4215402
Description
Quiz by Stephany Fox, updated more than 1 year ago
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Created by Stephany Fox
over 8 years ago
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Question 1
Question
Choose the quantitative factors that hep determine materiality from below.
Answer
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Income before taxes
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Income from continuing operations
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3 year average income
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total assets
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total revenues
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gross profit
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potential for fraud or illegal acts
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higher than normal risk of bankruptcy
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potential loan covenant violations
Question 2
Question
The sum of the misstatements in financial statements can be more than the materiality threshold.
Answer
- True
- False
Question 3
Question
Which of the following would be an acceptable solution is the misstatement is greater than materiality?
Answer
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Leave opinion as is.
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Do not tell the client so they will not try to change anything in the financial statements
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Do additional testing
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Do take the financial risk of walking away from the audit.
Question 4
Question
SAS 84 requires which of the following?
Answer
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Auditors on new engagements need to contact the preceding auditor, with permission from the potential client.
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Auditors on new engagements need to contact the preceding auditor, whether the potential content likes it or not.
Question 5
Question
IT specialists are rarely needed for audit engagements.
Answer
- True
- False
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