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Chapter 5 Pre Quiz

Kayla Harbaugh 10 questions

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Questions in this quiz (10)

  1. 1Which of these statements is true about the audit opinion formulation process presented in this chapter?
    1. AThe audit opinion formulation process is different for the financial statement only audit and the integrated audit.
    2. BThe audit opinion formulation process is based on the premise that management has responsibility to prepare the financial statements and maintain internal control over financial reporting.
    3. CThe audit opinion formulation process is comprised of seven phases.
    4. DAll of these are true statements regarding the audit opinion formulation process.
  2. 2Which of the following accounts would not be included in the Acquisition and Payment for Long-Lived Assets Cycle?
    1. AEquipment
    2. BRevenue
    3. CDepreciation expense
    4. DGain on disposal
  3. 3Which of the following information should be included in audit documentation?
    1. AProcedures performed.
    2. BAudit evidence examined.
    3. CConclusions reached with respect to relevant financial statement assertions.
    4. DAll of this information should be included.
  4. 4Which of the following statements regarding client acceptance/continuance decisions is false?
    1. AAuditors are not required to perform audits for any organization that asks for an audit.
    2. BAn audit firm's client portfolio is impacted by both audit firm decisions and client decisions.
    3. CAuditors should assess the background and experience of accounting personnel of a potential client.
    4. DIt would not be appropriate for audit firms to perform background checks on management of a potential client.
  5. 5Which of the following procedures is least likely to be performed during Phase V of the audit opinion formulation process?
    1. APerformance of an engagement quality review.
    2. BPerformance of preliminary analytical review procedures.
    3. CAssessment of misstatements detected during the performance of substantive procedures and tests of controls.
    4. DDetermination of the appropriate audit opinion(s) to issue.
  6. 6There is not much overlap; i.e., things in common among the auditing standards set by the PCAOB, AICPA, and IAASB.
    1. ATrue
    2. BFalse
  7. 7A classic inventory fraud involves management understating ending inventory, thereby yielding a reduction in cost of goods sold and an overstatement of profitability.
    1. ATrue
    2. BFalse
  8. 8Risk assessment procedures provide sufficient appropriate audit evidence on which to base an audit opinion.
    1. ATrue
    2. BFalse
  9. 9In conducting a substantive audit, the auditor uses only substantive procedures, and does not rely on tests of internal controls.
    1. ATrue
    2. BFalse
  10. 10Substantive procedures include substantive analytical procedures and tests of details.
    1. ATrue
    2. BFalse

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Chapter 5 Pre Quiz
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