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AUD - CPA Exam - Engagement Planning Questions with 100% Verified Answers
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AUD - CPA Exam - Engagement Planning Questions with 100% Verified Answers
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AUD - CPA Exam - Engagement PlanningQuestions with 100% Verified Answers
In order to obtain an initial understanding of internal control sufficient to assess
the risk of material misstatement of the financial statements, an auditor would
most likely perform which of the following procedures?
A) Tests of key controls to determine whether they are effective.
B) Expanded substantive testing to identify relevant controls.
C) Analytical procedures to determine the need for specific controls.
D) Risk-assessment procedures to evaluate the design of relevant controls. - ✔
✔ D) Risk-assessment procedures to evaluate the design of relevant controls.
Professional skepticism, when exercised during the consideration of the risk of
misstatement due to fraud
A) Should only be exercised during the planning stage of the audit.
B) Is based on the notion that the client is dishonest.
C) Is an attitude that includes a questioning mind.
,D) Ordinarily includes the use of an outside expert in most audits. - ✔ ✔ C) Is
an attitude that includes a questioning mind.
In a financial statement audit, inherent risk is evaluated to help an auditor
assess which of the following?
A) The internal audit department's objectivity in reporting a material misstatement
of a financial statement assertion it detects to the audit committee.
B) The risk that the internal control system will not detect a material
misstatement of a financial statement assertion.
C) The risk that the audit procedures implemented will not detect a
material misstatement of a financial statement assertion.
D) The susceptibility of a financial statement assertion to a material misstatement
assuming there are no related controls. - ✔ ✔ D) The susceptibility of a
financial statement assertion to a material misstatement assuming there are
no related controls.
Which of the following statements most likely would be included in
an engagement letter from an auditor to a client?
A) The CPA firm will provide absolute assurance about whether the
financial statements are free of material misstatement.
B) The CPA firm is responsible for ensuring that the client complies
with applicable laws.
C) The CPA firm will involve information technology specialists in the
performance of the audit.
,D) The CPA firm will adjust the financial statements to correct misstatements
before issuing a report. - ✔ ✔ C) The CPA firm will involve information
technology specialists in the performance of the audit.
Which of the following is not required when considering fraud in a financial
statement audit?
A) Conduct a continuing assessment of the risks of material misstatement due
to fraud throughout the audit.
B) Conduct an audit team discussion of the risk of material misstatement due to
fraud.
C) Conduct the audit with professional skepticism, which includes an attitude
that assumes balances are incorrect until documented by the auditor.
D) Inquire of the audit committee as to their views about the risks of fraud and
their knowledge of any fraud or suspected fraud. - ✔ ✔ C) Conduct the audit
with professional skepticism, which includes an attitude that assumes balances
are incorrect until documented by the auditor.
Before accepting an engagement to audit a new client that has previously
been audited by another CPA firm, a CPA is required to obtain
A) An assessment of fraud risk factors likely to cause material misstatements.
B) An understanding of the prospective client's industry and business.
C) The prospective client's signature to a written engagement letter.
D) The prospective client's consent to make inquiries of the predecessor. - ✔ ✔
D) The prospective client's consent to make inquiries of the predecessor.
, Which of the following types of services requires independence?
A) Attestation services
B) Accounting and review services
C) Taxation services
D) Consulting services - ✔ ✔ A) Attestation services
It would not be appropriate for the auditor to initiate discussion with the audit
committee concerning
A) The extent to which the work of internal auditors will influence the scope
of the examination.
B) Details of the procedures which the auditor intends to apply.
C) The extent to which change in the company's organization will influence the
scope of the examination.
D) Details of potential problems which the auditor believes might cause a
qualified opinion. - ✔ ✔ B) Details of the procedures which the auditor intends
to apply.
When establishing an understanding with an audit client, that understanding
should be documented
A) Through use of an engagement letter.
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