are client's responsibility. b. ... contributory negligence. d. The audit was conducted in accordance with generally accepted accounting principles.

Last Answer : The audit was conducted in accordance with PSAs

Which of the following statements about independent financial statement audit is incorrect? a. The term "scope of the audit" refers to audit procedures deemed necessary ithe circumstances to achieve the objective of the audit. b. The auditor's opinion enhances the credibility of the financial statements. c. The phrase used to express the auditor's opinion is "present fairly, in all material respects". d. The risk that the auditor will fail to uncover material misstatement is eliminated when the auditor conducts the audit in accordance with PSAs.n

Description : Which of the following statements about independent financial statement audit is incorrect? a. The term "scope of the audit" refers to audit procedures deemed necessary in the circumstances ... uncover material misstatement is eliminated when the auditor conducts the audit in accordance with PSAs.

Last Answer : The risk that the auditor will fail to uncover material misstatement is eliminated when the auditor conducts the audit in accordance with PSAs.

By providing high level of assurance on audit reports on financial statements, the auditor a. Guarantees the fair presentation of the financial statements. b. Confirms the accuracy of the financial statements. c. Enhances the credibility of the financial statements. d. Assures the readers that fraudulent activities of employees have been detected.

Description : By providing high level of assurance on audit reports on financial statements, the auditor a. Guarantees the fair presentation of the financial statements. b. Confirms the accuracy of the ... financial statements. d. Assures the readers that fraudulent activities of employees have been detected.

Last Answer : Enhances the credibility of the financial statements.

When the professional accountant has obtained sufficient appropriate evidence to conclude that the subject matter conforms in all material respects with identified suitable criteria, he or she can provide what level of assurance? a. None b. High c. Absolute d. Moderate

Description : When the professional accountant has obtained sufficient appropriate evidence to conclude that the subject matter conforms in all material respects with identified suitable criteria, he or she can provide what level of assurance? a. None b. High c. Absolute d. Moderate

Last Answer : High

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

Reducing assurance engagement risk to zero is very rarely attainable or cost beneficial as a result of the following factors, except a. The use of selective testing. b. The fact that much of the evidence available to the practitioner is persuasive rather than conclusive. c. The practitioner may not have the required assurance knowledge and skills to gather and evaluate evidence. d. The use of judgment in gathering and evaluating evidence and forming conclusions based on that evidence

Description : Reducing assurance engagement risk to zero is very rarely attainable or cost beneficial as a result of the following factors, except a. The use of selective testing. b. The fact that much ... d. The use of judgment in gathering and evaluating evidence and forming conclusions based on that evidence

Last Answer : The practitioner may not have the required assurance knowledge and skills to gather and evaluate evidence.

The auditor gives an audit opinion on the fair presentation of the financial statements and associates his or her name with them when, on the basis of adequate evidence, the auditor concludes that the financial statements are unlikely to mislead a. A prudent user. b. Management. c. The reader. d. Investors

Description : The auditor gives an audit opinion on the fair presentation of the financial statements and associates his or her name with them when, on the basis of adequate evidence, the auditor concludes that the financial ... are unlikely to mislead a. A prudent user. b. Management. c. The reader. d. Investors

Last Answer : A prudent user.

The reason why an auditor accumulates evidence is to a. Defend himself in the event of a lawsuit. b. Justify the conclusions he has otherwise reached. c. Satisfy the requirements of the bureau of internal revenue. d. Enable him to reach conclusions about the fairness of the financial statements and issue an appropriate audit report

Description : The reason why an auditor accumulates evidence is to a. Defend himself in the event of a lawsuit. b. Justify the conclusions he has otherwise reached. c. Satisfy the requirements of the ... him to reach conclusions about the fairness of the financial statements and issue an appropriate audit report

Last Answer : Enable him to reach conclusions about the fairness of the financial statements and issue an appropriate audit report

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

For assurance engagements regarding historical financial information, reasonable assurance engagements are called: a. Review engagements. b. Audit engagements. c. Compilation engagements. d. Agreed-upon procedures engagements

Description : For assurance engagements regarding historical financial information, reasonable assurance engagements are called: a. Review engagements. b. Audit engagements. c. Compilation engagements. d. Agreed-upon procedures engagements

Last Answer : Audit engagements