AUD①

Question 1

which of the following best describes what is meant by the term generally accepted auditing standards?
1. produces to be used to gather evidence to support financial statements.
2. measurement of the quality of the auditor’s performance.

Answer 1

[2]
generally accepted auditing standards are measures of the quality of the auditor’s performance and guide the auditor in the performance of a properly planned and executed audit.

Question 2

subsequently discovered fact that leads to a change in an audit opinion may be presented in:(free choice)
・emphasis of matter paragraph
・other matter paragraph

Answer 2

yes-yes

subsequently discovered facts that lead to a change in an audit opinion may be represented in an emphasis of matter paragraph or other matter paragraphs

Question 3

why when management requirs that certain material accounts receivable not to be comfirm can not preclude an unmodified opinion?

Answer 3

as there are generally alternative procedures the auditor can perform to accomplish his or her goals

Question 4

auditor’s responsibility for subsequent events are active between:

Answer 4

the date of the fiancnial statements and the date of auditor’s report.
NOT the date submit

Question 5

which is explicitly included in an unmodified opinion?
1. we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our review of the financial statement
2. we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.

Answer 5

[2]
1 is wrong because audit evidence provides a basisi for the auditor’s opinion, not for a review.

Question 6

which paragraphs of nonissure should refer to GAAP(generally accepted account principal)?

Answer 6

opinion and management’s responsibility

basic for option and auditor’s responsibility section of the report reference GAAS

Question 7

what is GAAS?
1. proceduces to be used to gather evidence to support financial statements
2. measures of the quality of the auditor’s performance

Answer 7

[2]
generally accepted auditing standards are measures of the quality of the auditor’s performance, and guide the auditor in the performance of a properly planned and executed.

auditing standards: deal with the quality of the performance of those acts

auditing procedures: relate to acts to be performed

Question 8

the release date is defined as the date after which existing documentation must not be deleted, and additions to the documentations file must be as such

why wrong?

Answer 8

it is not the report release date but the documentation completion date is

Question 9

audit documentation serves mainly to:
1. provide the principle support for the auditor’s report
2. monitor the effectiveness of the CPA firm’s quality control acitivies

Answer 9

[1]

audit documentation serves mainly to provide
1. the principal support for the auditor’s report
2. assistance in the planning, conduct, and supervision of the audit
3. accountability
4. useful information

Question 10

at the minimum, an understanding with a client should include:
1. the assessed level of the risk of material misstatement
2. the objective and limitations of the engagement, as well as the responsibilities of management and of the auditor

Answer 10

[2]
1 is wrong because the risk assessment produces are not performed until after an understanding with the client has been established

Question 11

what should be included in the documentation of an engagement quality review?

Answer 11

1. the date on which the engagement quality reviewer provide concurring approval of issuance.
2. identification of the engagement quality reviewer and others who assisted the reviewed
3. identification of the documents reviewed by the engagement quality reviewer and others who assisted the reviewer.
   1.聘請質量審核人同意簽發之日。
4. 確定參與質量審查人員和協助審查的其他人
5. 項目質量審查人員和協助審查人員的其他人員審查的文件的標識。

Question 12

pre-audit conference with the audit team primarily to
1. give guidance to the staff regarding both technical and personnel aspects of the audit
2. discuss staff suggestions concerning the establishment and maintenance of time budgets.

Answer 12

[1]
assistants should be informed of their responsibilities and the objectives of the procedures that they are to perform.

Question 13

an auditor’s report on financial statements includes an opinion as to whether the basis of accounting used is appropriate under the circumstances.

why is wrong?

Answer 13

the auditor would not indicate in his/her report an opinion as to whether the method of accounting used is appropriate.

Question 14

which accrued after the client’s calendar-year end, but before the audit report date. would require disclosure in the notes to the financial statements, but no adjustment in the financial statements?
1. a fixed asset used in operations is sold at a substantial profit
2. new convertible bonds are issued to expand the company’s product line

Answer 14

[2]
1 is wrong because the sale of a fixed asset is a non-recognized subsequent event that would not require disclosure or adjustment in the financial statement

2 this transaction does not relate to the year under audit, so no adjustment is needed to the financial statements, but it is considered a significant event that should be disclosed. this information would most likely appear in the subsequent events footnote

Question 15

when substantial doubt that an entity’s ability to continue as a going concern remains, the auditor’s report should be ?

1. an other matter paragraph
2. a separate section of the report

Answer 15

[2]

Question 16

the primary function of an audit strategy
1.
2.
3.

what about outlining the nature, extent, and timing of audit procedures?

Answer 16

1. outline reporting objectives
2. Provide the scope of the audit
3. provide a preliminary assessment of materiality and tolerable misstatement.

outline the nature, extent and timing of audit procedures →audit plan

Question 17

when should contact the predecessor auditor?
1. prior to proposing an audit engagement
2. before the auditor accepts the engagement

Answer 17

[2]

the successor auditor should request permission from the prospective client to make an inquiry of the predecessor auditor

Question 18

auditor unable to obtain sufficient appropriate audit evidence to support an opinion on the supplemental information,
should issue what opinion?

Answer 18

disclaimer of opinion

auditor’s report on the supplemental information should describe the reason for the disclaimer and state that the auditor is unable to and does not express an opinion on the supplemental information.

Question 19

what should include as part of the planning process?　free choice
1. an understanding of the design of controls
2. determining whether controls have been implemented
3. evaluating the operating effectiveness of controls
4. documenting the understanding of internal control

Answer 19

1,2,4

auditor is not required to evaluate the operating effectiveness of controls during the planning process.

Question 20

the financial statement includes property, plant and equipment amounts at fair market value based on management’s position that fair market value better depicts true financial position and results of operations of the company.

which opinion?

Answer 20

adverse opinion

serious GAAP problem exists.
GAAP requires that property, plant, and equipment be stated at cost less accumulated depreciation.

Question 21

in what situation that an uncertainty may result in an unmodified opinion?

Answer 21

if management’S analysis is supported and properly recorded or disclosed.

Question 22

auditing a single financial statement would not constitute a limitation on the scope of the audit.

why?

Answer 22

reporting on only one financial statement and not the others simply involves a limited reporting objective.
審計師應該了解財務報表的目的，預期使用者以及管理層為確定適用的財務框架在這種情況下試可接受而採取的步驟。 只要審計師採取了這些步驟， 審計單一財務報表就不會構成審計範圍的限制1

Question 23

quality control elements
1.
2.
3.
4.

Answer 23

assigning personnel,
client acceptance,
professional development.
engagement/ client acceptance and continuance

Question 24

the client has stated that it will not be able to respond to the auditor’s request for evidence within the prescribed timeframe.

would a company reevaluate established materiality levels or tolerable misstatements?

Answer 24

NO

the client’s request for an extension to submit documentation generally would not have an impact on established materiality levels or tolerable misstatement.

Question 25

under U.S auditing standards, the auditor expresses an opinion on the financial statement’s confirmity with GAAP in the _________ section.

Answer 25

opinion and management’s responsibility

Question 26

the auditor discloses the omitted information which is required by GAAP in the notes to the financial statement

Right or wrong?

Answer 26

Wrong.
management is responsible for the financial statements. the auditor may include information within the auditor’s report(basis-for-modification paragraph), but may not include information within the financial statements and related notes.

Question 27

reviewing financial statements and disclosures for unusual transactions or unexpected balances.

should be performed during the planning phase of the audit?

Answer 27

No.
this is an analytical procedure and may be performed during the overall review stage.

Question 28

which is true?
1. the report should include reference to PCAOB standards and generally accepted accounting principles
2. reference should be made to both PCAOB standards and generally accepted auditing standards.

Answer 28

[1]
an auditor reporting on the audit financial statements of an issuer should indicate in the basis for opinion section that engagement was conducted n accordance with PCAOB standards and should refer to GAAP in the opinion on the financial statements section.

Question 29

which is right?
1. 45 days from the report release date, based on PCAOB standards
2. 60 days from the report release date, based on PCAOB standard

Answer 29

[1]
60 days should based on auditing standards

Question 30

the primary consideration in evaluating controls is whether specific controls:
1. improve the efficiency of the client’s operations
2. affect financial statement assertions

Answer 30

[2]
2 is right since ultimately the auditor must render an opinion on whether those assertions are fairly stated.

Question 31

in selecting an appropriate sample for a substantive test, the auditor most likely would stratify the population if:
1. technique to be used is attribute sampling
2. Auditor plans to give greater representation to large recorded amounts.

Answer 31

[2]
for substantive testing, variable (dollar balance) sampling is used rather than attribute(control testing) sampling.

Question 32

before accepting an engagement to audit a new client, a CPA is required to obtain:

1. an understanding of the prospective client’s industry and business.
2. the prospective client’s consent to make inquiries of the predecessor.

Answer 32

[2]
in a new client relationship, it is mandatory to make inquiries of the predecessor auditor. if the client is unwilling to agree to this procedure, the auditor should consider the implications and decide whether to accept the engagement.

Question 33

which is most reliable?
1. analytical procedures
2. confirmation of account information

Answer 33

[2]
confirmation are constitute external evidence sent directly to the auditor.
analytical procedures often based on internal accounting data, the evidence obtained is not as reliable as that obtained from confirmations.

Question 34

which of the following activities is not an element of a CPA firm’s quality-control system to be considered in establishing quality-control policies and procedures?
1. monitoring the effectiveness of professional development activities.
2. assessing a client’s ability to establish effective internal controls.

Answer 34

[2]

selecting personnel for advancement who have the necessary qualifications is an element of the CPA firm’s quality control system. this is part of the human resource element of quality control.

Question 35

which is not an inquiry the auditor should make to identify the risks of material misstatement due to fruad_
1. whether operating personnel have communicated to management regarding internal control and how it functions to prevent, deter, or detect material misstatement due to fraud.
2. how management communicates to employees its views on acceptable business practices.

Answer 35

[1]
the auditor should inquire whether management( not operating personnel) to charged with governance( not management) regarding internal control and how it functions to prevent, deter…

Question 36

a nonissuer requests CPA to change an audit engagement, and the accountant agrees to change. how should the accountant’s reviews report be modified?
1. the accountant should include in the review report a disclaimer of an audit opinion.
2. the accountant should issue the review report without mentioning the change in engagement.

Answer 36

[2]

Question 37

inherent risk is evaluated to help an auditor assess which of the following?
1. the susceptibility of a financial statement assertion to a material misstatement assuming there are no related controls.
2. the risk that the internal control system will not detect a material misstatement of a financial statement assertion.

Answer 37

[1]
inherent risk is the susceptibility of a relevant assertion to a material misstatement, assuming there are no related controls.

control risk is the risk that a material misstatement will not be detected on a timely basis by the entity’s internal control.

Question 38

which is true?
1. reference should be made to both PCAOB standards and generally accepted auditing standards.
2. the report should include reference to PCAOB standards and generally accepted accounting principles.

Answer 38

[2]
1. 應同時參考 PCAOB 標準和公認的審計標準。GAAS
2. 報告應包括對 PCAOB 標準和公認會計原則的參考。GAAP

there is no requirement to reference GAAS

Question 39

which is an inaccurate statement regarding the sufficiency of audit evidence?
1. the higher the quality of evidence obtained during the audit, the smaller is the quantity of audit evidence that may be necessary for the audit procedure
2. the amount of evidence gathered during an audit procedure has an indirect impact on the level of detection risk.

Answer 39

[2]
the amount of evidence obtained by an auditor for a given audit procedure directly affects the level of detection risk. this is the risk that the evidence gathered by the auditor from the audit procedure will not be adequate to support the financial statement assertions.
有直接影響而不是間接。

Question 40

quality control elements
HELP ME

Answer 40

1. Human resources
2. Engagement /client acceptance and continuance
3. Leadership responsibilities
4. performance of the engagement
5. Monitoring
6. Ethical requirements.

Question 41

a principal advantage of statistical methods of attribute sampling over nonstatical methods is that they provide a scientific basis for planning the:
1. tolerable rate
2. sample size

Answer 41

[2]

Question 42

a most effective way to improve the reliability of electronic responses from customers?
1. directly contact the customer to validate identify and accuracy of information received
2. send out second confirmation request and request a manual response.

Answer 42

[1]
requesting a second manual confirmation response is not warranted under this scenario.

Question 43

in operating an understanding of internal control, auditor is required to obtain knowledge about:自由選択
1. operating effectiveness of controls
2. design of controls

Answer 43

[2]

Question 44

an auditor of a nonissuer should design tests to details to ensure that sufficient evidence supports which of the following?
1. the effectiveness of internal controls
2. the planned level of assurance at the relevant assertion level.

Answer 44

[2]

1 is wrong cause the objective of tests of controls is to evaluate whether a control operated effectively.

Question 45

control environment factors include:

1. 誠信
2. 能力
3. 治理者
4. 經營理念
5. 组织结构
6. 權力分配
7. 人力資源

Answer 45

1. communication and enforcement of integrity and ethical values.
2. commitment to competence
3. participation of those charged with governance
4. management’s philosophy and operating style
5. organizational structure
6. assignment of authority, responsibility and accountability
7. Human resource policies and practices.
   控制環境因素包括：
8. 誠信和道德價值觀的溝通和執行。
9. 能力承諾
10. 治理者的參與
11. 經營理念和經營方式
12. 组织结构
13. 權力分配、職責和問責制
14. 人力資源政策和做法。

Question 46

an auditor’s special report on financial statements prepared in conformity with cash basis of accounting should include an emphasis-of-matter paragraph that:
1. refers to the note to the financial statement that describes the basis of accounting.
2. states whether the financial statement are fairly presented in conformity with another comprehensive basis of accounting.

Answer 46

[1]
2 is wrong cause the opinion paragraph states whether the financial statement are fairly presented in conformity with the other comprehensive basis of accounting.

Question 47

the relevant assertions tested for a client’s transaction and events is
COVERUP

Answer 47

Completeness
cutOff
Valuation, allocation and accuracy估值、分配和準確性
Existence and occurrence估值、分配和準確性
Understandability
Presentation and classification介紹和分類

Question 48

which type of risk increases when an auditor performs substantive analytical audit procedures for financial statement accounts at an interim date?

1. detection
2. control

Answer 48

[1]

2 is wrong cause control risk exists independently of the audit

Question 49

1.projected misstatement

2.factual misstatements

3.judgmental misstatement

Answer 49

1.the auditor’s use of sampling and application to the client’s entire population.
审计员使用抽样并将其应用于客户的整个群体。

2.misstatement when there is absolutely no doubt about the facts involved.指所涉事實完全沒有疑問時的錯報。錯到離譜

3.an unreasonable estimate by the client

Question 50

overhead rates

Answer 50

the business had $10,000 in overhead costs in a month and $50,000 in sales.

The overhead rate is $10,000 / $50,000 = .2 or 20%

This means the business spends twenty cents on overhead for every dollar it makes.

testing the entity’s computation of standard overhead rates generally provides assurance about a client’s inventory valuation.

Question 51

what cashier and mail custodian responsibiity is?

why

check received are endorsed by the cashier and deposited by the mail custodian on a daily basis

is wrong?

Answer 51

because cash collections must be retrictively endoreced and deposited by the cashier.

deposited by the mail custodian woll cause an insufficient control

Question 52

successor auditor ask the predecessor auditor to provide after accepting audit engagement?
1. disagreements between the predecessor auditor and management as to significant accounting policies and principles.
2. matters that may facilitate the evaluation of financial reporting consistency between the current and prior year.

Answer 52

[2]
1 should do before accepting the engagement

Question 53

which is not financial statement assertion as recognized by PCAOB standard?
1. cutoff
2. occurrence
3. disclosure
4. presentation

Answer 53

[1]
PCAOB include the assertion of existence occurence存在或發生, completeness完整性, valuation or allocation估值或分配, right and obligations權利與義務, and presentation and disclose陳述和披露

cutoff testing is coverd by the existence or occurence and the completeness assertions

Question 54

which would issue adverse opinion?
1. the inability to determine the extent of or the amounts associated with a pervasive employee fraud scheme.
2. inadequate disclosure of material information

Answer 54

[2]
inadequate disclosure of material information is a departure from GAAP and may result in either a qualified or adverse opinion

1 may issue a qualified or disclaimer of opinion

Question 55

negtive request form of accounts is useful particulary when:
1. assessed level of control risk relating to receivable is ->high/low
2. numbers of small balances is -> many/few
3. consideration by the recipient is ->likely/unlikely

Answer 55

low-many-likely
1. if the control risk is high, positive comfirmation requests would probably be sent
2. many small balance would make it difficult to keep the number of positive confirmations to a reasonably low level
3. since the auditor is relying on the customers’ consideration as the sole basis of support for the confirmation

Question 56

which would be least effective on contingent liabilities?
1. examining customer confirmation replies
2. examining invoices for professional services

Answer 56

[1]
2 is effective cause invoices from attorneys may provide information regarding litigation, claims and assessments.

may be effective in an audit of contingent liabilities
1. reading the minis of board of directors
2. discussing long-term purchase commitments with the purchasing agent
3. reviewing long-term lease
4. obtaining a client representation letter
5. reviewing a bank confirmation letter

Question 57

if an auditor of a nonissuer discovered an unexpectedly high number of deviations during procedures performed on a sample to test management’s review and approval of time sheets, then the auditor would most appropriately:
1. increase the assessed risks of material misstatement
2. propose an audit adjustment

Answer 57

[1]

2 is wrong because an auditor would propose an audit adjustment related to variable sampling, not attribute sampling(control testing)

Question 58

which would the auditor use to identify unusual year-end transactions?
1. performing analytical procedures
2. obtain a legal inquiry letter

Answer 58

[1]
analytical procedures consist of evaluations of financial information made by a study of the meaningful relationship among data, which often help highlight unusual fluctuation.

Question 59

the primary reason to obtain the letter about litigation, claims, and assessments from attorneys:
1. corroboration of the information furnished by management concerning litigation, claims, and assessments
2. the attorney’s assurance that litigation, claims and assessments that are probable of assertion are properly accounted for

Answer 59

[1]
2 is wrong because arrotrney is not an expert in accounting and would not provide assurance regarding the accounting for such matters

Question 60

the senior auditor responsible for coordinating the fieldwork usually schedules a pre-audit conference with the audit team primarily to:
1. give guidance to the staff regarding both technical and personnel aspects of the audit
2. provide an opportunity to document staff disagreements regarding technical issues.

Answer 60

[1]

2 is wrong. disagreements about technical issues arise and are solved after testing begins, not during the pre-audit conference

Question 61

which is right?
1. there is an inverse relationship between the expected population deviation rate and the sample size
2. deviations from specific control activities at a given rate ordinarily in misstatement at a low rate

Answer 61

[2]
1–> Direct relationship between expected deviation rate and sample size
2–>divination from control activities do not necessarily result in misstatements. therefore, deviations from pertinent control activities at a given rate would ordinarily be expected to result in misstatements at a lower rate.

Question 62

in evaluating an entity’s accounting estimates, one of the auditor’s objectives is to determine whether the estimates are:
1. based on verifiable objective assumptions
2. reasonable in the circumstances

Answer 62

[2]
1–> Many estimates are subjective so estimates need not be based on verifiable objective assumptions

4 responsibilities with respect to evaluating estimates:
1. assess management’s practices
2. verify all material estimates that have been developed
3. determine that accounting estimates are reasonable *
4. ensure that accounting estimates are properly recorded and disclosed.

Question 63

an auditor should assess control risk at less than the maximum for all relevant assertions

why wrong?

Answer 63

an auditor should only assess control risk at less than the maximum if the tests of control support the operating effectiveness of the control during the period of reliance.

correct–> an auditor must obtain evidence that controls are operating effectively during the entire period of reliance if the auditor plans to assess control risk at less than the maximum.

Question 64

which would be used in determining the auditor’s preliminary judgment about materiality?
1. the entity’s financial statements of the prior year
2. the results of the initial assessment of control risk

Answer 64

[1]
the prior year financial statements would be a good starting point in estimating the current year’s expected results, especially for a continuing client.

Question 65

a successor auditor’s inquiries of the predecessor auditor should include questions regarding:
1. the predecessor’s evaluation of audit risk and judgment about materiality
2. the predecessor’s understanding as to the reasons for the change in auditor.

Answer 65

[2]
1 is wrong because the successor may not rely on the predecessor’s evaluation of audit risk and judgment about materiality, must form his/her own judgement.

Question 66

which statements concerning prospective financial statement is correct?
1. only a financial projection would normally be appropriate for general use
2. any type of prospective financial statement would normally be appropriate for limited use.

Answer 66

[2]
both financial forecasts and financial projections are appropriate for limited use.

Question 67

if an auditor performing an integrated audit identifies one or more material weaknesses in a nonissuer’s internal control the auditor should:
1. disclaim an opinion on internal control
2. express an adverse opinion on the entity’s internal control

Answer 67

[2]
restrictions on the scope of the engagement may result in a disclaimer of opinion or withdrawal from the engagement.

Question 68

an auditor should obtain knowledge of a client’s information and communication system in order to understand each of the following, except:
1. the process used to prepare financial statements
2. the means used by an entity to ensure the management directives are carried out.

Answer 68

[2]
control activities( not the information and communication system) are the policies and procedures that help ensure that management directives are carried out.

Question 69

in performing a search for unrecorded retirements of fixed assets, an auditor most likely would:
1. inspect the property ledger and the insurance and tax records, and then tour the client’s facilities
2. analyze the repair and maintenance account, and then tour the client’s facilities

Answer 69

[1]
1 –> In search for unrecorded disposals, the auditor would vouch a sample of assets on the property ledge to those on hand in the client’s facility
2–> Analysis of the repair and maintenance account is useful in identifying transactions that should have been capitalized versus expensed( like unrecorded additions)

Question 70

which is the failure in operating internal controls?
1. misrepresentation by client personnel to the auditor
2. insufficient control consciousness

Answer 70

[1]
用戶個人向審計作出虛假陳述

Question 71

in performing tests concerning the granting of stock options, an auditor should:
1. trace the authorization for the transactions to a vote of the board of directors
2. determine that sufficient treasury stock is available to cover any new stock issued.

Answer 71

[1]
2 is wrong because converted stock options may be distributed from authorized common shares rather than treasury stock

Question 72

T or F ?
a client’s accounting data cannot be considered sufficient audit evidence to support the financial statements

Answer 72

[T]
audit evidence consists of the underlying accounting data and all corroborating information available to the auditor, a client’s accounting data by itself is not considered sufficient audit evidence to support the financial statements.

Question 73

which represents an inappropriate segregation of duties?
1. the cash receipts clerk credits customer accounts when payment is received
2. the accounts payable clerk has access to the purchase order, the receiving report, and the vendor invoice.

Answer 73

[1]
2 is the appropriate cause in order to compare the three and determine whether the invoice is appropriate for payment, accounts payable clerk should do the duties together

Question 74

an auditor assesses control risk because it:
1. provides assurance that the auditor’s materiality levels are appropriate
2. affects the level of detection risk that the auditor may accept

Answer 74

[2]
the auditor used the assessed level of control risk (together with the assessed level of inherent risk) to determine the assessed risk of material misstatement, which in turn affects the acceptable level of detection risk for financial statement assertions.
1 –> unrelated

Question 75

in auditing a not-for-profit entity that receives government financial assistance, the auditor has a responsibility to:
1. assess whether management has identified laws and regulations that have a direct and material effect on the entity’s financial statements
2. issue a separate report that describes the expected benefits and related cost of the auditor’s suggested changes to the entity’s internal control

Answer 75

[1]
2 is wrong because the auditor must issue a separate report on the consideration of the entity’s internal control, not on the expected benefits and related costs.

Question 76

by ensuring that all required disclosure related to property, plant and equipment are adequately disclosed in the footnotes, the auditor would be testing the_____ assertion.

Answer 76

completion

Question 77

performing inquiry and analytical procedures is the primary basis for an accountant to issue a:
1. review report on comparative financial statements for a nonissuer in its second year of operations
2. review report on prospective financial statements that present an entity’s expected financial position, given one or more hypothetical assumptions.

Answer 77

[1]
2–> prospective financial statements that present an entity’s expected financial position may be subject to
1) an examination
2) a compilation
3) a preparation
4) agreed-upon procedures
but not review

Question 78

most effective in assuring the recorded purchases are free of material effort?
1. purchase orders, receiving reports and vendor’s invoices are independently matched in preparing vouchers
2. vendor’s invoices are compared with purchase orders by an employee who is independent of the receiving department

Answer 78

[1]
2–> not enough to compare only vender invoices and purchase orders, as this will still allow payment for goods that were not received

Question 79

which is correct?
1. the date of the representation letter should typically by the same as the audit report
2. the representations made apply until the date of a client’S financial statements.

Answer 79

[1]
the management representation letter includes representations up to the date of the auditor’s report, which is after the date of the client’s financial statements.

Question 80

which will use attribute sampling?
1. evaluating the reasonableness of depreciation expense
2. estimating the amount in an expense account

Answer 80

[1]
attribute sampling is used to estimate a rate of occurrence, and other involves a yes-no question. could be used to determine the error rate in posting journal entries.

2–> variables sampling is typically used to estimate a numerical quantity, such as a reasonable amount for depreciation expense, the amount in an expense account

Question 81

to obtain audit evidence about control risk, an auditor select tests from a variety of techniques including:
1. calculation
2. analytical procedures
3. inquiry
4. confirmation

Answer 81

[3]
test of controls includes such procedures as inspecting documentation, inquiry, observation, and repreformance.

Question 82

each of the following is normally performed while conducting a review of interim financial information, except:
1. comparing disaggregated revenue data
2. obtaining litigation updates from external legal counsel.

Answer 82

[2]
inquiry of the entity’S lawyer regarding litigation, claims, and assessments generally is not required during a review of interim financial information but may be appropriate in certain circumstances.