Audit review 11/6/2019

  1. In an audit of internal control over financial reporting, ----------------------------and ------------------------------- in control should be communicated in writing to those charged with governance?
    In an audit of internal control over financial reporting, material weaknesses and significant deficiencies in control should be communicated in writing to those charged with governance?
  2. A CPA purchased stock in an audit client corporation and placed it in a revocable educational trust for the CPA’s dependent minor child. The trust securities were not material to the CPA but were material to the child’s personal net worth. Is the independence of the CPA considered to be impaired with respect to the client?
    Yes, because the stock is considered a direct financial interest and, consequently, materiality is not a factor.
  3. Independence is impaired if, during the period of the professional engagement, a covered member had or was committed to acquire any -------------- or --------------------------financial interest in the client.
    Independence is impaired if, during the period of the professional engagement, a covered member had or was committed to acquire any direct or material indirect financial interest in the client.
  4. When using statistical sampling for testing the effectiveness of internal controls, an auditor’s evaluation would include a statistical conclusion concerning whether ---------------------------------------- in the population were within an acceptable range.
    When using statistical sampling for testing the effectiveness of internal controls, an auditor’s evaluation would include a statistical conclusion concerning whether Procedural deviations in the population were within an acceptable range.
  5. When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely is ---------------- with whom the entity has previously done business.
    When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely is Vendors with whom the entity has previously done business.
  6. Compiled financial statements should be accompanied by an accountant’s report stating that
    The accountant compiled the financial statements in accordance with Statements on Standards for Accounting and Review Services.
  7. The compilation report is a disclaimer stating that the accountant has compiled the financial statements in accordance with -------------------------------------------------------------- issued by the AICPA.
    The compilation report is a disclaimer stating that the accountant has compiled the financial statements in accordance with Statements on Standards for Accounting and Review Services issued by the AICPA.
  8. In determining the number of documents to select for a test to obtain assurance that all sales returns have been properly authorized, an auditor should consider the tolerable rate of deviation from the control activity. The auditor should also directly consider the
    Likely rate of deviations
  9. The factors necessary to determine sample size in an attribute sampling plan for a large population include (1)-------------------------------, (2) the acceptable risk of overreliance, and (3) the expected deviation rate.
    The factors necessary to determine sample size in an attribute sampling plan for a large population include (1) the tolerable deviation rate, (2) the acceptable risk of overreliance, and (3) the expected deviation rate.
  10. The factors necessary to determine sample size in an attribute sampling plan for a large population include (1) the tolerable deviation rate, (2) ---------------------------------------, and (3) the expected deviation rate.
    The factors necessary to determine sample size in an attribute sampling plan for a large population include (1) the tolerable deviation rate, (2) the acceptable risk of overreliance, and (3) the expected deviation rate.
  11. The factors necessary to determine sample size in an attribute sampling plan for a large population include (1) the tolerable deviation rate, (2) the acceptable risk of overreliance, and (3) -----------------------------
    The factors necessary to determine sample size in an attribute sampling plan for a large population include (1) the tolerable deviation rate, (2) the acceptable risk of overreliance, and (3) the expected deviation rate.
  12. The factors necessary to determine sample size in an attribute sampling plan for a large population include (1)---------------------------------, (2) ------------------------------, and (3) --------------------------------.
    The factors necessary to determine sample size in an attribute sampling plan for a large population include (1) the tolerable deviation rate, (2) the acceptable risk of overreliance, and (3) the expected deviation rate.
  13. The group engagement partner may not refer to the audit of the component auditor unless the component auditor performed an audit in accordance with (1) --------------------- (2), ------------------------------------------
    The group engagement partner may not refer to the audit of the component auditor unless the component auditor performed an audit in accordance with (1) GAAS or (2), if required by law or regulation, PCAOB auditing standards.
  14. SSARSs allows release of financial statements for a -----------------, ----------------------, or -------------------------.
    SSARSs allows release of financial statements for a preparation, compilation, or review service.
  15. A client has requested an auditor to audit and report on the single element of net income. The auditor should obtain audit evidence relating to the fairness of ---------------------- and --------------------------.
    A client has requested an auditor to audit and report on the single element of net income. The auditor should obtain audit evidence relating to the fairness of Financial position and results of operations. 
  16. An auditor initially planned to use unrestricted random sampling with replacement in the audit of accounts receivable. Later, the auditor decided to use unrestricted random sampling without replacement. As a result of this decision, the sample size should
    Decrease.
  17. Unrestricted random sampling means that each item in the population has an ------------------------------ of being selected.
    Unrestricted random sampling means that each item in the population has an equal and nonzero chance of being selected..
Author
Joens1313
ID
349423
Card Set
Audit review 11/6/2019
Description
Audit review 11/6/2019
Updated