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1 Audit- Exam 1 Test sobre Audit Midterm pgs 6-9, creado por amanda.padilla el 25/02/2016.

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Audit Midterm pgs 6-9

Pregunta 1 de 17

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41. In a leading securities law and CPA liabilities case, the U.S. Supreme Court ruled in 1976 in Hochfelder v. Ernst and Ernst that before CPAs could be held liable for Rule 10b-5 of the Securities Exchange Act of 1934, what would be required to be shown to the court was the auditor's:

Selecciona una de las siguientes respuestas posibles:

  • ordinary negligence

  • gross negligence

  • knowledge and intent to deceive

  • financial gain at the expense of the plaintiff

Explicación

Pregunta 2 de 17

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42. In describing the cycle approach to segmenting an audit, which of the following statements is not true?

Selecciona una de las siguientes respuestas posibles:

  • all general ledger acounts and journals are included at least once.

  • some journals and general ledger accounts are included in more than one cycle.

  • the "capital acquisition and repayment" cycle is closely related to the "acquisition of goods and services and payment" cycle.

  • the "inventory and warehousing" cycle may be audited at any time during the engagement since it is unrelated to the other cycles.

Explicación

Pregunta 3 de 17

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48. Which of the following statements best describes the auditor's responsibility regarding the detection of fraud?

Selecciona una de las siguientes respuestas posibles:

  • the auditor is responsible for the failure to detect fraud only when such failure clearly results from nonperformance of audit procedures specifically describd in the engagement letter

  • the auditor is required to provide reasonable assurance that the financial statements are free of both material errors and fraud

  • the auditor is responsible for detecting material financial statement fraud, but not a material misappropriation of assets

  • the auditor is responsible for the failure to detect fraud only when an unqualified opinion is issued

Explicación

Pregunta 4 de 17

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46. The essence of the attest function is to:

Selecciona una de las siguientes respuestas posibles:

  • assure the consistent application of correct accounting procedures

  • determine whether the client's financial statements are fairly stated in accordance with an applicable financial reporting framework

  • examine individual transactions so that the auditor may certify as to their validity

  • detect collusion and fraud

Explicación

Pregunta 5 de 17

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49. Two overriding considerations affect the many ways an auditor can accumulate evidence:
1. Sufficient appropriate evidence must be accumulated to meet the auditor's professional responsibility.
2. Cost of accumulating evidence should be minimized.

Selecciona una de las siguientes respuestas posibles:

  • the first is more important than the second

  • the second is more important than the first

  • they are equally important

  • it is impossible to prioritize them

Explicación

Pregunta 6 de 17

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Professional skepticism requires auditors to possess a(n) ______ mind.

Selecciona una de las siguientes respuestas posibles:

  • introspective

  • questioning

  • intelligent

  • unbelieving

Explicación

Pregunta 7 de 17

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which of the following is not one of the four phases in the audit process?

Selecciona una de las siguientes respuestas posibles:

  • inform client of any adjustments or corrections made to the financial statements

  • test controls and transactions

  • complete the audit and issue the report

  • plan and design an audit approach

Explicación

Pregunta 8 de 17

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three common types of confirmations used by auditors are 1. negative confirmations. 2. positive confirmations with a request for information 3. positive confirmations with the information included. if they were placed in the order of importance from highest to lowest, the sequence would be

Selecciona una de las siguientes respuestas posibles:

  • 3,2,1

  • 3,1,2

  • 2,3,1

  • 1,2,3

Explicación

Pregunta 9 de 17

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when making decisions about evidence for a given audit, the auditors goal is to obtain a sufficient amount of timely, reliable evidence that is relevant to the information being verified, and to do so

Selecciona una de las siguientes respuestas posibles:

  • no matter what the cost involved in obtaining such evidence

  • at any cost because the costs are billed to the client

  • at the lowest possible total cost

Explicación

Pregunta 10 de 17

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traditionally, confirmations are used to verify

Selecciona una de las siguientes respuestas posibles:

  • bank balances and accounts

  • fixed asset additions

  • individual transactions between organizations, such as sales transactions

  • all of the above

Explicación

Pregunta 11 de 17

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Which of the following statements is not true?

Selecciona una de las siguientes respuestas posibles:

  • A large sample of highly competent evidence is not persuasive unless it is relevant to the objective being tested.

  • A large sample of evidence that is neither competent nor timely is not persuasive.

  • A small sample of only one or two pieces of relevant, competent, and timely evidence lacks persuasiveness.

  • The persuasiveness of evidence can be evaluated after considering its competence and its sufficiency.

Explicación

Pregunta 12 de 17

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Evidence obtained directly by the auditor is more competent than information obtained indirectly. Which of the following is not an example of the auditor's direct knowledge

Selecciona una de las siguientes respuestas posibles:

  • inquiry

  • computation

Explicación

Pregunta 13 de 17

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An auditor would be least likely to use confirmations in connection with the examination of

Selecciona una de las siguientes respuestas posibles:

  • property, plant, and equipment

  • Refundable income taxes.

Explicación

Pregunta 14 de 17

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to adequately plan the appropriate audit evidence to gather, generally accepted auditing standards require the auditor to gain and understanding of

Selecciona una de las siguientes respuestas posibles:

  • the clients internal control

  • the clients procedural manuals

  • the clients organization charts

  • all of the above

Explicación

Pregunta 15 de 17

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If there is fraud involving the collusion of several employees that includes the falsification of documents, the chancedocuments, the chance a normal audit would uncover such acts is:

Selecciona una de las siguientes respuestas posibles:

  • very low

  • very high

Explicación

Pregunta 16 de 17

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an audit process is a well defined methodology for organizing an audit to ensure that

Selecciona una de las siguientes respuestas posibles:

  • all appropriate audit objectives

  • the evidence gathered is sufficient and appropriate

  • all of the above

Explicación

Pregunta 17 de 17

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In testing for cutoff, the objective is to determine:

Selecciona una de las siguientes respuestas posibles:

  • whether transactions are recorded in the correct accounting period.

  • that no transactions of the current period have been...

Explicación