ACCT 591 DeVry Complete Quiz Package
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
o<br />
o<br />
o<br />
The minimum amount of misstatements that may be considered to be significant deficiencies in internal<br />
control.<br />
The schedules and analyses that the client's staff should prepare.<br />
The effects that inadequate controls may have over the safeguarding of assets.<br />
Question 2.2. (TCO A) (CPA-06834.B) Under PCAOB standards, which one of the following would not be<br />
considered by the auditor when determining the procedures to perform to obtain an understanding of the nature of the<br />
company? (Points : 10)<br />
o<br />
o<br />
o<br />
o<br />
Become an investor of the company in order to get access to the same information that other investors would<br />
have.<br />
Read public information about the company relevant to the evaluation of the likelihood of material financial<br />
statement misstatement and the effectiveness of the company's internal control over financial reporting.<br />
Obtain information from SEC filings and other sources about trading activity in the company's securities and<br />
holdings of significant shareholders.<br />
Observe or read transcripts of earnings calls and other publicly available meetings with investors and ratings<br />
agencies.<br />
Question 3.3. (TCO A) (CPA-02803.B) Which of the following is required documentation in an audit in accordance<br />
with generally accepted auditing standards? (Points : 10)<br />
o<br />
o<br />
o<br />
o<br />
A flowchart or narrative of the information system relevant to financial reporting describing the recording and<br />
classification of transactions for financial reporting.<br />
An audit plan setting forth in detail the procedures necessary to accomplish the engagement's objectives.<br />
A planning memorandum establishing the timing of the audit procedures and coordinating the assistance of<br />
entity personnel.<br />
An internal control questionnaire identifying controls that assure specific objectives will be achieved.<br />
Question 4.4. (TCO A) (CPA-05716.B) In a financial statement audit, inherent risk is evaluated to help an auditor<br />
assess which of the following? (Points : 10)<br />
o<br />
o<br />
o<br />
o<br />
The internal audit department's objectivity in reporting a material misstatement of a financial statement<br />
assertion it detects to the audit committee.<br />
The risk that the internal control system will not detect a material misstatement of a financial statement<br />
assertion.<br />
The risk that the audit procedures implemented will not detect a material misstatement of a financial statement<br />
assertion.<br />
The susceptibility of a financial statement assertion to a material misstatement assuming there are no related<br />
controls.<br />
Question 5.5. (TCO A) (CPA-02712.B) Which of the following relatively small misstatements most likely could have<br />
a material effect on an entity's financial statements? (Points : 10)<br />
o<br />
o<br />
o<br />
o<br />
An illegal payment to a foreign official that was not recorded.<br />
A piece of obsolete office equipment that was not retired.<br />
A petty cash fund disbursement that was not properly authorized.<br />
An uncollectible account receivable that was not written off.<br />
Question 6.6. (TCO A) (CPA-02888.B) After performing risk assessment procedures, an auditor decided not to<br />
perform tests of controls. The auditor most likely decided that: (Points : 10)<br />
o<br />
o<br />
o<br />
o<br />
The available evidence obtained through tests of controls would not support an increased level of control risk.<br />
A reduction in the assessed level of control risk is justified for certain financial statement assertions.<br />
It would be inefficient to perform tests of controls that would result in a reduction in planned substantive tests.<br />
The assessed level of inherent risk exceeded the assessed level of control risk.