Question 1

The audit objective that all transactions are recorded in the proper period is related most closely to which of the Audit Standards Board (ASB) transaction assertions?

Accepted Answer

A)  Occurrence
B)  Completeness
C)  Cutoff
D)  Accuracy C

Question 2

The engineering department at Omni Company built a piece of equipment in the company's own shop for use in the company's operations.When looking at the ending balance for the fixed asset account the auditor examined all work orders,purchased materials,labor cost reports,and applied overhead that were capitalized as part of the equipment costs.Which of the following is the ASB balance assertion most closely related to the auditor's testing?

Accepted Answer

A)  Existence
B)  Completeness
C)  Rights and obligations
D)  Valuation

Question 3

Cutoff tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about the PCAOB assertion of

Accepted Answer

A)  presentation.
B)  completeness.
C)  rights.
D)  existence.

Question 4

In auditing the long term debt account,an auditor's procedures most likely would focus primarily on management's assertion of

Accepted Answer

A)  existence.
B)  completeness.
C)  allocation.
D)  rights and obligations.

Question 5

Inquiries of warehouse personnel concerning possible obsolete or slow moving inventory items provide assurance about the PCAOB assertion of

Accepted Answer

A)  completeness.
B)  existence.
C)  presentation.
D)  valuation.
E)  rights and obligations. D

Question 6

What is information risk? What is business risk?

Accepted Answer

Information risk is the risk t...

Question 7

When testing the completeness assertion for a liability account,an auditor ordinarily works from the

Accepted Answer

A)  financial statements to the potentially unrecorded items.
B)  potentially unrecorded items to the financial statements.
C)  accounting records to the supporting evidence.
D)  trial balance to the subsidiary ledger.

Question 8

The engineering department at Omni Company built a piece of equipment in the company's own shop for use in the company's operations.The auditor reviewed all work orders that were capitalized as part of the equipment costs.Which of the following is the ASB transaction assertion most closely related to the auditor's testing?

Accepted Answer

A)  Occurrence
B)  Completeness
C)  Accuracy
D)  Classification

Question 9

The accounting,auditing,and investigating agency of the U.S.Congress,headed by the U.S.Comptroller General is known as

Accepted Answer

A)  the Federal Bureau of Investigation (FBI) .
B)  the U.S.General Accountability Office (GAO) .
C)  the Internal Revenue Service (IRS) .
D)  the United States Legislative Auditors (USL
A)  .

Question 10

Which of the following is the essential purpose of the audit function?

Accepted Answer

A)  Detection of fraud
B)  Examination of individual transactions to certify as to their validity
C)  Determination of whether the client's financial statement assertions are fairly state
D)  Assurance of the consistent application of correct accounting procedures

Question 11

What is the term used to identify the risk that the client's financial statements may be materially false and misleading?

Accepted Answer

A)  Business risk
B)  Information risk
C)  Client risk
D)  Risk assessment

Question 12

The Sarbanes-Oxley Act of 2002 requires that the key company officials certify the financial statements.Certification means that the company CEO and CFO must sign a statement indicating

Accepted Answer

A)  they have read the financial statements.
B)  they are not aware of any false or misleading statements (or any key omitted disclosures) .
C)  they believe that the financial statements present an accurate picture of the company's financial condition.
D)  All of these.

Question 13

Which of the following best describes assurance services?

Accepted Answer

A)  Independent professional services that report on the client's financial statements
B)  Independent professional services that improve the quality of information for decision makers
C)  Independent professional services that report on specific written management assertions
D)  Independent professional services that improve the operations of the client B

Question 14

In performing an attestation engagement,a CPA typically

Accepted Answer

A)  supplies litigation support services.
B)  assesses control risk at a low level.
C)  expresses a conclusion on an assertion about some type of subject matter.
D)  provides management consulting advice.

Question 15

Which of the following is a management assertion regarding account balances at the period end?

Accepted Answer

A)  Transactions and events that have been recorded have occurred and pertain to the entity.
B)  Transactions and events have been recorded in the proper accounts.
C)  The entity holds or controls the rights to assets,and liabilities are obligations of the entity.
D)  Amounts and other data related to the transactions and events have been recorded appropriately.

Question 16

An attestation engagement is one in which a CPA is engaged to

Accepted Answer

A)  issue,or does issue,a report on subject matter or an assertion about the subject matter that is the responsibility of another party.
B)  provide tax advice or prepare a tax return based on financial information the CPA has not audited or reviewed.
C)  testify as an expert witness in accounting,auditing or tax matters,given certain stipulated facts.
D)  assemble prospective financial statements based on the assumptions of the entity's management without expressing any assurance.

Question 17

To be proficient as an auditor,a person must first be able to accomplish which of these tasks in a decision-making process?

Accepted Answer

A)  Identify audit evidence relevant to the verification of assertions management makes in its unaudited financial statements and notes.
B)  Formulate evidence-gathering procedures (audit plan) designed to obtain sufficient,competent evidence about assertions management makes in financial statements and notes.
C)  Recognize the financial assertions made in management's financial statements and footnotes.
D)  Evaluate the evidence produced by the performance of procedures and decide whether management's assertions conform to generally accepted accounting principles and reality.

Question 18

A practitioner is engaged to express an opinion on management's assertion that the square footage of a warehouse offered for sale is 150,000 square feet.The practitioner should refer to which of the following sources for professional guidance?

Accepted Answer

A)  Statement of Auditing Standards.
B)  Statements on Standards for Attestation Engagements.
C)  Statements on Standards for Accounting and Review Services.
D)  Statements on Standards for Consulting Services.

Question 19

The four basic requirements for becoming a CPA in most states are

Accepted Answer

A)  education,the CPA Examination,experience,and substantial equivalency.
B)  the CPA Examination,experience,continuing professional education,and a state certificate.
C)  continuing professional education,the CPA Examination,experience,and an AICPA certificate.
D)  education,the CPA Examination,experience,and a state certificate.

Question 20

The underlying conditions that create demand by users for reliable information include all of the following,except

Accepted Answer

A)  transactions are numerous and complex.
B)  users lack professional skepticism.
C)  users are separated from accounting records by distance and time.
D)  financial decisions are important to investors and users.
E)  decisions are time-sensitive.

Exam 1: Auditing and Assurance Services

The audit objective that all transactions are recorded in the proper period is related most closely to which of the Audit Standards Board (ASB) transaction assertions?

Correct Answer
verified
C

Correct Answer
verified

Cutoff tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about the PCAOB assertion of

Correct Answer
verified

In auditing the long term debt account,an auditor's procedures most likely would focus primarily on management's assertion of

Correct Answer
verified

Inquiries of warehouse personnel concerning possible obsolete or slow moving inventory items provide assurance about the PCAOB assertion of

Correct Answer
verified
D

What is information risk? What is business risk?

Correct Answer
verified
Information risk is the risk t...
View Answer

When testing the completeness assertion for a liability account,an auditor ordinarily works from the

Correct Answer
verified

Correct Answer
verified

The accounting,auditing,and investigating agency of the U.S.Congress,headed by the U.S.Comptroller General is known as

Correct Answer
verified

Which of the following is the essential purpose of the audit function?

Correct Answer
verified

What is the term used to identify the risk that the client's financial statements may be materially false and misleading?

Correct Answer
verified

The Sarbanes-Oxley Act of 2002 requires that the key company officials certify the financial statements.Certification means that the company CEO and CFO must sign a statement indicating

Correct Answer
verified

Which of the following best describes assurance services?

Correct Answer
verified
B

In performing an attestation engagement,a CPA typically

Correct Answer
verified

Which of the following is a management assertion regarding account balances at the period end?

Correct Answer
verified

An attestation engagement is one in which a CPA is engaged to

Correct Answer
verified

To be proficient as an auditor,a person must first be able to accomplish which of these tasks in a decision-making process?

Correct Answer
verified

A practitioner is engaged to express an opinion on management's assertion that the square footage of a warehouse offered for sale is 150,000 square feet.The practitioner should refer to which of the following sources for professional guidance?

Correct Answer
verified

The four basic requirements for becoming a CPA in most states are

Correct Answer
verified

The underlying conditions that create demand by users for reliable information include all of the following,except

Correct Answer
verified

Exam 1: Auditing and Assurance Services

The audit objective that all transactions are recorded in the proper period is related most closely to which of the Audit Standards Board (ASB) transaction assertions?

Correct AnswerverifiedC

Correct AnswerverifiedShow Answer

Cutoff tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about the PCAOB assertion of

Correct AnswerverifiedShow Answer

In auditing the long term debt account,an auditor's procedures most likely would focus primarily on management's assertion of

Correct AnswerverifiedShow Answer

Inquiries of warehouse personnel concerning possible obsolete or slow moving inventory items provide assurance about the PCAOB assertion of

Correct AnswerverifiedD

What is information risk? What is business risk?

Correct AnswerverifiedInformation risk is the risk t...View AnswerShow Answer

When testing the completeness assertion for a liability account,an auditor ordinarily works from the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The accounting,auditing,and investigating agency of the U.S.Congress,headed by the U.S.Comptroller General is known as

Correct AnswerverifiedShow Answer

Which of the following is the essential purpose of the audit function?

Correct AnswerverifiedShow Answer

What is the term used to identify the risk that the client's financial statements may be materially false and misleading?

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act of 2002 requires that the key company officials certify the financial statements.Certification means that the company CEO and CFO must sign a statement indicating

Correct AnswerverifiedShow Answer

Which of the following best describes assurance services?

Correct AnswerverifiedB

In performing an attestation engagement,a CPA typically

Correct AnswerverifiedShow Answer

Which of the following is a management assertion regarding account balances at the period end?

Correct AnswerverifiedShow Answer

An attestation engagement is one in which a CPA is engaged to

Correct AnswerverifiedShow Answer

To be proficient as an auditor,a person must first be able to accomplish which of these tasks in a decision-making process?

Correct AnswerverifiedShow Answer

A practitioner is engaged to express an opinion on management's assertion that the square footage of a warehouse offered for sale is 150,000 square feet.The practitioner should refer to which of the following sources for professional guidance?

Correct AnswerverifiedShow Answer

The four basic requirements for becoming a CPA in most states are

Correct AnswerverifiedShow Answer

The underlying conditions that create demand by users for reliable information include all of the following,except

Correct AnswerverifiedShow Answer

Correct Answer
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C

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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D

Correct Answer
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Information risk is the risk t...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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