Auditing and Assurance Concepts and Application 1

Auditing and Assurance Concepts and Application 1


Question text

Which of the following should an auditor obtain from the predecessor auditor prior to accepting an audit engagement?

Select one:


Question text

Set the following phases in proper order:

i. Pre-Engagement

ii. Internal Controls

iii. Evidence-Gathering

iv. Planning

v. Post-Audit Responsibilities

vi. Reporting

Select one:

Question text

Which of the following is least likely included in an audit engagement letter?

Select one:

Question text

Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor’s

Select one:

Question text

As part of a periodic planning exercise, AAA Company discovers that a political dispute may interfere with the company's supply sources. This is an example of:

Select one:

Question text

The objective and scope of the audit and the extent of the auditor’s responsibilities to the client are best documented in

Select one:

Question text

In an audit of financial statements, an auditor's primary consideration regarding a control is whether it:

Select one:

Question text

It involves establishing the overall audit strategy for the engagement and developing an audit plan in order to reduce audit risk to an acceptably low level.

Select one:

Question text

Which statement is incorrect regarding the timing of further audit procedures? 

Select one:

Question text

Which statement is incorrect regarding the extent of further audit procedures? 

Select one:

Question text

Which of the following least likely requires the auditor to send a new engagement letter?

Select one:

Question text

PSA 315 Redrafted requires the auditor to obtain an understanding of the client's internal controls

Select one:

Question text

Which of the following is an example of an inherent limitation in a client's internal control system?

Select one:

Question text

An internal control that is working effectively

Select one:

Question text

The primary purpose of the auditor's consideration of internal control is to provide a basis for

Select one:

Question text

Which of the following is an effective audit planning and control procedures that helps prevent misunderstandings and inefficient use of audit personnel?

Select one:

Question text

Prior to the acceptance of an audit engagement with a client who has terminated the services of the predecessor auditor, the CPA should

Select one:

Question text

There is an inverse relationship that exists between the acceptable level of detection risk and the

Select one:

Question text

The auditor should plan the audit work so that the audit will be performed in an effective manner. The extent of planning will vary according to any of the following, except:

Select one:


Which of the following procedures would an auditor most likely perform in planning a financial statement audit?

Select one:

Question text

If permission from client to discuss its affairs with the proposed auditor is denied by the client, the predecessor auditor should:

Select one:

Question text

The form and content of the audit engagement letters may vary for each client, but they would generally include reference to except:

Select one:

Question text

The following are components of internal control:

Select one:

Question text

Arrangements concerning with which of the following are least likely to be included  in the engagement letter?

Select one:

Question text

A successor auditor most likely would make specific inquiries of the predecessor auditor regarding

Select one:

Question text

Engagement letters are widely used in practice for

Select one:

Question text

Which of the following is/are correct?

Statement 1: The client should plan the audit work so that the audit will be performed in an effective manner.

Statement 2: The auditor should develop and document an overall audit plan describing the scope and conduct of the audit.

Select one:

Question text

Which of the following statements is/are correct?

Statement 1: On recurring audits, the auditor should consider whether circumstances require the terms of the engagement to be revised and whether there is a need to remind the client of the existing terms of engagement.

Statement 2: The auditor should send a new engagement letter ecah year to an established client.

Select one:

Question text

According to PSA 210, the auditor and the client should agree on the terms of engagement. The agreed terms would need to be recorded in

Select one:

Question text

Which statement is incorrect regarding the nature of tests of controls? 

Select one:

Question text

A reason to establish internal control is to:

Select one:

Question text

On recurring audit engagements, the auditor may decide not to send a new engagement letter each period. In which of the following situations will there be no need to send a new letter?

Select one:

Question text

Information about segregation of duties ordinarily is best obtained by

Select one:

Question text

When an independent auditor is approached to perform an audit for the first time, he or she should make inquiries of the predecessor auditor. Inquiries are necessary because the predecessor may be able to provide the successor with information that will assist the successor in determining whether

Select one:

Question text

Internal control can only provide reasonable, not absolute, assurance of achieving entity control objectives. One of the factors limiting the likelihood of achieving those objectives is that:

Select one:

Question text

When a CPA is the auditor of a parent entity and also the auditor of its subsidiary, branch or division (component), which of the following are least likely to be included in the engagement letter?

Select one:

Question text

It is the process designed and effected by those charged with governance, management, and other personnel to provide reasonable assurance about the achievement of the entity's objectives.

Select one:

Question text

 Which statement is incorrect regarding the nature of further audit procedures? 

Select one:

Question text

An audit engagement letter least likely includes

Select one:

Question text

An engagement letter is prepared with the interest(s) of 

Select one:

Question text

Analytical procedures used in planning an audit should focus on

Select one:

Question text

The primary objective of procedures performed to obtain an understanding of internal control is to provide an auditor with

Select one:

Question text

Which statement is incorrect regarding tests of controls? 

Select one:

Question text

Engagement letter that documents and confirms the auditor's acceptance of the engagement would normally be sent to the client

Select one:

Question text

Analytical procedures, which means the analysis of significant ratios and trends including the resulting investigation of fluctuations and relationships that are inconsistent with other relevant information or which deviate from predicted amounts, are not required to be applied

Select one:

Question text

In planning the audit engagement, the auditor should consider each of the following, except

Select one:

Question text

Which of the following statements is correct concerning analytical procedures?

Select one:

Question text

Internal controls are not designed to provide reasonable assurance that

Select one:

Question text

Control activities constitute one of the five components of internal control. Which of the following is not included in this internal control component?

Select one:

Question text

To obtain an understanding of the relevant policies and procedures of internal control, the auditor performs all of the following except:

Select one:

Question text

Which of the following is an example of an inherent limitation in a client's internal control system?

Select one:

Question text

The assessment of the risks of material misstatement at the financial statement level is affected by the auditor’s understanding of the control environment. Weaknesses in the control environment ordinarily will lead the auditor to 

Select one:

Question text

The auditor’s assessment of the identified risks at the assertion level provides a basis for considering the appropriate audit approach for designing and performing further audit procedures.  Which of the following is incorrect? 

Select one:

Question text

In planning the audit engagement, the auditor should consider each of the following, except

Select one:

Question text

Which of the following would a successor auditor normally perform after acceptance of an audit client?

Select one:

Question text

Internal control can only provide reasonable, not absolute, assurance of achieving entity control objectives. One of the factors limiting the likelihood of achieving those objectives is that:

Select one:

Question text

A reason to establish internal control is to:

Select one:

Question text

Internal controls are not designed to provide reasonable assurance that

Select one:

Question text

The auditor should plan the audit work so that the audit will be performed in an effective manner. The extent of planning will vary according to any of the following, except:

Select one:

Question text

Which of the following is/are correct?

Statement 1: The client should plan the audit work so that the audit will be performed in an effective manner.

Statement 2: The auditor should develop and document an overall audit plan describing the scope and conduct of the audit.

Select one:

Question text

The development of a general strategy and a detailed approach for the expected nature, timing, and extent of audit refers to :

Select one:

Question text

To obtain an understanding of a continuing client’s business in planning an audit, an auditor most likely would

Select one:

Question text

There is an inverse relationship that exists between the acceptable level of detection risk and the

Select one:

Question text

It involves establishing the overall audit strategy for the engagement and developing an audit plan in order to reduce audit risk to an acceptably low level.

Select one:

Question text

It is the process designed and effected by those charged with governance, management, and other personnel to provide reasonable assurance about the achievement of the entity's objectives.

Select one:

Question text

 Which of the following is correct statement? 

Select one:

Question text

Which of the following is required documentation in an audit in accordance with generally accepted auditing standards?

Select one:

Question text

The auditor should determine overall responses to address the risks of material misstatement at the financial statement level.  Such responses least likely include 

Select one:

Question text

 The auditor should design and perform further audit procedures whose nature, timing, and extent are responsive to the assessed risks of material misstatement at the assertion level.  Which of the following is the most important consideration in responding to the assessed risks? 

Select one:

Question text

The auditor should consider the nature, extent, and timing of the work to be performed and should prepare a written audit program for every audit. Which audit standard is most closely related to this requirement?

Select one:

Question text

Arrangements concerning with which of the following are least likely to be included  in the engagement letter?

Select one:

Question text

According to PSA 210, the auditor and the client should agree on the terms of engagement. The agreed terms would need to be recorded in

Select one:

Question text

When an independent auditor is approached to perform an audit for the first time, he or she should make inquiries of the predecessor auditor. Inquiries are necessary because the predecessor may be able to provide the successor with information that will assist the successor in determining whether

Select one:

Question text

Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor’s

Select one:

Question text

Set the following phases in proper order:

i. Pre-Engagement

ii. Internal Controls

iii. Evidence-Gathering

iv. Planning

v. Post-Audit Responsibilities

vi. Reporting

Select one:

Question text

Engagement letters are widely used in practice for

Select one:

Question text

Prior to the acceptance of an audit engagement with a client who has terminated the services of the predecessor auditor, the CPA should

Select one:

Question text

Which of the following should an auditor obtain from the predecessor auditor prior to accepting an audit engagement?

Select one:

Question text

Which of the following statements is/are correct?

Statement 1: On recurring audits, the auditor should consider whether circumstances require the terms of the engagement to be revised and whether there is a need to remind the client of the existing terms of engagement.

Statement 2: The auditor should send a new engagement letter ecah year to an established client.

Select one:

Question text

Engagement letter that documents and confirms the auditor's acceptance of the engagement would normally be sent to the client

Select one:

Question text

If permission from client to discuss its affairs with the proposed auditor is denied by the client, the predecessor auditor should:

Select one:

Question text

On recurring audit engagements, the auditor may decide not to send a new engagement letter each period. In which of the following situations will there be no need to send a new letter?

Select one:

Question text

Which of the following is least likely included in an audit engagement letter?

Select one:

Question text

An audit engagement letter least likely includes

Select one:

Question text

The form and content of the audit engagement letters may vary for each client, but they would generally include reference to except:

Select one:

Question text

An engagement letter is prepared with the interest(s) of 

Select one:

Question text

A successor auditor most likely would make specific inquiries of the predecessor auditor regarding

Select one:

Question text

When a CPA is the auditor of a parent entity and also the auditor of its subsidiary, branch or division (component), which of the following are least likely to be included in the engagement letter?

Select one:

Question text

The objective and scope of the audit and the extent of the auditor’s responsibilities to the client are best documented in

Select one:

Question text

Which of the following least likely requires the auditor to send a new engagement letter?

Select one: