FINAL
The quantity of evidence the auditor obtains is the basis of ______ -appropriateness -sufficiency -reliability -relevance
sufficiency
_______ ______ consists of evaluations of financial information through the examination of plausible relationships among both financial and non-financial data.
Analytical Procedures
Select all that apply: Identify the sources that can be used to develop an auditor's expectation for an analytical procedure: a) the client's prior F/Ss; b) The client's budgets and forecasts; c) Auditing standards; d) Industry publications e) Competitor information
The client's budgets and forecasts Industry publications Competitor information
True or false: A public accounting firm should investigate a prospective client prior to accepting the engagement
True
True or false: Auditors need to understand how management considers risks because many types of risk can impact financial reporting objectives
True
Whether amounts and other data relating to recorded transactions and events have been recorded appropriately is addressed by the ________ assertion. A) occurrence; B) authorization; C) accuracy D) cutoff
accuracy
Select the best answer: The basic framework for the auditor's understanding of audit evidence and its use in supporting the auditor's opinion on the financial statements is (are) ______ a) auditing standards b) management assertions regarding the financial statements; c) generally accepted auditing principles d) generally accepted accounting principles
auditing standards
An audit team generally includes [Select all that apply]: a. an IT analyst; b. a financial analyst; c.one or two seniors; d. a partner; e. a manager; f. staff members
one or two seniors; a partner; a manager; staff members
Auditors are responsible to maintain an attitude of ------- ------- which includes having a questioning mind and a willingness to challenge management's assertions
professional skepticism
Checking the mathematical accuracy of documents or records is referred to as _______.
recalculation
In order for the external auditor to complete an audit of ICFR, management must: a)present documentation of remediation of control deficiencies of last year's audit; b) evaluate the effectiveness of ICFR; c) accept responsibility for the effectiveness of ICFR; and/or d) accept responsibility for preparation of the financial statements
b) evaluate the effectiveness of ICFR; c) accept responsibility for the effectiveness of ICFR; and/or
1. Select all that apply. An auditor's independence would be considered impaired if the ____ ; 1:client owes money to the auditor that has the characteristics of a loan 2: auditor received a casual lunch paid for by the client being audited 3:spouse of the auditor is an accounting supervisor for the entity 4: cousin of the auditor is a maintenance worker for the entity.
client owes money to the auditor that has the characteristics of a loan spouse of the auditor is an accounting supervisor for the entity
Whether all transactions and events that occurred during the period have been recorded relates to the ___________ assertion.
completeness
Fill in two blanks: Failure to meet the ______________ assertion results in an understatement in the related account, while failure to meet the _______ assertion results in an overstatement in the account.
completeness occurrence
Audit evidence obtained by the auditor as a direct written response to the auditor from a third party in paper form or by electronic or other medium is called a(n) ____________.
confirmation
An existing condition or set of circumstances involving uncertainty about a possible loss that will ultimately be resolved when some future event occurs or fails to occur is a(n) ____________ __________.
contingent liability
Pending or threated litigation is an example of a(n) ____________ ______________.
contingent liability
The risk that a material account or disclosure assertion will not be prevented, detected or corrected on a timely basis by the entity's internal control is _____ risk
control
Which of the following statements is correct? a) It is expected that only material misstatements will be corrected; b) The auditor generally requires all proposed adjustments be booked; c) Immaterial misstatements are not communicated to the entity d) It is expected that all known misstatements will be corrected
d) It is expected that all known misstatements will be corrected
The policies and procedures that help ensure that management's directives are carried out and implemented to address risks identified in the risk assessment process are ______ activities. A) fraud; b) risk; c) detection; d) control
d) control
This document is used to record credits for the return of goods in a customer's account or to record allowances that will be issued to the customer: a) remittance advice, b) customer statement, c) write-off authorization d) credit memorandum
d) credit memorandum
The attestation on the effectiveness of ICFR has created benefits especially a) higher cost financial reporting, b) lower cost auditing, c) reduced emphasis on corporate governance d) higher-quality financial reporting
d) higher-quality financial reporting
The risk that audit procedures will not detect in the statement that exists is known as the ----- risk
detection
If inherent and control risks are high, in order to achieve the planned level of audit risk, the auditor will set a lower level of ------ -------.
detection risk
Understand the client continuance process. Select all that apply. A public accounting firm may disassociate itself from an auditing client due to ______ manufacturing issues; accounting issues; corporate social responsibility issues; disputes over fees; auditing issues
disputes over fees auditing issues accounting issues
Although some control can be exercised through the careful acceptance and continuance of clients, --------_ risk cannot be directly controlled by the auditor.
engagement
1. True or false: The extent of effort that goes into evaluating a new client is normally much less than the decision to continue with an existing client.
false
The auditor's verification of financial reports reduces ___ ___ which is the chance that data circulated by a company's management will be false or misleading
info risk
The fact that the manager generally has more information about the "true" financial position and results of operations of the entity than does the absentee owner is called-------
information asymmetry
Tests of controls are performed to ______. a. increase the audit fees charged to the client, B. determine the type of audit opinion to issue, c. test the operating effectiveness of controls, d. comply with accounting standards
test the operating effectiveness of controls
Tests of details are usually categorized into ______. (Answer all that apply) a. tests of details of account balances and disclosures, b. tests of internal controls c. tests of financial statement accuracy, d. substantive test of transactions
tests of details of account balances and disclosures substantive test of transaction
The settlement of a lawsuit after the balance sheet date but before the financial statements are issued for an amount different from the amount recorded in the year-end financial statements is considered a Type ______ subsequent event
1
When a significant event occurs that may be of interest to investors, the SEC requires a publicly traded company to file a(n) 1:10K 2:10Q, 3:8K 4:8Q
8K
Any matters arising from the audit of financial statements that are communicated or required to be communicated, to the audit committee, that relate to material financial statement accounts or disclosures and involved especially challenging, subjective, or complex auditor judgment are called ___________ ________________ _______________ Part 2) Provide two examples of these 'matters':
Critical audit matters Part 2) i. IT Systems & Controls issues [from EarthWear] ii. Fair value of [certain assets] iii. long-lived asset impairment analyses iv. right-of-use assets v. reserve for customer concerns vi. ...... many other possibilities
True or false: At the completion of the audit, the actual or achieved level of audit risk is known with certainty by the auditor.
False
True or false: Auditors of publicly traded companies must issue a report that accepts responsibility for establishing and maintaining adequate ICFR
False
Which of the following usually serves as the basis for evaluating management's assertions in the context of a financial statement audit? - Generally Accepted Accounting Principles (GAAP) - Generally Accepted Auditing Standards
Generally Accepted Accounting Principles (GAAP
A significant aspect of most audit engagements is the use of a(n) ______ specialist. a. IT; b. environmental; c. legal d. valuation or e. tax
IT
Which of the following three conditions are generally present when material misstatements due to fraud occur?
Opportunity Rationalization Incentive
Auditors consider materiality from a reasonable user perspective and communicate to users that "the financial statements present fairly in ______ material respects. a. all; b. no; c. most; d. some
all
Evaluations of financial information made through the study of plausible relationships among both financial and non-financial data are referred to as ________ ________. [2 words]
analytical procedures
The context provided by the entity's business --------- the nature of the audit 1) greatly impacts, 2) has no impact on 3) has limited impact on
greatly impacts
A very small difference that is unlikely to affect an investor's decisions in a significant manner is deemed to be an ------ audit risk - immaterial - material
immaterial
The nature, timing and extent of audit procedures used to collect audit evidence is most influenced by the ______ - audit fee -board of directors - materiality assessment - Financial Accounting Standards Board
materiality assessment
In documenting the overall audit strategy and audit plan, auditors should document the ______. a. outcomes of prior audit tests, b. extent of audit tests c. timing of audit tests, d. nature of audit tests, e. prior audit fees
nature of audit tests extent of audit tests timing of audit tests
When the auditor intends to depend on the entity's controls, a(n) -------strategy is chosen. Part 2) How does this strategic decision affect the mix of types of audit procedures?
reliance Part 2 answer) More test of controls are planned
The independent execution by the auditor of procedures or controls that were originally performed by company personnel is called a) recalculation; b) confirmation; c) observation d) reperformance.
reperformance
If inherent and control risks are high, in order to achieve the planned level of audit risk, the auditor will __---___ level of detection risk.
set a lower
The nature and extent of planning activities that are necessary depend on the ______ the entity -compensation to be received from; -complexity of; -auditor's previous experience with; -size of. -market value of;
size of auditor's previous experience with complexity of
When the audit has been performed in accordance with applicable auditing standards, the auditor has gathered sufficient evidence, and the auditor believes that the financial statements conform to GAAP a(n) _-------------____-_------------___ financial statement audit report is issued.
standard____-__unqualified
Transactions that occur after the balance sheet date but before the issuance of the financial statements are called ______________ ______________.
subsequent events
When an auditor decides to follow a(n) ______________ strategy, little work is done on understanding specific control activities.
substantive
In establishing an understanding about the terms of the engagement with potential clients, ______ should be discussed. - the type of opinion the audit firm expects to issue; -the engagement letter; - using the work of internal auditors; -the role of the client's audit committee
using the work of internal auditors the engagement letter the role of the client's audit committee
Select all that apply: The accounts commonly affected by sales transactions are ______. a) Allowance for uncollectible accounts; b) Sales returns and allowances; c) Sales; d) Trade accounts receivable and/or Bad-debt expense
a) Allowance for uncollectible accounts c) Sales d) Trade accounts receivable and/or Bad-debt expense
Because both F/S audits and ICFR audits each provide evidence relevant to each other, the auditor must integrate the audits of a) ICFR; b) the Board of Directors' minutes; c) compliance with state wage laws and/or d) the financial statements.
a) ICFR; d) the financial statements.
Misstatements in the entity's records are corrected with ______ entries
adjusting
The measure of the quantity of audit evidence is referred to as ____________
Sufficiency
The susceptibility of an assertion in an account or disclosure to a misstatement due to error or fraud that could be material is known as _____ risk.
inherent
The risk that the relevant assertions related to the account balances or disclosures contain misstatements that could be material to the financial statements consists of ---- and ----risk.
inherent control
Select all that apply: The PCAOB states that, as a part of understanding the entity, auditors should consider --- a obtaining information about significant unusual developments regarding trading activity in the company's securities; b. obtaining an understanding of compensation arrangements with senior management c. performing a study of government policies that impact the entity d. reading relevant public information about the company
obtaining information about significant unusual developments regarding trading activity in the company's securities obtaining an understanding of compensation arrangements with senior management reading relevant public information about the company
Best Answer Question: An auditor makes inquiries of an entity's customers and discovers the customers received large quantities of unordered products just before year-end. This is an indicator of.... a) overstated revenues; b) understated liabilities; c) overstated liabilities d) understated revenues
overstated revenues
Who is responsible for the fair presentation of the financial statements? a) Board of Directors; b) Management; c) Internal auditors d) External auditors
Management
True or false: When the auditor is evaluating the effects of detected misstatements in the financial statements, the auditor must consider both quantitative and qualitative aspects of the account and transaction involved
True
The ______ assertion relates to whether all recorded transactions and events have happened and pertain to the entity . A) occurrence; B) accuracy; C) completeness d) authorization
occurrence
Multiple Select Question, Select all that apply. Factors that affect the reliability of evidence include a) the format of the evidence; b) whether it is obtained internally or externally c) the effectiveness of the entity's internal controls; d) whether the evidence comes from a manager or an employee.
whether it is obtained internally or externally the effectiveness of the entity's internal controls; whether the evidence comes from a manager or an employee.
Specific acts performed by the auditor to gather evidence about whether specific assertions are being met are referred to as _________ __________.
Audit procedures
The risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated is known as ______ -----
Audit-Risk
A "clean" opinion is also called a(n) ______ opinion. : a) unqualified; b) unmodified; c) qualified and/or d) modified
a) unqualified; b) unmodified;
True or false: An entity's mix of manual and automated controls varies with the nature and complexity of the entity's use of IT.
True
1. Select all that apply. Generally, the three preliminary engagement activities are ______; Multiple select question: 1: documenting prior audit opinions that have been issued to the client 2: determining the audit engagement team requirements 3: ensuring the audit team and firm are in compliance with ethical and independence requirements 4: charging clients for preliminary audit work completed 5: establishing an understanding with the entity
- determining the audit engagement team requirements - ensuring the audit team and firm are in compliance with ethical and independence requirements - establishing an understanding with the entity
Which of the following statements are correct? A) Goods should not be shipped without proper authorization.; b) The shipping function is responsible for ensuring orders are filled correctly; c) The shipping function is responsible for ensuring customers are billed for orders; d) Goods should not be shipped until they are paid for in full.
A) Goods should not be shipped without proper authorization b) The shipping function is responsible for ensuring orders are filled correctly
Which of the following statements are correct? A) The auditor should understand the control procedures used by the entity to provide financial statement assurance; b) Understanding the information system requires knowing how IT is involved in data processing and/or c) The auditor must learn about each business process that affects all account balances in the financial statements
A) The auditor should understand the control procedures used by the entity to provide financial statement assurance; b) Understanding the information system requires knowing how IT is involved in data processing and/or
According to FASB, in order to recognize revenue an entity must ______. A) transfer a good or service to a customer; b) receive payment for the transferred good or service; c) create a contract with a customer to provide a good or service and/or d) satisfy a performance obligation
A) transfer a good or service to a customer d) satisfy a performance obligation
In the CAM section of the audit report, a paragraph or table must a) refer to financial statement accounts and disclosures related to the CAM; b) explain how each matter was determined to be a CAM ; c) describe how each CAM was addressed in the audit and/or d) name the audit partner who assessed CAM
A. refer to financial statement accounts and disclosures related to the CAMB. B. explain how each matter was determined to be a CAMC. C. describe how each CAM was addressed in the audit
True or false: The entity's balance sheet date is December 31, 2016, the date of the auditor's report is February 8, 2017, and the financial statements are issued on March 2, 2017. The auditor is not responsible for making any inquiry
True
Auditing and attestation are specialized forms of the general category of --------- services
Assurance
In identifying CAMS, auditors must take into account a) the nature and timing of significant unusual transactions; b) degree of auditor judgment related to areas that involved significant management judgment and/or c) management's assessment of significant risks of material misstatement.
B. degree of auditor judgment related to areas that involved significant management judgment A. the nature and timing of significant unusual transaction transactions
This assertion relates to whether transactions and events have been recorded in the correct accounting period: A) Existence; B)Accuracy; C)Authorization D)Cutoff
Cutoff
True or false: Consideration of audit risk at the financial statement level is referred to by the term assertion.
False
True or false: In planning an integrated audit, the auditor should design separate tests of controls to accomplish the objectives of the audit of ICFR and the audit of financial statements.
False
True or false: The auditor's opinions on the financial statements and on the effectiveness of internal control must be presented in two separate reports with the same dates.
False
The SOX Act of 2002 transferred authority for standard setting, inspection, investigation and enforcement for public company audits from the profession to the 1) National Association of State Boards of Accounting (NASBA), 2) American Accounting Association (AAA), 3) American Institute of CPAs (AICPA) 4) Public Company Accounting Oversight Board (PCAOB)
Public Company Accounting Oversight Board (PCAOB)
As it relates to the external financial reporting objective, the entity's __________- ___________ process should consider internal and external events and circumstances that may arise and adversely affect the entity's ability to initiate, authorize, record, process and report financial data consistent with management's financial statement assertions
Risk assessment
The auditor's exercise of professional judgment to review accounting data to identify significant or unusual items to test is often referred to as ___________.
Scanning
When the audit has been performed in accordance with applicable auditing standards, the auditor has gathered sufficient evidence, and the auditor believes that the financial statements conform to GAAP a(n) _____________-_____________ financial statement audit report is issued.
Standard unqualified
When the auditor has decided not to rely on the entity's controls and instead use procedures as the main source of evidence about the assertions in the financial statements, the auditor will choose a(n) --------- audit strategy.
Substantive
Best choice question: An important step in the analytical procedures decision process is to define a a) material difference, b) a tolerable difference, c) a significant difference.
a significant difference.
Which of the following statements are correct? a) Lack of management review is one of the primary sources of internal control weakness; b) The cost of internal controls should not exceed the benefits derived, c) The internal control system should be designed to provide absolute assurance that objectives are being achieved.
a) Lack of management review is one of the primary sources of internal control weakness; b) The cost of internal controls should not exceed the benefits derived,
Identify the fraud risk factors that organizations must consider in assessing risks to the achievement of objectives. a) Opportunities; b) Morality; c) Incentives; d) Rationalization e) Threats
a) Opportunities c) Incentives; d) Rationalization
An auditor is reviewing tax returns and the minutes of the board of directors meetings. The auditor is most likely trying to a) identify contingent liabilities; b) quantify (measure) the amount of a note payable; c) ascertain if notes payable should be classified as short-term or long-term d) determine if title has passed for the purchase of goods.
a) identify contingent liabilities;
The auditor assesses the entity's ability to continue as a going concern ______.: a) near the end of the engagement; b) after the archival period for working papers; c) during the planning of the engagement; and/or d) throughout the testing phases of the engagement
a) near the end of the engagement; c) during the planning of the engagement; and/or
: A customer sales order typically contains ______. a) quantity of items ordered; b) credit approval; c) availability of inventory and/or D) type of products ordered
a) quantity of items ordered D) type of products ordered
Select all that apply: A "clean" opinion is also called a(n) a) unqualified; b) unmodified; c) qualified and/or d) modified opinion. PART 2) State the two overall [these apply to the overall financial statements]MANAGEMENT ASSERTIONS that the client management is making [asserting] that the audit opinion is 'opining' on:
a) unqualified; b) unmodified; Part 2) i) The F/Ss are fairly stated, are fairly presented ii) Our company maintained effective ICoFR
When business owners hire others to manage their business, the demand for auditing can be understood as the need for-------
accountability
Independent professional services that improve the quality of information, or its context, for decision makers are called -------services -attest -assurance -audit services
assurance
: Final analytical procedures provide a "smell test". Which of the following explains the meaning of this phrase?: a) Are internal controls operating effectively?; b) Do the financial statement amounts make sense?; c) Were any errors made by the entity during the period under audit? d) Where should audit effort and attention be focused
b) Do the financial statement amounts make sense?;
Multiple selection question: Which of the following conditions are generally present when material misstatements due to fraud occur? A) Integrity; b) Opportunity c) Greed d) Optimism
b) Opportunity
Which of the following statements are correct? A) In most systems the revenue process does not interact with the inventory management process.; b) The revenue process is similar for all types of organizations.; and/or c) Many accounting systems integrate purchasing and human resources with revenue.
b) The revenue process is similar for all types of organizations c) Many accounting systems integrate purchasing and human resources with revenue
: To provide reasonable assurance concerning the financial reporting system, a control system, ______ a) must prevent all large errors from occurring; b) allow for a remote likelihood of material misstatement; c) must prevent fraud and most material misstatements d) must not allow any material misstatements
b) allow for a remote likelihood of material misstatement;
: An auditor has read the minutes of board of directors meetings, inquired of legal counsel regarding litigation, read the interim financial statements, and made inquiries of management. The auditor is most likely a) determining whether to issue a qualified or unqualified opinion; b) performing the analytical procedures required during the final review stage of the audit; c) performing audit procedures for subsequent events d) determining whether to dual-date the audit report.
b) performing the analytical procedures required during the final review stage of the audit;
According to auditing standards, analytical procedures are required during the a) substantive testing; b) planning; c) control testing and/or d) final review stages of an audit.
b) planning; d) final review stages of an audit
According to auditing standards, analytical procedures are required during the ______ stages of an audit: a) field work; b) planning; c) interim; and/or d) final review
b) planning; d) final review
An effective internal control system provides ______ assurance that the risk of not achieving an entity objective is reduced to an acceptable level. A) minimal; b) reasonable; c) absolute d) no assurance Part 2) With respect to internal control evaluation, what does '_reasonable__________ assurance' mean?
b) reasonable Part 2) REASONABLE__ assurance means: A sensible, appropriate, suitable BUT NOT ABSOLUTE level of assurance. Thus there is some possibility [some risk] that the risk of not achieving an entity objective is NOT reduced to an acceptable level
When a contingent liability exists, the likelihood that the future event will result in a loss is assessed using the categories: a) reasonably possible; b) remote; c) probable and/or d) reasonably probable
b) remote; c) probable and/or d) reasonably probable
Setting an audit strategy ??? ' A) helps the auditor determine how to evaluate internal controls; b) requires a detailed understanding of the entity's internal controls c) should be done based upon the scope of the engagement
b) requires a detailed understanding of the entity's internal controls
1.Select all that apply: Types of transactions typically processed through the revenue process are the ______. a) issuance of goods to the customer from the warehouse; b) return of goods by the customer for credit or cash, c) receipt of cash from the customer in payment for the goods or services d); sale of goods or rendering of a service for cash or credit and/or e) receipt of goods for resale from the supplier
b) return of goods by the customer for credit or cash c) receipt of cash from the customer in payment for the goods or services d); sale of goods or rendering of a service for cash or credit
Revenue recognition poses a(n) ______ audit risk to auditors. a) insignificant; b) significant c) medium
b) significant
Auditors can reduce audit risk related to account balances such as net sales by? a. consulting with top-level management; b. using the internal audit function as part of the audit team; c. increasing the amount charged for performing the audit d. obtaining an understanding of the entity and its environment
b. using the internal audit function as part of the audit team;
These provide a diagrammatic representation of the entity's accounting system: a) Organizational Charts; b) Procedures Manuals; c) Flowcharts; d) Internal Control Questionnaires
c) Flowcharts;
: Which of the following items that occurred after the balance sheet date but prior to issuance of the financial statements are considered Type II subsequent events? a) A capital stock or bond issuance, b) The settlement of a lawsuit for an amount different from the amount recorded in the year-end financial statements, c) Purchase or disposal of a business by the entity and/or d) Losses on receivables caused by conditions arising such as a business failure
c) Purchase or disposal of a business by the entity and/or d) Losses on receivables caused by conditions arising such as a business failure a) A capital stock or bond issuance,
If properly designed, ______ controls should operate more consistently and are not typically subject to human errors or mistakes in its application. A) manual, b) risk assessment, c) automated D) Detection
c) automated
If, during the planning, performance or completion of the audit there is substantial doubt about the entity's ability to continue as a going concern, the next step for the auditor is to ______. a) prepare the explanatory paragraph used in the audit report; b) prepare the footnotes to the financial statements explaining the going concern problems and management's response; c) obtain management's plan to mitigate the going concern problem d) withdraw from the engagement and disclaim an opinion
c) obtain management's plan to mitigate the going concern problem
: An auditor has read the minutes of board of directors meetings, inquired of legal counsel regarding litigation, read the interim financial statements, and made inquiries of management. The auditor is most likely a) determining whether to issue a qualified or unqualified opinion; b) performing the analytical procedures required during the final review stage of the audit; c) performing audit procedures for subsequent events d) determining whether to dual-date the audit report
c) performing audit procedures for subsequent events
A Type I subsequent event a) provides evidence about conditions that did not exist at the balance sheet date; b) is usually accounted for by disclosure in the notes to the financial statements c) requires adjustment of the numbers in the financial statements
c) requires adjustment of the numbers in the financial statements
The initial function in the revenue process is ______ a) shipping; b) credit authorization; c) sales order entry d)billing
c) sales order entry
Select all that apply: The open-order report should be reviewed daily or weekly, and old orders should be investigated to determine ______. a) the value of items in inventory; b) inventory turnover time; c) why orders have not been filled and/or d) if any goods have been shipped but not billed
c) why orders have not been filled d) if any goods have been shipped but not billed
Whether transactions and events have been recorded in the proper accounts is the concern of the _____________ assertion.
calssification
Identify the different organizational forms of public accounting firms. Public accounting firms can be organized as ______. a. corporations, b. proprietorships; c. limited liability partnerships; d. nonprofit firms; e. general partnerships
corporations, proprietorships; limited liability partnerships, general partnerships
Management's documentation of ICFR ______ a) must be in hard copy form; b) must be in electronic form; c) must be in machine readable format; d) may exist in any form
d) may exist in any form
A material weakness in the financial reporting system is a deficiency or combination of deficiencies in ICFR such that there is a(n) ______ possibility that a material financial statement misstatement will not be prevented or detected on a timely basis: a) remote; b) absolute; c) significant d) reasonable.
d) reasonable.
To identify significant accounts and disclosures and their relevant assertions, the auditor assesses risk factors including: a) account size and composition; b) target earnings per share c) range of values; d) susceptibility to misstatement and/or e) nature of the disclosure
e) nature of the disclosure a) account size and composition; d) susceptibility to misstatement and/or
True or false: If the amount of difference between the auditor's expectation and the recorded amount exceeds the auditor's tolerable difference, the auditor accepts the account.
false
Looking at a process or procedure being performed by others is referred to as ________.
observation
Auditor risk assessment procedures are used to ______. a. determine whether or not to accept a client, b. determine the type of opinion to issue, c. obtain an understanding of the entity and its environment, d. set audit fees
obtain an understanding of the entity and its environment
Whether transaction and events are appropriately aggregated or disaggregated and clearly described in the financial statements is addressed by the ________ assertion.
presentation
Management establishes controls to ensure that sales and collection transactions are appropriately handled as part of the--------business process (cycle)? 1) revenue, 2) inventory management, 3) financing 4) purchasing
revenue
Select all that apply. When a substantive analytical procedure is used as the principal substantive procedure for a significant financial statement assertion, the auditor should document: a) the expectation and how it was developed; b) any additional auditing procedures performed in response to significant differences identified; c) results of comparisons between the entity and industry competitors; d) results of the comparison of the expectation to the recorded amounts.
the expectation and how it was developed; any additional auditing procedures performed in response to significant differences identified; results of the comparison of the expectation to the recorded amounts.
1. Select all that apply. Factors that should be considered when determining the staffing requirements for an audit include ______; 1:timing of the work; 2:engagement complexity 3: level of certainty 4: engagement size 5: personnel availability
timing of the work personnel availability engagement complexity engagement size
