according to the profession's ethical standards, an auditor is considered independent in which of the following instances? four months later, lauren files for bankruptcy. Sammy's management tells Kerry that if the misstatement is corrected or if Kerry issues an opinion that indicates there is a material misstatement, Sammy Corp. will likely have to declare bankruptcy and thousands of employees will lose their jobs. They are therefore tests of control. In the final analysis, the amount and kinds of evidential matter required to support the auditor's opinion should be determined by: The auditor has determined that there is a preponderance of persuasive evidence for each financial statement assertion that is material, and therefore a reasonable basis for their opinion. When using statistical sampling a method that estimates the population mean is called the: If the auditor is testing for an understatement of accounts payable, the appropriate population from which to draw a sample is: If there is an increase in the total error that the auditor is willing to accept, the effect on the sample size is: What effect would stratification of a population have upon the sample for substantive procedures undertaken by an auditor? Which of these does not constitute sampling? In order for an auditor to assess control risk at a low level based on computer application controls, the auditor should test: The types of testing that an auditor can use in a computer information system are: With computer-assisted audit techniques, using the test data approach, it is true that: With computer-assisted audit techniques using an integrated test facility, it is true that: Which of these is not an advantage of parallel simulation? The purpose of using analytical procedures in auditing is to: In performing your analytical review of sales, you find the following information for a company with a 30 June year-end. Which of the following would generally be considered the least appropriate form of evidence? audit risk assessment and related audit plan. A. For example, if a sales tax audit uncovers $100 of unremitted sales tax in an audit test of 1% . The timing of tests of controls should be: In considering the internal auditors' organisational status, the auditor would need to take into account which of the following factors? to which of the following parties may a CPA partnership provide its audit documentation, without being lawfully subpoenaed or without the client's consent? Client evaluations involve: Dealings between a predecessor and proposed auditor normally includes: An auditor has been offered a new audit. Tests confirming receivables. The factory manager informed the auditor that this was because the machines were being serviced; however, the auditor saw no evidence of this. View Test Prep - Test_ Chapter 14- Audit Completion _ Quizlet from GERMAN 101 at Trident Technical College. What is the auditor's responsibility in assessing the risk of fraud in planning? key largo bank would most likely sue humphrey claiming, lauren hires humphrey, a cpa, to audit her financial statements. under the ethical standards of the profession, which of the following investments by a CPA in a corporate client is an internal financial interest? which type of threat most likely results from an auditor's financial interest in a client? Start studying Audit Test #3. Administra-tive reporting typically includes audit budgets among other things. which of the following is required for a cpa firm to designate itself as "members of the american institute of certified public accountants" on its letterhead? We ensure that the audit testing procedures comply with the guidance laid out by the AICPA, which means the tests confirm design and operating effectiveness. Which of the following statements is correct? If not, they may need more training or you may need better risk-management policies. 12/11/2020 Test: CPA - AUD - Hotspot | Quizlet 1/5 5 Written questions 1. under the code of professional conduct of the AICPA, which of the following is required to be independent in fact and appearance when discharging professional responsibilities? Copy and Edit View full resource. under the AICPA's conceptual framework for independence, the member-client relationship is evaluated to determine whether independence in fact and appearance is jeopardized. dara & co. audit hill corporation. which of the following defines the imperative principle of ethics? Which of the following would be a test of controls relating to sales? based on the audited financial statements, key largo bank approves the loan to lauren. How would this affect the audit plan? Internal Auditing Chapter Exam Instructions. after the acquisition, the fraud was discovered and elliot corp. suffered substantial losses. if elliot sues adam & co., elliot must prove that adam & co. c. failed to exercise the appropriate level of professional care. d. Audit plan. INCORRECT No answer given THE ANSWER Third Standard of Fieldwork 2. Study Flashcards On Audit Test Test #3 Ch. An audit compliance test looks at whether your employees comply with the procedures for preventing fraud, embezzlement and theft. Learn vocabulary, terms, and more with flashcards, games, and other study tools. key largo bank would most likely sue humphrey claiming. which of the following is not included in rule of conduct 102, integrity and objectivity? b. an out of town client takes the audit engagement team out to dinner at a renowned local restaurant. Lauren would most likely sue Humphrey claiming, failure to provide any level care in fulfilling a duty owed to another party, including reckless disregard for the truth, is called, to prevail in an action brought under common law, the plaintiff must show all of the following except, c. auditors knew the financial statements contained a material misstatement, Lauren hires Humphrey, a CPA, to provide an audit of her financial statements. Doe hier je beroepskeuzetest! Testing the work of the internal auditors is least likely when the external auditor has decided that: In a computer information system, control procedures that provide reasonable assurance that the recording, processing and reporting of data are properly performed for specific applications are known as: Which of the following statements is most accurate concerning audit testing? An audit test is a sample taken from a larger population, with the intent of testing the sample for certain characteristics, which are then extrapolated to the entire population. humphrey completes the audit and issues an unqualified opinion. In regard to these items, professional standards require the auditor to: In making judgements about materiality at the account balance level, the auditor must consider the relationship between it and materiality at financial report level as a whole. An auditor need not abide by a particular auditing standard if the auditor … C) substantive tests of details of transactions while also testing for compliance with controls. D) occurrence. The auditor would not consider which of the following in considering the effectiveness of the internal auditors? Lauren is late filing the financial statements and is fined $100,000 by the regulatory body. Administrative reporting is the reporting rela-tionship within the organization’s management structure that facilitates the day-to-day opera-tions of the internal audit activity. Type When the auditor traces a sales invoice to the accounts receivable ledger, the type of audit evidence being obtained is: When the auditor compares the client's profit performance with other firms within the same industry the auditor is performing: Which audit procedure is most associated with completeness? Which of the following is true regarding audit evidence? Chapter 1: http:/quizlet.com/36008148/audit-exam-practice-flash-cards/ Chapter 2: in april 2006, the PEEC adopted the conceptual framework for AICPA independence standards, which describes the PEEC's risk-based approach to analyzing independence issues that arise: familiarity threat- cpa's having a close or longstanding relationship with a client, must be 1. realized or realizable and 2. earned, assertions-- three are the correct answers, Regulates daily trading of securities and requires periodic financial statements and information to be filed with the SEC, agency that has the ultimate authority over us, uses legal precedent to identify responsibility. auditors should not be liable to any party if they perform services that met the standards of, a principle that may reduce or eliminate auditors' liability to clients is. A test of controls for possible disruptions to IT data caused by disasters such as fire or flood is: The relationship between the required understanding of the internal control structure and the preliminary audit strategy is that: Where a test of controls reveals some problems, under what circumstances will the auditor still be able to rely on the control system? b. a CPA in public practice providing auditing and other attestation services. The main purpose of the engagement letter is to: In the tour of the client's operations, the auditor noted two machines were not operating in the client's factory. If the sample supports the conclusion that the recorded account balance is materially misstated when in fact it is, this is: What would most effectively describe the risk of incorrect rejection in terms of substantive audit testing? which of the following would not be considered a covered member? Are optional guidelines which an auditor may choose to follow or not follow when conducting an audit. Call us at 215-675-1400, or send us a message if you have additional questions about … An audit is carried out in firms to affirm that their books of accounts reflect a true and fair view of the position of the company and note incidences where fraud has taken place. Mays must prove that: B. the financial statements contained a material misstatement, Lauren hires Humphrey, a CPA, to audit her financial statements. Those tests indicate that the related controls are operating effectively. a CPA is permitted to disclose confidential client information without the consent of the client to. Tests of … Ben je bang voor vuur? Chapter 5 audit review test for ACCT441. 25. Hart & Co., CPAs, gave an unqualified opinion on McCovey's financial statements that were included in the registration statement filed with the SEC. based on the audited financial statements, key largo bank approves a loan to lauren. which of the following is NOT one of the the AICPA principles of professional conduct? Our online audit trivia quizzes can be adapted to suit your requirements for taking some of the top audit quizzes. Kerry CPA is the auditor for Sammy Corp. During the audit, Kerry discovers a material misstatement in Sammy's financial statements. a. failing to disclose material facts when the employer's external accountant has requested written representations. which of the following is not a key element of the definition of ethics? c.Kerry is likely liable to any person who suffered a loss as a result of the fraud. c. make and enforce all the rules of conduct for CPA's who are AICPA members. c. any surviving partner(s) on the death of a partner. Inquiries of warehouse personnel concerning possible obsolete or slow-moving inventories provide assurance about management's assertion of: To verify management's assertion of existence, an auditor would most likely: What is not necessarily required as part of the audit process? Which of these is not compatible with a high level of inherent and control risk? An auditor would make an initial assessment of control risk at the maximum when: A predominantly substantive approach to audit strategy is based on the assumption that: A decision the auditor needs to consider is whether the actual assessed level of control risk supports the planned level of substantive tests. which of the following acts by a CPA who is in business most likely is a violation of the ethical standards of the profession? 75.000+ Leden; 400.000+ Quizzen; 100.000+ Verhalen; Gratis Aanmelden. This visit is referred to as the: In recurring engagements the auditor's emphasis is primarily on: Knowledge of related parties is important in obtaining an understanding of the client's business because: ASA 520 requires that auditors apply analytical procedures at the planning stage of an audit: The greatest opportunities for fraudulent financial reporting exist with: Which of the following is NOT one of the three conditions that are generally present when fraud occurs? This is because: Which aspects of substantive testing can an auditor change if the actual level of control risk changes during an assessment of internal control? Instead, audit testing aims to examine a testing process already in place for coverage and accuracy of … Which risk is controllable by the auditor? An auditor would issue an adverse opinion if; C. Members of the Board of Directors. Bij een audit kunnen verschillende aspecten of afdelingen van de organisatie worden doorgelicht om na te gaan welke dingen er minder goed lopen, zodat er maatregelen kunnen volgen om de gebreken op te lossen. a. Audit working papers include documentation: Audit working papers demonstrate all of the following except: Which of the following is NOT one of the factors that influence the form, content and extent of the working papers? The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the finanical statements under audit. If an auditor has performed tests of controls part-way through a company's reporting period at an interim visit, what further procedures are required at the final audit stage? Each group of audit tests involves a specific set of tasks or activities meant to uncover improprieties. Key Largo Bank would most likely sue Humphrey claiming, lauren hires humphrey, a cpa, to audit her financial statements. Some special considerations in developing audit programs for initial engagements are: A substantive procedure to obtain evidence as to the presentation and disclosure assertions of inventories in the financial report is: Which of these is most likely to be based on an 'accounting estimate'? The engagement letter includes a statement acknowledging that audited financial statements are required to be filed with a regulatory body by October 1. A high risk of misstatement is associated with inventory due to the: The auditor would need to be alert for transactions that have occurred with related parties, because: If the predominantly substantive approach preliminary audit strategy is used, planned detection risk will be: If the acceptable level of detection risk decreases, the assurance directly provided from: Which of these is not considered a substantive procedure? Start studying Audit Test 2: Multiple Choice. which of the following philosophical principles in ethics places emphasis on the consequences of action, rather than on following the rules? Choose your answers to the questions and click 'Next' to see the next set of questions. In assessing the risk of material misstatement, an auditor will not need to carefully assess the: Which of these is not a risk assessment procedure? Which of the following have an inverse relationship? Why is it important to obtain an understanding of the internal control system? B) tests of controls that are relevant to multiple assertions. Print test 69 Multiple choice questions. Start studying Audit Test 4. which of the following statements is true concerning auditors responsibilities during the audit? Quickly memorize the terms, phrases and much more. Test out what you know about audits by taking up the audit test below, covering various terminologies and procedures. What would be an appropriate sample of invoices to gain reasonable assurance that all payments are properly authorised as part of the annual audit? C. Tests of the signatures on canceled checks to board of director's authorizations. 1. These tests are not investigating the receivables balance in the SOFP. D) a test of dual controls with multiple procedures. Auditor data analytics helps auditors to: According to The International IR Framework, which of the following is not one of the Guiding Principles that underpin the preparation of an integrated report and how it is presented? This meant that production was 25% lower than normal. The auditor may assess the control risk as high when: A predominantly substantive audit strategy will: When assessing specific audit objectives for cash at bank, the objective of ensuring that all cash receipts and payments journals are mathematically correct and have been properly posted to the general ledger would mostly serve which assertion? 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