acct 241 ch 2

What body is reponsible for promulgating governmental auditing rules?
A. The AICPA Auditing Standards Board
B. The U.S. Government Accountablility Office
C. The Public Company Accounting Oversight Board
D. The Federal Auditing Standards Board

Which of the following is not one of the 3 standards of field work
A. undertanding of the entity, including the risk of material misstatement
B. due professional care
C. sufficient appropriate evidence
D. adequate planning and supervision

A list of audit proceudres auditors need to perform to obtain evidence is called an
A. audit program
B. audit budget
C. audit standard
D. audit plan

To be appropriate, evidence must be all of the following except
A. sufficient
B. relevant
C. unbiased
D. reliable

An audit report that expresses a favorable opinion on the financial statements is a(n)
A. adverse opinion
B. qualified opinion
C. disclaimer of opinion
D. unqualified opinion

Which of the following procedures would provide the most reliable audit evidence?
A. inquires of the entity's audit staff held in private
B. analytical procedures performed by auditors on the entity's trail balance
C. inspection of bank statements obtained directly from the client's financial institution
D. inspection of prenumbered client purchase orders filed in the vourchers payment department

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
B. the auditor must either express an opinion regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed, in the auditor's report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor's report. In all cases where an auditor's name is associated with financial statements, the auditor should clearly indicate the character of the auditor's work, if any, and the degree of responsibility the auditor is taking, in the auditor's report
C. The auditor must identify in the auditor's report those circumstances in which such principles have not been consistently observed in the current period in relation to the precediing period
D. When the auditor determines that information disclosures are not reasonable adequate, the auditor must so state in the auditor's report

Management's responsibilty for the financial statements is
A. explicitly represented in the scope paragraph of the auditor's standard report
B. implicitly represented in the auditors standard report
C. explicitly represented in the opening paragraph of the auditors' standard report
D. explicitly represented in the opinion paragraph of the auditors' standard report

The auditors' standard report refers to GAAS and GAAP in which paragraph
GAAS GAAP
A. introductory only all paragraphs
B. introductory and scope opinionly only
C. scope only opinion only
D. introductory only scope and opinion only

Ordinarily, what source of evidence should least affect audit conclusions?
A. inquiry of company legal counsel
B. external
C. auditor prepared
D. inquiry of management

Which of the following is one of the four standards of reporting included in GAAS?
A. Due professional care is to be exercised in the performance of the audit and the preparation of the report.
B. The report shall state whether the financial statements are presented in accordance with GAAP.
C. The report shall state that GAAS have been followed in the conduct of the audit.
D. Sufficient competent audit evidence is to be obtained to afford a reasonable basis for an opinion regarding the financial statements under audit.

To exercise due professional care, a CPA should:
A. report whether the financial statements are in accordance with GAAP
B. Gather enough audit evidence to have complete assurance that there is enough support for the CPA’s opinion on the financial statements.
C. Conduct the engagement in accordance with GAAS and ensure that the engagement is completed on a timely basis.
D. take continuing professional education classes

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
B. international auditing standards
C. generally accepted accounting practices (GAAP)
D. generally accepted auditing standards (GAAS)

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:
A. auditors’ training and proficiency
B. audit investigative independence
C. planning and supervision
D. audit reporting independence

The primary purpose for obtaining an understanding of the company’s environment (including its internal control) in a financial statement audit is:
A. to make consulting suggestions to the management
B. to determine whether the company has changed any accounting principles
C. to obtain direct sufficient competent audit evidence to afford a reasonable basis for an opinion on the financial statements
D. to determine the nature, timing, and extent of further audit procedures to be performed

Ordinarily, what source of evidence should least affect audit conclusions?
A. Inquiry of management.
B. External.
C. Auditor prepared.
D. Inquiry of company legal counsel.

The most persuasive evidence regarding the existence of newly acquired computer equipment is:
A. documentation prepared externally
B. inquiry of management
C. physical examination
D. observation of auditee’s procedures

Which of the following procedures would provide the most reliable audit evidence?
A. Analytical procedures performed by the auditor on the entity’s trial balance.
B. Inquiries of the client’s internal audit staff held in private.
C. Inspection of bank statements obtained directly from the client’s financial institution.
D. Inspection of prenumbered client purchase orders filed in the vouchers payable department.

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?
A. Gathering sufficient competent evidence.
B. Adequate planning and supervision.
C. Adequate technical training and proficiency.
D. Independence.

The attestation standards do not contain a requirement that auditors obtain:
A. independence in mental attitude
B. sufficient evidence for the conclusions expressed in an attestation report
C. adequate knowledge in the subject matter of the assertions being examined
D. an understanding of the auditee’s internal controls

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:
A. ACIPA industry audit and accounting guides
B. consensus positions of the FASB Emerging Issues Task Force (EITF)
C. FASB statements on accounting standards
D. FASB statements on financial accounting concepts

The evidence considered most competent by auditors is best described as:
A. documentary evidence obtained directly from independent external sources
B. written representations made by the president of the company
C. direct personal knowledge obtained through physical observation and mathematical recalculation
D. internal documents, such as sales invoice copies produced under conditions of strong internal control

An auditor’s understanding of the control system in an auditee’s organization contributes information for:
A. ascertaining the independence in mental attitude of members of the audit team
B. determining whether members of the audit team have the required technical training and proficiency to perform the audit
C. planning the nature, timing, and extent of further audit procedures on an audit
D. planning the professional development courses the audit staff needs to keep up to date with new auditing standards

What are the 3 categories of requirements to become a CPA
A) GAAS, Exam, and Ethics.
B) Education, Exam, and Ethics.
C) Education, Exam, and Experience.
D) GAAP, GAAS, and Exam.

Which one of the following includes the three general auditing standards?
A) Planning, independence, and internal control.
B) Knowledge/training, independence, and due professional care.
C) AICPA, SEC, and GAAS.
D) Knowledge/training, planning, and due professional care.

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.
B) Criteria for the content of the auditor’s report on financial statements and related footnote disclosures.
C) The need to maintain an independence in mental attitude in all matters pertaining to the audit.
D) The competence, independence, and professional care of persons performing the audit.

Which of the following are part of the standards of reporting?
A) GAAP, consistency, and disclosure.
B) GAAS, disclosure, and opinion.
C) FASB, SEC, and GAAS.
D) GAAP, GAAS, and disclosure.

Management’s representation that all transactions and accounts are included in the financial statements are assertions about
A) existence or occurrence
B) valuation or allocation
C) completeness
D) presentation and disclosure

Management’s representation that all the recorded transactions are real transactions is an example of which of the following assertions?
A) presentation and disclosure.
B) existence or occurrence
C) completeness
D) valuation or allocation

In order to make an audit more manageable and efficient the accounts and journals are grouped into?
A) Rows.
B) Circles.
C) Cycles.
D) Columns.