acct 241 ch 2

  1. What body is reponsible for promulgating governmental auditing rules?

    B. The U.S. Government Accountablility Office
  2. Which of the following is not one of the 3 standards of field work

    B. due professional care
  3. A list of audit proceudres auditors need to perform to obtain evidence is called an

    A. audit program
  4. To be appropriate, evidence must be all of the following except

    A. sufficient
  5. An audit report that expresses a favorable opinion on the financial statements is a(n)

    D. unqualified opinion
  6. Which of the following procedures would provide the most reliable audit evidence?

    • C. inspection of bank statements obtained directly from the client's
    • financial institution
  7. Which of the following is not one of the 4 generally accepted standards of reporting?

    • A. the auditor should state in the auditor's report whether the audit
    • was conducted in accordance with GAAS
  8. Management's responsibilty for the financial statements is

    • C. explicitly represented in the opening paragraph of the auditors'
    • standard report
  9. The auditors' standard report refers to GAAS and GAAP in which paragraph

    C. scope only opinion only
  10. Ordinarily, what source of evidence should least affect audit conclusions?

    D. inquiry of management
  11. Which of the following is one of the four standards of reporting included in GAAS?

    • B. The report shall state whether the financial statements are presented
    • in accordance with GAAP.
  12. To exercise due professional care, a CPA should:

    • C. Conduct the engagement in accordance with GAAS and ensure that the
    • engagement is completed on a timely basis.
  13. One of a CPA firm’s basic objectives is to provide professional services that conform to professional standards. Reasonable assurance of achieving this objective can be obtained by following:

    A. quality control standards
  14. After the auditors learned of Client Company’s failure to record an expense for obsolete inventory, they agreed to a small adjustment to the financial statements because the Client president told them the company would violate its debt agreements if the full amount were recorded. This is an example of a lack of:

    D. audit reporting independence
  15. The primary purpose for obtaining an understanding of the company’s environment (including its internal control) in a financial statement audit is:

    • D. to determine the nature, timing, and extent of further audit
    • procedures to be performed
  16. Ordinarily, what source of evidence should least affect audit conclusions?

    A. Inquiry of management.
  17. The most persuasive evidence regarding the existence of newly acquired computer equipment is:

    C. physical examination
  18. Which of the following procedures would provide the most reliable audit evidence?

    • C. Inspection of bank statements obtained directly from the client’s
    • financial institution.
  19. Breaux & Co., CPAs requires that all audit documentation contains the initials of the preparer and the reviewer in the top righthand corner. This procedure provides evidence of Breaux & Co., CPAs’ professional concern regarding which generally accepted auditing standard?

    B. Adequate planning and supervision.
  20. The attestation standards do not contain a requirement that auditors obtain:

    D. an understanding of the auditee’s internal controls
  21. Auditor Jones is studying a company’s accounting treatment of a series of complicated transactions in exotic financial instruments. She should look for the highest level of authoritative support for proper accounting in:

    C. FASB statements on accounting standards
  22. The evidence considered most competent by auditors is best described as:

    • C. direct personal knowledge obtained through physical observation and
    • mathematical recalculation
  23. An auditor’s understanding of the control system in an auditee’s organization contributes information for:

    • C. planning the nature, timing, and extent of further audit procedures
    • on an audit
  24. What are the 3 categories of requirements to become a CPA

    C) Education, Exam, and Experience.
  25. Which one of the following includes the three general auditing standards?

    B) Knowledge/training, independence, and due professional care.
  26. What is the general character of the three generally accepted auditing standards classified as standards of field work?

    A) The criteria of audit planning and evidence gathering.
  27. Which of the following are part of the standards of reporting?

    A) GAAP, consistency, and disclosure.
  28. Management’s representation that all transactions and accounts are included in the financial statements are assertions about

    C) completeness
  29. Management’s representation that all the recorded transactions are real transactions is an example of which of the following assertions?

    B) existence or occurrence
  30. In order to make an audit more manageable and efficient the accounts and journals are grouped into?

    C) Cycles.
Card Set
acct 241 ch 2
acct 241 ch 2