ACCT 591 DeVry Complete Quiz Package

o
o
o
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
o
o
o
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.