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Flashcards in Friday Quiz Deck (17):
0

Conditions that require extension of audit tests would also be...

Considered in the planning stage of an audit engagement

1

The practitioner's report on agreed upon procedures on an entity's compliance with specified requirements should include...

Identification of the responsible party

2

A auditor most likely would review an entity's periodic accounting for the numerical sequence of shipping documents and invoices to support management's financial statement assertion of...

Completeness

3

When assessing internal auditors' objectivity, an independent auditor should...

Consider the policies that prohibit the internal auditors from auditing areas where they were recently assigned

4

An enterprise engaged a CPA to audit its financial statements in accordance with Government Auditing Standards (Yellow book) because of provisions of government grant funding agreements. Under these circumstances, the CPA is required to report on the enterprise's internal controls either in the report on the financial statements or in...

A separate report

5

What is a control an entity would most likely use to assist in satisfying the completeness assertion related to long term investments?

The internal auditor compares the securities in the bank safe
deposit box with recorded investments

6

When communicating internal control related matters noted in an audit, an auditor's report issued on significant deficiencies should indicate that the...

Purpose of the auditor was to report on the financial statements
and not to provide assurance on internal control

7

In reporting on an entity's internal control over financial reporting, a practitioner should include a paragraph that describes the...

Inherent limitations of any internal control

8

What audit procedures would provide the most reliable evidence concerning the entity's assertion of rights and obligations related to inventories?

Inspect agreements to determine whether any inventory is
pledged as collateral or subject to any liens

9

In reviewing the financial statements of a nonissuer, an accountant is required to modify the standard review report for which of the following matters?
1 inability to assess the risk of material misstatement due to fraud
2 discovery of significant deficiencies in the design of the entity's internal control

Neither

10

When an auditor does not receive replies to positive requests for year end accounts receivable confirmations, the auditor most likely would...

Ask client to contact the customers to request that the
confirmations be returned

11

A successor auditor most likely would make specific inquiries of the predecessor auditor regarding...

Disagreements with management about auditing procedures

12

Which of the following procedures would an auditor most likely perform to obtain assurance that slow moving and obsolete items included in inventories are properly identified?

Examining an analysis of inventory turnover

13

When an auditor plans to rely on controls that have changed since they were last tested, which of the following courses of action would be most appropriate?

Test the operating effectiveness of such controls in the current
Audit

14

Whether IT controls are automated or manual in nature would...

Not be considered by auditor in reviewing the extent and nature
Of the risks to internal controls associated with IT

15

When testing journal entries, the auditor should focus on journal entries:
1 made during the end of a reporting period, as fraudulent entries are made during that time.
2 made throughout the reporting period, as material misstatements are made during that time.

Both

16

Management philosophy and operating style most likely would have a significant influence on the entity's control environment when...

Management is dominated by one individual