Recent questions tagged auditing

In performing a financial statement audit, which of the following would an auditor least likely consider? a. Internal control. b. Compliance with GAAP. c. Fairness of the financial statement amounts. d. Quality of management’s business decisions.

Description : In performing a financial statement audit, which of the following would an auditor least likely consider? a. Internal control. b. Compliance with GAAP. c. Fairness of the financial statement amounts. d. Quality of management’s business decisions.

Last Answer : Quality of management’s business decisions.

Management assertions are a. Stated in the footnotes to the financial statements. b. Provided to the auditor in the assertions letter, but are not disclosed in the financial statements of the entity. c. Implied or express representations about the accounts in the financial statements. d. Explicitly expressed representations about the financial statements

Description : Management assertions are a. Stated in the footnotes to the financial statements. b. Provided to the auditor in the assertions letter, but are not disclosed in the financial ... the accounts in the financial statements. d. Explicitly expressed representations about the financial statements

Last Answer : Implied or express representations about the accounts in the financial statements.

To raise the standards of the profession, the Philippine Accountancy Act of 2004 requires that the CPA profession be integrated under the rules to be established by a. The PICPA. b. The Board of Accountancy. c. The Professional Regulation Commission. d. The Government Association of CPAs.

Description : To raise the standards of the profession, the Philippine Accountancy Act of 2004 requires that the CPA profession be integrated under the rules to be established by a. The PICPA. b. The Board of Accountancy. c. The Professional Regulation Commission. d. The Government Association of CPAs.

Last Answer : The Professional Regulation Commission

Which of the following is not one of the concepts in the framework of auditing theory? a. Evidence b. Ethical conduct c. Fair presentation d. Conflict of interest

Description : Which of the following is not one of the concepts in the framework of auditing theory? a. Evidence b. Ethical conduct c. Fair presentation d. Conflict of interest

Last Answer : Conflict of interest

Which of the following is least likely an application of maintaining an attitude of professional skepticism? a. The auditor is alert to audit evidence that contradicts or brings into question the reliability of documents or management representations. b. In planning and performing an audit, the auditor assumes that management is dishonest. c. The auditor makes a critical assessment, with a questioning mind, of the validity of audit evidence obtained. d. The auditor does not consider representations from management as substitute for obtaining sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion.

Description : Which of the following is least likely an application of maintaining an attitude of professional skepticism? a. The auditor is alert to audit evidence that contradicts or brings into question the ... audit evidence to be able to draw reasonable conclusions on which to base the audit opinion.

Last Answer : In planning and performing an audit, the auditor assumes that management is dishonest.

It is essential that users regard CPA firms as: a. Competent. b. Unbiased. c. Technically proficient. d. All of the above

Description : It is essential that users regard CPA firms as: a. Competent. b. Unbiased. c. Technically proficient. d. All of the above

Last Answer : All of the above

Which of the following best describes the primary purpose of audit procedures? a. To detect errors or fraud b. To comply with generally accounting principles c. To gather sufficient, appropriate evidence d. To verify the accuracy of account balances

Description : Which of the following best describes the primary purpose of audit procedures? a. To detect errors or fraud b. To comply with generally accounting principles c. To gather sufficient, appropriate evidence d. To verify the accuracy of account balances

Last Answer : To gather sufficient, appropriate evidence

Which of the following methods is most commonly used to reduce information risk? a. Allow users to verify information. b. Allow all users to prepare the statements. c. Users share information risk with management. d. Have the financial statements audited

Description : Which of the following methods is most commonly used to reduce information risk? a. Allow users to verify information. b. Allow all users to prepare the statements. c. Users share information risk with management. d. Have the financial statements audited

Last Answer : Have the financial statements audited

An audit designed to determine the extent to which the desired results of an activity established by the legislative or other authorizing body are being achieved. a. Economy audit b. Efficiency audit c. Program results audit d. Financial-related audit

Description : An audit designed to determine the extent to which the desired results of an activity established by the legislative or other authorizing body are being achieved. a. Economy audit b. Efficiency audit c. Program results audit d. Financial-related audit

Last Answer : Program results audit

An audit of financial statements is conducted to determine if the a. Organization is operating efficiently and effectively b. Client's internal control is functioning as intended. c. Auditee is following specific procedures or rules set down by some higher authority d. Overall financial statements are stated in accordance with an identified financial reporting framework

Description : An audit of financial statements is conducted to determine if the a. Organization is operating efficiently and effectively b. Client's internal control is functioning as intended. c. ... d. Overall financial statements are stated in accordance with an identified financial reporting framework

Last Answer : Overall financial statements are stated in accordance with an identified financial reporting framework

Users of financial statements demand independent audit because a. Users demand assurance that fraud does not exist. b. Management may not be objective in reporting. c. Users expect auditors to correct management errors. d. Management relies on the auditor to improve internal control.

Description : Users of financial statements demand independent audit because a. Users demand assurance that fraud does not exist. b. Management may not be objective in reporting. c. Users expect auditors to correct management errors. d. Management relies on the auditor to improve internal control.

Last Answer : Management may not be objective in reporting

Which of the following best describes due care? a. Reasonable infallibility b. Tact in avoiding legal liability c. Requisite skill and diligence d. Freedom from undue influence

Description : Which of the following best describes due care? a. Reasonable infallibility b. Tact in avoiding legal liability c. Requisite skill and diligence d. Freedom from undue influence

Last Answer : Requisite skill and diligence

It refers to the attribute or quality of audit evidence. a. Sufficiency b. Relevance c. Reliability d. Appropriateness

Description : It refers to the attribute or quality of audit evidence. a. Sufficiency b. Relevance c. Reliability d. Appropriateness

Last Answer : Appropriateness

On every audit engagement, the CPA should comply with applicable PSAs a. Without exception. b. Except in examinations that result in a qualified reportc. Except in examinations of interim financial statements. d. Except in circumstances where the CPA is associated with unaudited financial statements.

Description : On every audit engagement, the CPA should comply with applicable PSAs a. Without exception. b. Except in examinations that result in a qualified report. c. Except in examinations of ... financial statements. d. Except in circumstances where the CPA is associated with unaudited financial statements

Last Answer : Without exception

The assumption underlying an audit of financial statements is that they will be used by a. Different groups for different purposes. b. The general public in making investment decisions. c. The board of directors as basis of declaring cash dividends. d. The regulatory agencies to verify information that is relevant to their supervisory functions.

Description : The assumption underlying an audit of financial statements is that they will be used by a. Different groups for different purposes. b. The general public in making investment decisions. c ... dividends. d. The regulatory agencies to verify information that is relevant to their supervisory functions.

Last Answer : Different groups for different purposes.

An auditor should not render a report on: a. Client internal control. b. Management performance. c. The achievability of forecasts. d. Quarterly financial information.

Description : An auditor should not render a report on: a. Client internal control. b. Management performance. c. The achievability of forecasts. d. Quarterly financial information.

Last Answer : The achievability of forecasts.

Independent auditing can best be described as a a. Subset or branch of accounting. b. Professional activity that measures and communicates financial accounting data. c. A discipline or professional activity that attests to the fair presentation of financial statements. d. Regulatory activity that prevents the issuance of improper financial information

Description : Independent auditing can best be described as a a. Subset or branch of accounting. b. Professional activity that measures and communicates financial accounting data. c. A discipline or ... of financial statements. d. Regulatory activity that prevents the issuance of improper financial information

Last Answer : A discipline or professional activity that attests to the fair presentation of financial statements.

Which of the following engagements is covered by the Framework for Assurance Engagements? a. Consulting engagements b. Preparation of tax returns c. Independent financial statements audit d. Agreed-upon procedures

Description : Which of the following engagements is covered by the Framework for Assurance Engagements? a. Consulting engagements b. Preparation of tax returns c. Independent financial statements audit d. Agreed-upon procedures

Last Answer : Independent financial statements audit

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