DeVry ACCT 591 Quiz 3 latest

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DeVry ACCT 591 Quiz 3 latest

Quiz 3

Question 1.1. (TCO A) (CPA-05360.B) Prior to commencing field work, an auditor usually discusses the general audit strategy with the client’s management. Which of the following details do management and the auditor usually agree upon at this time? (Points : 10)

The specific matters to be included in the communication with those charged with governance.

The minimum amount of misstatements that may be considered to be significant deficiencies in internal control.

The schedules and analyses that the client’s staff should prepare.

The effects that inadequate controls may have over the safeguarding of assets.

Question 2.2. (TCO A) (CPA-06834.B) Under PCAOB standards, which one of the following would not be considered by the auditor when determining the procedures to perform to obtain an understanding of the nature of the company? (Points : 10)

Become an investor of the company in order to get access to the same information that other investors would have.

Read public information about the company relevant to the evaluation of the likelihood of material financial statement misstatement and the effectiveness of the company’s internal control over financial reporting.

Obtain information from SEC filings and other sources about trading activity in the company’s securities and holdings of significant shareholders.

Observe or read transcripts of earnings calls and other publicly available meetings with investors and ratings agencies.

Question 3.3. (TCO A) (CPA-02803.B) Which of the following is required documentation in an audit in accordance with generally accepted auditing standards? (Points : 10)

A flowchart or narrative of the information system relevant to financial reporting describing the recording and classification of transactions for financial reporting.

An audit plan setting forth in detail the procedures necessary to accomplish the engagement’s objectives.

A planning memorandum establishing the timing of the audit procedures and coordinating the assistance of entity personnel.

An internal control questionnaire identifying controls that assure specific objectives will be achieved.

Question 4.4. (TCO A) (CPA-05716.B) In a financial statement audit, inherent risk is evaluated to help an auditor assess which of the following? (Points : 10)

The internal audit department’s objectivity in reporting a material misstatement of a financial statement assertion it detects to the audit committee.

The risk that the internal control system will not detect a material misstatement of a financial statement assertion.

The risk that the audit procedures implemented will not detect a material misstatement of a financial statement assertion.

The susceptibility of a financial statement assertion to a material misstatement assuming there are no related controls.

Question 5.5. (TCO A) (CPA-02712.B) Which of the following relatively small misstatements most likely could have a material effect on an entity’s financial statements? (Points : 10)

An illegal payment to a foreign official that was not recorded.

A piece of obsolete office equipment that was not retired.

A petty cash fund disbursement that was not properly authorized.

An uncollectible account receivable that was not written off.

Question 6.6. (TCO A) (CPA-02888.B) After performing risk assessment procedures, an auditor decided not to perform tests of controls. The auditor most likely decided that: (Points : 10)

The available evidence obtained through tests of controls would not support an increased level of control risk.

A reduction in the assessed level of control risk is justified for certain financial statement assertions.

It would be inefficient to perform tests of controls that would result in a reduction in planned substantive tests.

The assessed level of inherent risk exceeded the assessed level of control risk.

Question 7.7. (TCO A) (CPA-04739.B) When an auditor is to conduct an audit of a service organization, what considerations should the auditor make in the planning stages regarding internal controls of the organization? (Points : 10)

The auditor should assess the control risk before obtaining an understanding of internal controls.

The auditor should obtain an understanding of the entity’s internal controls after performing substantive procedures.

The auditor should obtain an understanding of the effect of the user organization upon the service organization.

The auditor should be engaged to perform agreed-upon procedures.

Question 8.8. (TCO A) (CPA-02911.B) As the acceptable level of detection risk increases, an auditor may change the: (Points : 10)

Assessed level of control risk from low to high.

Assurance provided by tests of controls by using a larger sample size than planned.

Timing of substantive tests from year-end to an interim date.

Nature of substantive tests from a less effective to a more effective procedure.

Question 9.9. (TCO A) (CPA-03010.B) Which of the following controls is least likely to be relevant to a financial statement audit? (Points : 10)

Procedures that prevent the excess use of materials in production.

Policies that relate to compliance with income tax regulations.

Use of computer passwords to limit access to data files.

Generation of production statistics used to evaluate variances.

Question 10.10. (TCO A) (CPA-04709.B) Which of the following statements is correct concerning an auditor’s responsibility to report fraud? (Points : 10)

The auditor is required to communicate to those charged with governance all minor fraudulent acts perpetrated by low-level employees, even if the amounts involved are inconsequential.

The disclosure of material management fraud to principal stockholders is required when both senior management and the board of directors fail to acknowledge the fraudulent activities.

Fraudulent activities involving senior management of which the auditor becomes aware should be reported directly to the SEC.

The disclosure of fraudulent activities to parties other than the client’s senior management and those charged with governance is not ordinarily part of the auditor’s responsibility.

 

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DeVry ACCT 591 Quiz 3 latest

Best DeVry ACCT 591 Quiz 3 latest

DeVry ACCT 591 Quiz 3 latest