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ACCT 444 DeVry Week 8 Final Exam

The phrase U.S.

The phrase U.S. generally accepted accounting principles is an accounting term that (Points : 5) includes broad guidelines of general application but not detailed practices and procedures. encompasses the conventions, rules, and procedures necessary to define U.S. accepted accounting practice at a particular time. provides a measure of conventions, rules, and procedures governed by the AICPA. is included in the audit report to indicate that the audit has been conducted in accordance with generally accepted auditing standards (GAAS). Question 5.5. (TCO 3) Under the ethical standards of the profession, which of the following situations involving nondependent members of an auditor's family is most likely to impair the auditor's independence? (Points : 5) A parent's immaterial investment in a client A first cousin's loan from a client A spouse's employment with a client A sibling's loan to a director of a client Question 6.6. (TCO 2) Under U.S. GAAS, in which of the following situations would a group engagement partner least likely make reference to component auditor who audited a subsidiary of the entity? (Points : 5) The component auditor was retained by the group engagement partner, and the work was performed under the group engagement partner's guidance and control. The group engagement partner finds it impractical to review the component auditor's work or otherwise be satisfied as to the component auditor's work. The financial statements audited by the component auditor are material to the consolidated financial statements covered by the group engagement partner's opinion. The group engagement partner is unable to be satisfied as to the independence and professional reputation of the component auditor. Question 7.7. (TCO 5) The use of pre numbered sales invoices is meant to prevent (Points : 5) the failure to bill or record sales. duplicate billings and recording of sales. Both A and B Neither A nor B Question 8.8. (TCO 6) Auditors must make decisions regarding what evidence to gather and how much to accumulate. Which of the following is not a decision that must be made by auditors related to evidence? (Points : 5) Audit procedure to use Sample size Timing of each audit procedure Each of the above is a decision that must be made Question 9.9. (TCO 7)

A measure of the auditor's assessment of the likelihood that there are material misstatements in an account, before considering the effectiveness of the client's internal control, is the (Points : 5) acceptable audit risk. control risk. inherent risk. statistical risk. Question 10.10. (TCO 8) Which of the following statements is correct concerning the concept of materiality? (Points : 5) Materiality is determined by references to guidelines established by the AICPA. Materiality depends only on the dollar amount of an item relative to other items in the financial statements. Materiality depends on the nature of an item rather than the dollar amount. Materiality is a matter of professional judgment. Question 11.11. (TCO 9) Which of the following best illustrates the concept of sampling risk? (Points : 5) The documents related to the chosen sample may not be available to the auditor for inspection. An auditor may fail to recognize errors in the documents from the sample. A randomly chosen sample may not be representative of the population as a whole for the characteristic of interest. An auditor may select audit procedures that are not appropriate to achieve the specific objective. Question 12.12. (TCO 10) The audit procedure that is least useful in gathering evidence on significant computer processes is (Points : 5) documentation. observation. test decks. generalized audit software. Question 13.13. (TCO 11) Which of the following is not a condition for a contingent liability to exist? (Points : 5) There is a potential future payment to an outside party that would result from a current condition. There is uncertainty about the amount of the future payment. The outcome of an uncertainty will be resolved by some future event. The amount of the future payment is reasonably estimable. Question 14.14. (TCO 5) A procedure that would most likely be used by an auditor in performing tests of control procedures, that involve segregation of functions and leave no transaction trail, is (Points : 5) inspection. observation. reperformance. reconciliation. Question 15.15. (TCO 5) Which of the following audit tests would be regarded as a substantive test of transactions? (Points : 5)

Guide to Public Company Auditing
The New Assurance Handbook -
Summary Financial Information from the Auditor for Fiscal Year 2011
Audit Exemption for Small Companies - Accounting and - ACRA
Implementation Guide on Reporting Standards -
DEVRY ACCT 346 Week 8 Final Exam