ACCT 591 DeVry Complete Quiz Package

ACCT 591 DeVry Complete Quiz
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ACCT 591 DeVry Complete Quiz Package
ACCT591
ACCT 591 DeVry Complete Quiz Package
ACCT 591 DeVry Week 1 Quiz Latest
Question 1.1.(TCO E) (CPA_02452.B) Under which of the following circumstances would a disclaimer of opinion
not be appropriate? (Points : 10)
o
o
o
o
The auditor is unable to determine the amounts associated with an employee fraud scheme.
Management does not provide reasonable justification for a change in accounting principles.
The client refuses to permit the auditor to confirm certain accounts receivable or apply alternative procedures
to verify his or her balances.
The chief executive officer is unwilling to sign the management representation letter.
Question 2.2.(TCO E) (CPA-02768.B) Park, CPA, was engaged to audit the financial statements of Tech Co., a
new client, for the year ended December 31, 2013. Park obtained sufficient audit evidence for all of Tech's financial
statement items except Tech's opening inventory. Due to inadequate financial records, Park could not verify Tech's
January 1, 2013, inventory balances. Park's opinion on Tech's 2013 financial statements most likely will be which?
Balance sheet Income statement (Points : 10)
o
o
o
o
Disclaimer Disclaimer
Unqualified Disclaimer
Disclaimer Adverse
Unqualified Adverse
Question 3.3. (CPA-03312.B) In order to express an opinion, the auditor obtains a level of assurance about whether
the financial statements are free from material misstatement, whether due to error or fraud. Which of the following is
required of the auditor in obtaining this level of assurance? (Points : 10)
o
o
o
Plan the work and properly supervise any assistants.
Obtain absolute assurance that the financial statements are not misstated due to fraud on the part of
management.
Determine the applicable financial reporting framework and prepare an adequate description of the framework
for inclusion in the financial statements

o
Exercise his or her specific legal powers and authority in investigating suspicious activities of the entity's
employees, including management.
Question 4.4.(TCO E) (CPA-02385.B) Which of the following conditions or events most likely would cause an
auditor to have substantial doubt about an entity's ability to continue as a going concern? (Points : 10)
o
o
o
o
Significant related party transactions are pervasive.
Usual trade credit from suppliers is denied.
Arrearages in preferred stock dividends are paid.
Restrictions on the disposal of principal assets are present.
Question 5.5.(TCO E) (CPA-02566.B) When an independent CPA assists in preparing the financial statements of
a publicly held entity but has not audited or reviewed them, the CPA should issue a disclaimer of opinion. In such
situations, the CPA has no responsibility to apply any procedures beyond (Points : 10)
o
o
o
o
Documenting that internal control is not being relied on.
Reading the financial statements for obvious material misstatements.
Ascertaining whether the financial statements are in conformity with GAAP.
Determining whether management has elected to omit substantially all required disclosures.
Question 6.6.(TCO E) (CPA-04621.B) As of August 13, a CPA had obtained sufficient appropriate audit evidence
with respect to fieldwork on an engagement to audit financial statements for the year ended June 30. On August 27,
an event came to the CPA's attention that should be disclosed in the notes to the financial statements. The event was
properly disclosed by the entity, but the CPA decided not to dual date the auditor's report and dated the report August
27. Under these circumstances, the CPA was taking responsibility for(Points : 10)
o All subsequent events that occurred through August 27.
o Only the specific subsequent event disclosed by the entity.
o All subsequent events that occurred through August 13 and the specific subsequent event disclosed by the
entity.
o Only the subsequent events that occurred through August 13.
Question 7.7.(TCO E) (CPA-02820.B) Which of the following is not an example of the application of professional
skepticism? (Points : 10)
o
o
o
o
Designing additional auditing procedures to obtain more reliable evidence in support of a particular financial
statement assertion
Obtaining corroboration of management's explanations through consultation with a specialist
Inquiring of prior year engagement personnel regarding their assessment of management's honesty and
integrity
Using third-party confirmations to provide support for management's representations
Question 8.8.(TCO E) (CPA-02749.B) An auditor includes a separate paragraph in an otherwise unmodified report
to emphasize that the entity being reported on had significant transactions with related parties. The inclusion of this
separate paragraph (Points : 10)
o
o
o
o
Is considered an "except for" qualification of the opinion.
Violates generally accepted auditing standards if this information is already disclosed in footnotes to the
financial statements.
Necessitates a revision of the opinion paragraph to include the phrase "with the foregoing explanation.”
Is appropriate and would not negate the unqualified opinion.
Question 9.9.(TCO E) (CPA-02444.B) An auditor most likely would express an unqualified opinion and would not
add explanatory language to the report if the auditor (Points : 10)
o
o
Wishes to emphasize that the entity had significant transactions with related parties.
Concurs with the entity's change in its method of computing depreciation.

o
o
Discovers that supplementary information required by FASB has been omitted.
Believes that there is a probable likelihood of a material loss resulting from an uncertainty that is sufficiently
supported and disclosed.
Question 10.10.(TCO E) (CPA-03151.B) Which of the following events occurring after the issuance of an auditor's
report most likely would cause the auditor to make further inquiries about the previously issued financial statements?
(Points : 10)
o
o
o
o
A technological development that could affect the entity's future ability to continue as a going concern
The discovery of information regarding a contingency that existed before the financial statements were issued
The entity's sale of a subsidiary that accounts for 30% of the entity's consolidated sales
The final resolution of a lawsuit explained in a separate paragraph of the auditor's report
ACCT 591 DeVry Week 2 Quiz Latest
Question 1.1. (TCO E) (CPA-06360.B) Which of the following statements is true regarding analytical procedures
in a review engagement? (Points : 10)
o
o
o
o
Analytical procedures are not required to be used as a substantive test.
Analytical procedures do not involve comparisons of recorded amounts to expected amounts.
Analytical procedures are required to be used in the final review stage.
Analytical procedures involve the use of both financial and nonfinancial data.
Question 2.2. (TCO E) (CPA-05719.B) A CPA is engaged to examine an entity's financial forecast. The CPA
believes that several significant assumptions do not provide a reasonable basis for the forecast. Under these
circumstances, the CPA should issue a(an): (Points : 10)
o
o
o
o
Adverse opinion.
Pro forma opinion.
Qualified opinion.
Unmodified opinion with an explanatory paragraph.
Question 3.3. (TCO E) (CPA-06290.B) If requested to perform a review engagement for a nonissuer in which an
accountant has an immaterial direct financial interest, the accountant is: (Points : 10)
o
o
o
o
Not independent and, therefore, may not be associated with the financial statements.
Not independent and, therefore, may not issue a review report.
Not independent and, therefore, may issue a review report, but may not issue an auditor's opinion.
Independent because the financial interest is immaterial and, therefore, may issue a review report.
Question 4.4. (TCO E) (CPA-03400.B) In which case would the accountant be least likely to perform a review of
interim financial information under PCAOB standards? (Points : 10)
o
o
o
o
Quarterly reports are required to be filed with the SEC.
Selected quarterly financial data is included in an annual report.
Quarterly financial data is included in the financial statements of a nonissuer.
The accountant is performing an initial audit of financial statements that include selected quarterly data.
Question 5.5. (TCO E) (CPA-06328.B) Baker, CPA, was engaged to review the financial statements of Hall
Company, a nonissuer. Evidence came to Baker's attention that indicated substantial doubt as to Hall's ability to
continue as a going concern. The principal conditions and events that caused the substantial doubt have been fully

disclosed in the notes to Hall's financial statements. Which of the following statements best describes Baker's reporting
responsibility concerning this matter? (Points : 10)
o
o
o
o
Baker is not required to modify the accountant's review report.
Baker is not permitted to modify the accountant's review report.
Baker should issue an accountant's compilation report instead of a review report.
Baker should express a qualified opinion in the accountant's review report.
Question 6.6. (TCO E) (CPA-06724.B) Which of the following procedures should an accountant perform during an
engagement to compile prospective financial statements? (Points : 10)
o
o
o
o
Test the entity's internal controls to determine if adequate controls exist so that financial projections can be
reasonably achieved.
Make inquiries prior to the date of the report about possible future transactions that may impact the forecast
once the report is issued.
Make inquiries about the accounting principles used in the preparation of the prospective financial statements.
Compare the prospective financial statements with the entity's historical results for the prior year.
Question 7.7. (TCO E) (CPA-06335.B) An accountant performing a compilation or review of the financial
statements of a nonissuer should: (Points : 10)
o
o
o
o
Be able to justify departures from SSARS.
Never depart from SSARS guidelines.
Exercise professional judgment in applying SSARS, since they are considered recommendations as opposed
to standards.
Not depart from Statements on Auditing Standards.
Question 8.8. (CPA-03417.B) The objective of a review of interim financial information of a public entity is to provide
an accountant with a basis for reporting whether: (Points : 10)
o
o
o
o
A reasonable basis exists for expressing an updated opinion regarding the financial statements that were
previously audited.
Material modifications should be made to conform with generally accepted accounting principles.
The financial statements are presented fairly in accordance with standards of interim reporting.
The financial statements are presented fairly in accordance with generally accepted accounting principles.
Question 9.9. (TCO E) (CPA-04741.B) Which of the following activities would most likely be considered an
attestation engagement? (Points : 10)
o
o
o
o
Consulting with management representatives of a firm to provide advice.
Issuing a report about a firm's compliance with laws and regulations.
Advocating a client's position on tax matters that are being reviewed by the IRS.
Preparing a client's tax returns.
Question 10.10. (TCO E) (CPA-06301.B) Which of the following procedures would an accountant least likely
perform during an engagement to review the financial statements of a nonissuer? (Points : 10)
o
o
o
o
Observing the safeguards over access to and use of assets and records.
Comparing the financial statements with anticipated results in budgets and forecasts.
Inquiring of management about actions taken at the board of directors' meetings.
Studying the relationships of financial statement elements expected to conform to predictable patterns.
ACCT 591 DeVry Week 3 Quiz Latest

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

o
o
o
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)
o
o
o
o
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)
o
o
o
o
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)
o
o
o
o
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)
o
o
o
o
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.
ACCT 591 DeVry Week 4 Quiz Latest
Question 1.1.(TCOs B and C) (CPA-02635.B) At December 30, 20X3, Vida Co. had cash of $200,000, a current
ratio of 1.5:1 and a quick ratio of .5:1. On December 31, 20X3, all cash was used to reduce accounts payable. How did
these cash payments affect the ratios? Current ratio Quick ratio (Points : 10)
o
o
o
o
Increased Decreased
Increased No effect
Decreased Increased
Decreased No effect

Question 2.2.(TCOs B and C) (CPA-02310.B) Which of the following circumstances most likely would cause an
auditor to suspect that material misstatements exist in a client's financial statements? (Points : 10)
o
o
o
o
The assumptions used in developing the prior year's accounting estimates have changed.
Differences between reconciliations of control accounts and subsidiary records are not investigated.
Negative confirmation requests yield fewer responses than in the prior year's audit.
Management consults with another CPA firm about complex accounting matters.
Question 3.3.(TCOs B and C) (CPA-05752.B) Which of the following situations most likely could lead to an
embezzlement scheme? (Points : 10)
o
o
o
o
The accounts receivable bookkeeper receives a list of payments prepared by the cashier and personally
makes entries in the customers' accounts receivable subsidiary ledger.
Each vendor invoice is matched with the related purchase order and receiving report by the vouchers payable
bookkeeper who personally approves the voucher for payment.
Access to blank checks and signature plates is restricted to the cash disbursements bookkeeper who
personally reconciles the monthly bank statement.
Vouchers and supporting documentation are examined and then canceled by the treasurer who personally
mails the checks to vendors.
Question 4.4.(TCOs B and C) (CPA-05757.B) As part of the process of observing a client's physical inventories,
an auditor should be alert to: (Points : 10)
o
o
o
o
The inclusion of any obsolete or damaged goods.
Any change in the method of pricing from prior years.
The existence of outstanding purchases commitments.
The verification of inventory values assigned to goods in process.
Question 5.5.(TCOs B and C) (CPA-02504.B) Which of the following procedures most likely would assist an
auditor in determining whether management has identified all accounting estimates that could be material to the
financial statements? (Points : 10)
o
o
o
o
Inquire about the existence of related party transactions.
Determine whether accounting estimates deviate from historical patterns.
Confirm inventories at locations outside the entity.
Review the lawyer's letter for information about litigation.
Question 6.6.(TCOs B and C) (CPA-02575.B) After determining that a related party transaction has, in fact,
occurred, an auditor should: (Points : 10)
o
o
o
o
Add a separate paragraph to the auditor's standard report to explain the transaction.
Perform analytical procedures to verify whether similar transactions occurred, but were not recorded.
Obtain an understanding of the business purpose of the transaction.
Substantiate that the transaction was consummated on terms equivalent to an arm's-length transaction.
Question 7.7.(TCOs B and C) (CPA-02612.B) Which of the following procedures would an auditor most likely
perform in searching for unrecorded liabilities? (Points : 10)
o
o
o
o
Vouch a sample of accounts payable entries recorded just before year-end to the unmatched receiving report
file.
Compare a sample of purchase orders issued just after year-end with the year-end accounts payable trial
balance.
Vouch a sample of cash disbursements recorded just after year-end to receiving reports and vendor invoices.
Scan the cash disbursements entries recorded just before year-end for indications of unusual transactions.

Question 8.8.(TCOs B and C) (CPA-02495.B) During an audit of an entity's stockholders' equity accounts, the
auditor determines whether there are restrictions on retained earnings resulting from loans, agreements, or state law.
This audit procedure most likely is intended to verify management's assertions related to: (Points : 10)
o
o
o
o
Existence.
Completeness.
Valuation and allocation.
Classification and understandability.
Question 9.9.(TCOs B and C) (CPA-02391.B) In performing a count of negotiable securities, an auditor records
the details of the count on a security count worksheet. What other information is usually included on this worksheet?
(Points : 10)
o
o
o
o
An acknowledgment by a client representative that the securities were returned intact.
An analysis of realized gains and losses from the sale of securities during the year.
An evaluation of the client's internal control concerning physical access to the securities.
A description of the client's procedures that prevent the negotiation of securities by just one person.
Question 10.10.(TCOs B and C) (CPA-04713.B) Analytical procedures performed in the final review stage of an
audit generally would include: (Points : 10)
o
o
o
o
Reassessing the factors that assisted the auditor in deciding on preliminary materiality levels and audit risk.
Considering the adequacy of the evidence gathered in response to unexpected balances identified in planning.
Summarizing uncorrected misstatements specifically identified through tests of details of transactions and
balances.
Calculating projected uncorrected misstatements estimated through audit sampling techniques.
ACCT 591 DeVry Week 5 Quiz Latest
Question 1.1. (TCOs B and C) (CPA-05615.B) Jackson is auditing the financial statements of Saffer Company,
an issuer. Which of the following is true? (Points : 10)
o
o
o
o
Jackson is not required to audit internal control, but should report any significant deficiencies or material
weaknesses noted.
Saffer is required to obtain an audit of its internal control, but a professional other than Jackson may be hired
for this purpose.
Jackson is required to audit and report on Saffer's internal control.
If Jackson provides an adverse opinion on the financial statements, an audit of Saffer's internal control is not
permitted.
Question 2.2. (TCOs B and C) (CPA-06853.B) An auditor discovers that an account balance believed not to be
materially misstated based on an audit sample was materially misstated based on the total population of the account
balance. This is an example of which of the following sampling types of risks? (Points : 10)
o
o
o
o
Incorrect rejection.
Incorrect acceptance.
Assessing control risk too low.
Assessing control risk too high.
Question 3.3. (TCOs B and C) (CPA-02600.B) An advantage of statistical sampling over nonstatistical sampling
is that statistical sampling helps an auditor to: (Points : 10)
o
o
Eliminate the risk of nonsampling errors.
Reduce the level of audit risk and materiality to a relatively low amount.

o
o
Measure the sufficiency of the audit evidence obtained.
Minimize the failure to detect errors and fraud.
Question 4.4. (TCOs B and C) (CPA-02617.B) Which of the following sample planning factors would influence
the sample size for a substantive test of details for a specific account? Expected Measure of
amount of tolerable
misstatements misstatement (Points : 10)
o
o
o
o
No No
Yes Yes
No Yes
Yes No
Question 5.5. (TCOs B and C) (CPA-02733.) Should an auditor communicate the following matters to those
charged with governance of a public entity?
Management's consultation with Significant audit other accountants adjustments recorded about significant by the entity
accounting matters (Points : 10)
o
o
o
o
Yes Yes
Yes No
No Yes
No No
Question 6.6. (TCOs B and C) (CPA-06723.B) Which of the following disagreements between the auditor and
management do not have to be communicated by the auditor to those charged with governance? (Points : 10)
o
o
o
o
Disagreements regarding management's judgment about accounting estimates for goodwill.
Disagreements about the scope of the audit.
Disagreements in the application of accounting principles relating to software development costs.
Disagreements of the amount of the LIFO inventory layer based on preliminary information.
Question 7.7. (TCOs B and C) (CPA-02882.B) In a probability-proportional-to-size sample with a sampling
interval of $5,000, an auditor discovered that a selected account receivable with a recorded amount of $10,000 had an
audit amount of $8,000. If this were the only error discovered by the auditor, the projected error of this sample would
be: (Points : 10)
o $1,000
o $2,000
o $4,000
o $5,000
Question 8.8. (TCOs B and C) (CPA-02894.B) An auditor may decide to decrease the acceptable level of risk
when: (Points : 10)
o
o
o
o
Increased reliability from the sample is desired.
Many differences (audit value minus recorded value) are expected.
Initial sample results do not support the planned level of control risk.
The cost and effort of selecting additional sample items is low.
Question 9.9. (TCOs B and C) (CPA-02542.B) An auditor's letter issued on significant deficiencies relating to a
nonissuer's internal control observed during a financial statement audit should: (Points : 10)
o
o
Include a brief description of the tests of controls performed in searching for significant deficiencies and
material weaknesses.
Indicate that the significant deficiencies should be disclosed in the annual report to the entity's shareholders.

o
o
Include a paragraph describing management's assertion concerning the effectiveness of internal control.
Indicate that the audit's purpose was to report on the financial statements and not to provide assurance on
internal control.
Question 10.10. (TCOs B and C) (CPA-02585.B) An auditor established a $60,000 tolerable misstatement for
an asset with an account balance of $1,000,000. The auditor selected a sample of every twentieth item from the
population that represented the asset account balance and discovered overstatements of $3,700 and understatements
of $200. Under these circumstances, the auditor most likely would conclude that: (Points : 10)
o
o
o
o
There is an unacceptably high risk that the actual misstatements in the population exceed the tolerable
misstatement because the total projected misstatement is more than the tolerable misstatement.
There is an unacceptably high risk that the tolerable misstatement exceeds the sum of actual overstatements
and understatements.
The asset account is fairly stated because the total projected misstatement is less than the tolerable
misstatement.
The asset account is fairly stated because the tolerable misstatement exceeds the net of projected actual
overstatements and understatements.
ACCT 591 DeVry Week 6 Quiz Latest
Question 1.1. (TCO D) (CPA-06736.B) In which of the following situations is there a violation of client confidentiality
under the AICPA Code of Professional Conduct? (Points : 10)
o
o
o
o
A member discloses confidential client information to a court in connection with arbitration proceedings relating
to the client.
A member discloses confidential client information to a professional liability insurance carrier after learning of
a potential claim against the member.
A member whose practice is primarily bankruptcy discloses a client's name.
A member uses a records retention agency to store clients' records that contain confidential client information.
Question 2.2. (CPA-02429) The primary purpose of establishing quality control policies and procedures for deciding
whether to accept a new client is to: (Points : 10)
o
o
o
o
Enable the CPA firm to attest to the reliability of the client.
Satisfy the CPA firm's duty to the public concerning the acceptance of new clients.
Minimize the likelihood of association with clients whose management lacks integrity.
Anticipate before performing any fieldwork whether an unmodified opinion can be expressed.
Question 3.3. (TCO D) (CPA-01502.B) According to the profession's ethical standards, which of the following
events may justify a departure from GAAP?
Evolution of
a new form
New of business
legislation transaction (Points : 10)
o
o
o
o
No Yes
Yes No
Yes Yes
No No
Question 4.4. (TCO D) (CPA-06038.B) Detection risk of noncompliance is inversely related to: (Points : 10)

o
o
o
o
Audit risk of noncompliance.
Risk of material noncompliance.
Inherent risk of noncompliance.
Control risk of noncompliance.
Question 5.5. (TCO D) (CPA-02925.B) When an auditor tests a computerized accounting system, which of the
following is true of the test data approach? (Points : 10)
o
o
o
o
Several transactions of each type must be tested.
Test data are processed by the client's computer programs under the auditor's control.
Test data must consist of all possible valid and invalid conditions.
The program tested is different from the program used throughout the year by the client.
Question 6.6. (CPA-05904) Quality control policies and procedures that are established to decide whether to accept
a new client should provide the CPA firm with reasonable assurance that: (Points : 10)
o
o
o
o
The CPA firm's duty to the public concerning the acceptance of new clients is satisfied.
The likelihood of associating with clients whose management lacks integrity is minimized.
Client-prepared schedules that are necessary for the engagement are completed on a timely basis.
Sufficient corroborating evidence to support the financial statement assertions is available.
Question 7.7. (TCO D) (CPA-06110.B) Under the ethical standards of the profession in the United States, which
of the following circumstances would impair independence in the audit of an issuer but would not impair independence
in the audit of a nonissuer? (Points : 10)
o
o
o
o
The firm performing the financial statement audit also designed and implemented the client's financial
information system.
The audit firm provided a loan to the client during the prior year.
The lead partner has worked on the audit engagement of a client for ten years.
The audit firm has an immaterial direct financial interest in the client.
Question 8.8. (TCO D) (CPA-03065.B) The two requirements crucial to achieving audit efficiency and effectiveness
with a computer are selecting: (Points : 10)
o
o
o
o
The appropriate audit tasks for computer applications and the appropriate software to perform the selected
audit tasks.
The appropriate software to perform the selected audit tasks and client data that can be accessed by the
auditor's computer.
Client data that can be accessed by the auditor's computer and audit procedures that are generally applicable
to several clients in a specific industry.
Audit procedures that are generally applicable to several clients in a specific industry and the appropriate audit
tasks for computer applications.
Question 9.9. (TCO D) (CPA-03482.B) An audit performed in accordance with 2 CFR 200 single audit will expand
the auditor's responsibilities beyond generally accepted auditing standards. The auditor's expanded responsibilities
include: (Points : 10)
o
o
o
o
Performance of additional procedures to test and report on compliance with laws, rules, regulations and
provisions of contracts or grant agreements that have any effect on federal award programs.
Performance of additional procedures to test for noncompliance with laws, rules and regulations targeted for
review by the Office of the Inspector General.
Performance of additional procedures to test and report on compliance with laws, rules, regulations and
provisions of contracts or grant agreements that have a direct and material effect on major federal award
programs.
Performance of additional procedures to test and report on achievement of program objectives.

Question 10.10. (TCO D) (CPA-05961.B) Under the ethical standards of the profession, which of the following
investments by a CPA in a corporate client is an indirect financial interest? (Points : 10)
o
o
o
o
An investment held in a retirement plan.
An investment held in a blind trust.
An investment held through a regulated mutual fund.
An investment held through participation in an investment club.