Day 18

Question 1

Stratified Mean Per Unit sampling may be more effective than unstratified MPU because:

Answer 1

It produces an estimate having a desired level of precision

MCQ-02857

Question 2

Walkthrough procedures:

Answer 2

• Observation of entity’s activities
• Inquiry
• Inspection of documents
• Recalculation
• Reperformance of Controls

MCQ-04381

Question 3

Define: Walkthrough

Answer 3

Following a transaction from it’s origins to where it is reflected on the FS

MCQ-04381

Question 4

What audit procedure would the airport perform to test MGMT’s assertion concerning the completeness of sales transactions?

Answer 4

Inspect the entity’s reports of Pre-numbered shipping documents that have not been recorded in the sales journal

MCQ-02649

Question 5

What opinion? The CEO refuses the auditor access to the minutes of the board of directors

Answer 5

Disclaimer of Opinion

MCQ-14974

Question 6

To gain assurance that all inventory items in a client’s inventory listing schedule are valid, an auditor would trace:

Answer 6

Validity = Existence

Items listed on the Inventory Listing Schedule to Inventory Tags and the Auditors Recorded Count Sheets

MCQ-02443

Question 7

What are the reasons for accounting estimates?

Answer 7

1. The valuation or measurement of some accounts is uncertain pending the outcome of future events
2. Data about past events cannot be accumulated in a timely/cost-effective manner

MCQ-02709

Question 8

Department of Labor (DOL) Indepence Impairments:

Answer 8

1. Direct financial interest or Material indirect financial interest
2. Connection to the plan as a Promoter, Underwriter, Investment Advisor, Voting Trustee, Director, Officer, or Employee
3. An accountant that maintains financial records
4. Accountant maintains an interest with respect to the plan during the period covered /engagement

MCQ-12551

Question 9

Opinion Type: An unjustified accounting change

Answer 9

Qualified or Adverse

Question 10

Opinion Type: A material weakness in Internal Control

Answer 10

Adverse - must be reported to Mgmt and those charged with governance

MCQ-02448

Question 11

Opinion Type: The inability to determine the extent of or the amounts associated with a pervasive employee fraud scheme

Answer 11

Qualified or Disclaimer of Opinion

MCQ-00158

Question 12

Opinion Type: Mgmt’s refusal to provide written representations

Answer 12

Disclaimer of Opinion

MCQ-00158

Question 13

What should the Auditor do when subsequent to the issuance of an auditor’s report, the auditor became aware of facts that would have affected the report had the auditor known?

Answer 13

Determine whether there are persons relying or likely to rely on the FS who would attach importance to the information

MCQ-03143

Question 14

An auditor should obtain sufficient knowledge of an Entity’s Information Systems relevant to financial reporting to understand what?

Answer 14

Processes used to prepare significant accounting estimates

MCQ-02699

Question 15

What does the Assessment of Control Risk affect?

Answer 15

The design of audit procedures but is not relevant in determining materiality

MCQ-03031

Question 16

What would the auditor most likely use to determine preliminary judgements about materiality?

Answer 16

The Entity’s FS of the PY

MCQ-03031

Question 17

Name examples of Material Weaknesses?

Answer 17

1. Fraud committed by Senior Mgmt
2. Identification of a material misstatement that the client’s controls would not have detected
3. Ineffective oversight by those charged with governance

MCQ-03714