Flashcards in Monday Quiz Deck (22):
In the first audit of a new client, an auditor was able to extend auditing procedures to gather sufficient evidence about consistency. Under these circumstances the auditor should...
Not refer to consistency in the auditor's report
A registered statement filed with the SEC contains the reports of two independent auditors on their audits of financial statements for different periods. The predecessor auditor who audited the prior period financial statements generally should obtain a letter of representation from the...
Successor independent auditor
When financial statements contain a departure from GAAP because, due to unusual circumstances, the statements would otherwise be misleading, the auditor should explain the unusual circumstances in a separate paragraph and express an opinion that is...
An auditor is testing the reasonableness of dividend income from investments in publicly held companies. The auditor most likely would compute the amount that should have been received and recorded by the client by...
Electronically accessing the details of dividend records on the
According to the standards of the profession, which of the following activities would most likely not impair a CPA's independence?
Providing extensive advisory services for a client
Which of the following is a prospective financial statement for general use upon which an accountant may appropriately report?
An auditor makes separate compliance and substantive tests in the accounts payable area which has good internal control. If the auditor uses statistical sampling for both of these tests, the confidence level established for the substantive tests is normally...
Less than that for tests of compliance
Before reissuing the prior year's auditor's report on the financial statements of a former client, the predecessor auditor should obtain a letter of representation from the...
Which of the following factors is most likely to affect the extent of the documentation of the auditor's understanding of a client's system of internal controls?
The degree to which information technology is used in the
If a registered public accounting firm is in violation of any rule or regulation of the SEC or PCAOB...
They may not prepare or issue any audit report with respect to
Resolution of deficiencies, including management's response to known deficiencies and audit findings, is a control activity that does not impact...
An auditor's consideration of the effect of IT on internal control
Which of the following information that comes to an auditor's attention most likely would raise a question about the occurrence of illegal acts?
Discovery of unexplained payments made to government
A member of a group engagement team will not be subject to discipline if a foreign component auditor departed from the ethics requirement as long as the foreign component auditor is...
In accord with ethics and independence requirements set forth
In the IESBA's Code of Ethics for Professional Accountants
Under which set of standards does an audit report not allow reference to another audit firm involved in a portion of the audit?
International Standards on Auditing (ISAs)
When an accountant is engaged to compile a nonissuer's financial statements that omit substantially all disclosures with no reference to basis but are otherwise in conformity with another comprehensive basis of accounting, the accountant should disclose in his report that the...
Financial statements were prepared in conformity with a comprehensive basis of accounting other than GAAP
Materiality levels are generally considered in terms of the...
Smallest aggregate level of misstatement that could be considered material to any one of the financial statements
What activity would detect whether payroll data was altered during processing?
Use test data to verify the performance of edit routines
A summary of all uncorrected misstatements related to known and likely misstatements would not be used in evaluating...
The overall effect of audit findings on the auditor's report
When an auditor is asked to report on the fair presentation of financial statements of a regulated entity that are prepared in accordance with a basis of accounting prescribed by a regulatory agency, the auditor's report should include...2
1 a standard audit report modified as appropriate because of departures from GAAP and
2 in an additional paragraph express an opinion on whether FS are presented in conformity with the regulatory basis
Which of the following procedures concerning accounts receivable would an auditor most likely perform to obtain audit evidence in support of an assessed level of control risk below the maximum level?
Observing an entity's employee prepare the schedule of past due accounts receivable
If a client will not permit inquiry of outside legal counsel, the auditor's report ordinarily will contain...
A disclaimer of opinion