Day 17

Question 1

What are the PCAOB Standards on audit evidence?

Answer 1

Audit Evidence depend on:
- The design of the audit procedure whether it is designed to test an ASSERTION directly or it is designed to test for an UNDERSTATEMENT or an OVERSTATEMENT
- The timing of the audit procedure

Question 2

A CPA has examined a client’s compliance with debt covenants associated with a bank loan. What standards apply?

Answer 2

Compliance Attestation Standards

MCQ-06239

Question 3

An auditor increases the assessed level of control risk because control activities were determined to be ineffective. The auditor would INCREASE the:

Answer 3

Extend of tests of details

MCQ-04700

Question 4

True or False: The Auditor is allowed to use the work of a Mgmt Specialist who has a contractual relationship with the client.

Answer 4

True

MCQ-02696

Question 5

Confirmations of AR that have been categorized as “exceptions” by the auditor, most likely could be due to:

Answer 5

Pmts mailed to the client that have not been recorded

An Exception is a response that indicates a difference between the info in the entity’s records and the info provided by the confirming party

MCQ-11057

Question 6

What is the most effective control activity to detect vouchers that were prepared for the payment of goods that were not received?

Answer 6

Match POs, receiving reports, and vendor invoices for each voucher in the AP Department

MCQ-03172

Question 7

What is the required “Time-Out” period?

Answer 7

Lead audit partners are subject to a FIVE year time-out period

Other audit partners are subject to a TWO year time-out period
MCQ-06110

Question 8

True or False: A report on internal control related matters noted in an audit should state that there are no significant deficiencies in internal control

Answer 8

False

MCQ-03112

Question 9

True or False: Manual testing and Parallel Simulations include a risk of corrupting a client’s live data or files?

Answer 9

False - no risk of corrupting client’s data

MCQ-04712

Question 10

Define: SOC 1 Report

Answer 10

Evaluates the impact that certain relevant controls at the service organization have on the FS of the user entity.

Question 11

Define: SOC 2 Report

Answer 11

Gives assurance to a broad range of users regarding controls in place at a service organization to security, availability, processing integrity, confidentiality, and privacy.

MCQ-14639

Question 12

What is? Comparing a sample of cash disbursements recorded just after YE to receiving reports and vendor invoices?

Answer 12

Substantive Procedure used during an Audit to search for unrecorded liabilities

MCQ-08860

Question 13

Government Auditing Standards define three types of engagements:

Answer 13

1. Financial Audits
2. Attests Engagements
3. Performance Audits

MCQ-05153

Question 14

Name an Non-Attest Engagement?

Answer 14

Preparation Engagement

MCQ-04550