ACCT 591 DeVry Week 3 Quiz Latest

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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)
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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)
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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.
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)
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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)
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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)
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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)
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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.