Auditing Exam Questions with All Correct Answers
Which of the following is not a role of the AICPA?
>Prepare and grade the uniform CPA examination.
>Refine the body of professional knowledge, regulate membership admissions, and police conduct of members.
>License the practices of CP...
Auditing Exam Questions with All
Correct Answers
Which of the following is not a role of the AICPA?
>Prepare and grade the uniform CPA examination.
>Refine the body of professional knowledge, regulate membership admissions, and
police conduct of members.
>License the practices of CPAs in the various states.
>Issue public statements on practice standards. - Answer-License the practices of
CPAS in the various states
Internal auditors perform only operational audits. - Answer-False
The PCAOB assertions made by management in financial statements do not include
>completeness.
>Presentation and disclosure.
>compliance.
>existence. - Answer-Compliance
The lending of credibility to financial information is known as certification. - Answer-
False
Expanded scope governmental auditing includes economy audits, efficiency audits and
program results audits. - Answer-True
One objective of internal auditing is to ultimately assist members of an organization to
perform their work more effectively and efficiently. - Answer-True
The definition of performance audits does not include
economy audits.
program audits.
financial audits.
efficiency audits. - Answer-Financial audits
Financial decision makers demand reliable information that is provided by accountants.
- Answer-True
Which of the following situations would provide auditors with a lower level of detection
risk?
>Evaluating a smaller number of transactions or components of an account balance.
>Relying extensively on verbal inquiry of client personnel in gathering evidence.
, >Examining an account that is more susceptible to misstatement because of complex
calculations and accounting methods.
>Inspecting an item rather than directly confirming the existence of that item with third
parties. - Answer-Inspecting an item rather than directly confirming the existence of that
item with third parties
The auditors' report should either contain an expression of opinion on the financial
statements taken as a whole or an assertion to the effect that an opinion cannot be
expressed. - Answer-True
The concept of due care reflects the need for auditors to plan and perform the audit with
an appropriate level of professional skepticism. - Answer-True
Which of the following is not related to the performance principle of GAAS?
Due care
Sufficient appropriate evidence
Planning and supervision
Risk of material misstatement - Answer-Due care
Considering whether a scope limitation precludes sufficient evidence to allow an opinion
to be expressed on the entity's financial statements.
Performance
Reporting principles
Responsibilities - Answer-Reporting principles
The term "appropriateness" refers to the number of transactions or components of an
account balance examined by auditors. - Answer-False
The purpose of a system of quality control is to provide reasonable assurance that the
firm and its personnel issue reports that are appropriate under the circumstances. -
Answer-True
Issuing a qualified opinion because of a material, yet not pervasive, departure from
GAAP.
Responsibilities
Performance
Reporting - Answer-Reporting
The contents of the auditors' report are guided by the performance principle of GAAS. -
Answer-False
Establishing materiality levels for use in determining the amount of evidence to be
gathered.
Reporting principles
Performance
Responsibilities - Answer-Performance
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