Audit Program

Question 1

When an auditor is attempting to determine the extent to which external users rely on a client’s financial statements, they may consider several factors including,

Answer 1

concentration of ownership,

types and amounts of liability

and client size.

Question 2

Most practitioners allocate materiality to balance sheet rather than income statement accounts, because

Answer 2

most income statement misstatements have an equal effect on the balance sheet due to the double-entry bookkeeping system.

Question 3

It is inappropriate to allocate the preliminary to both Balance Sheet and Income statements because

Answer 3

doing so will result in double counting.

Question 4

Audit Program.

Answer 4

A listing of all the things which the auditor will do to gather sufficient, competent evidence necessary

Question 5

Audit Plan

Answer 5

should detail the nature, timing and extent of the audit procedures that are necessary to accomplish the objectives of the audit.

Question 6

During the planning phase of an audit the CPA would most likely

Answer 6

coordinate with client personnel, requiring a discussion of the timing of audit procedures, such as physical count of inventory.