ACCT 591 DeVry Complete Quiz Package

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
The assumptions used in developing the prior year's accounting estimates have changed.