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ACCT 591 DeVry Week 6 Quiz Latest

o o o o Audit risk of

o o o o Audit risk of noncompliance. Risk of material noncompliance. Inherent risk of noncompliance. Control risk of noncompliance. Question 5.5. (TCO D) (CPA-02925.B) When an auditor tests a computerized accounting system, which of the following is true of the test data approach? (Points : 10) o o o o Several transactions of each type must be tested. Test data are processed by the client's computer programs under the auditor's control. Test data must consist of all possible valid and invalid conditions. The program tested is different from the program used throughout the year by the client. Question 6.6. (CPA-05904) Quality control policies and procedures that are established to decide whether to accept a new client should provide the CPA firm with reasonable assurance that: (Points : 10) o o o o The CPA firm's duty to the public concerning the acceptance of new clients is satisfied. The likelihood of associating with clients whose management lacks integrity is minimized. Client-prepared schedules that are necessary for the engagement are completed on a timely basis. Sufficient corroborating evidence to support the financial statement assertions is available. Question 7.7. (TCO D) (CPA-06110.B) Under the ethical standards of the profession in the United States, which of the following circumstances would impair independence in the audit of an issuer but would not impair independence in the audit of a nonissuer? (Points : 10) o o o o The firm performing the financial statement audit also designed and implemented the client's financial information system. The audit firm provided a loan to the client during the prior year. The lead partner has worked on the audit engagement of a client for ten years. The audit firm has an immaterial direct financial interest in the client. Question 8.8. (TCO D) (CPA-03065.B) The two requirements crucial to achieving audit efficiency and effectiveness with a computer are selecting: (Points : 10) o o o o The appropriate audit tasks for computer applications and the appropriate software to perform the selected audit tasks. The appropriate software to perform the selected audit tasks and client data that can be accessed by the auditor's computer. Client data that can be accessed by the auditor's computer and audit procedures that are generally applicable to several clients in a specific industry. Audit procedures that are generally applicable to several clients in a specific industry and the appropriate audit tasks for computer applications. Question 9.9. (TCO D) (CPA-03482.B) An audit performed in accordance with 2 CFR 200 single audit will expand the auditor's responsibilities beyond generally accepted auditing standards. The auditor's expanded responsibilities include: (Points : 10) o o o o Performance of additional procedures to test and report on compliance with laws, rules, regulations and provisions of contracts or grant agreements that have any effect on federal award programs. Performance of additional procedures to test for noncompliance with laws, rules and regulations targeted for review by the Office of the Inspector General. Performance of additional procedures to test and report on compliance with laws, rules, regulations and provisions of contracts or grant agreements that have a direct and material effect on major federal award programs. Performance of additional procedures to test and report on achievement of program objectives.

Question 10.10. (TCO D) (CPA-05961.B) Under the ethical standards of the profession, which of the following investments by a CPA in a corporate client is an indirect financial interest? (Points : 10) o o o o An investment held in a retirement plan. An investment held in a blind trust. An investment held through a regulated mutual fund. An investment held through participation in an investment club.