Day 24 Flashcards
What is the primary reason auditor’s are hesitate to use embedded audit modules?
Auditors are required to be involved in the system design when the application is being programed.
MCQ-02917
What cognizant agency would be most likely assigned an auditee?
The federal agency that provides the most funding to the auditee
MCQ-08927
If a CPA disclaims an opinion, can a qualified or adverse opinion be given in the report?
No, disclaiming an opinion = No Assurance provided
MCQ-05820
Define: Inherent Limitation of Internal Controls
Is a limitation that prevents good controls from working such as, mgmt override
MCQ-05720
When would services performed by another entity not be considered part of the client’s information system?
Services performed by another entity when the services provided are limited to executing transaction that are specifically authorized by the client
MCQ-03250
Confidential Client Information Rule:
States that it is permissible for a member to disclose the name of a client without the client’s consent UNLESS the disclosure of the client’s name results in the release of confidential information.
MCQ-06738
Define: Nonsampling Risk
Nonsampling Risk includes all aspects of audit risk that are not due to sampling.
It is always present and cannot be measured
The auditor can only attempt to reduce this risk to a low level
MCQ-08181
In assessing an internal auditor’s competence, a CPA ordinarily obtains information about what?
- Quality of audit documentation
- Educational level and professional experience
- The audit plan and audit procedures
MCQ-02818
Probability Proportional to Size (PPS)
The auditor controls the risk of incorrect acceptance by specifying that risk level for the sampling plan
MCQ-02879
An auditor analyzes repairs and maintenance accounts primary to obtain evidence in support of the audit assertion that all:
Expenditures for property and equipment have not been charged to expense
MCQ-02484
If a report on a review of interim financial information is presented in a registration statement, the prospectus should include a statement that the report is not a “report” or “part” of the registration statement. The accountant should also read the other portions of the registration statement to ensure that his or her name is not used in a way that indicates greater responsibility than s/he intends.
MCQ-03402
Define: Analytical Procedures
Involve comparison of recorded amounts, or ratios developed from recorded amounts, to the auditor’s expectations
MCQ-02350
When can the auditor refer to the work of a specialist in the auditor’s report?
When the auditor’s report is modified due to a difference between the client’s and specialist’s valuations of an asset
MCQ-05730
The nature and extent of a CPA firm’s quality control policies and procedures depend on:
- The CPA firm’s size
- The nature of the CPA firm’s practice
- Cost-benefit considerations
MCQ-02422
The objective of tests of details of transactions performed as tests of controls is to:
Evaluate whether internal controls operated effectively
MCQ-02492
Opinion Type: the auditor is unable to obtain the audited FS of a consolidated investee
Disclaimer or Qualified (depending on materiality)
MCQ-05706
Opinion Type: Mgmt does not provide reasonable justification for a change in accounting principles
Qualified or Adverse
MCQ-05706
The authoritative body designed to promulgate standards concerning an accountant’s association with unaudited FS of an entity that is NOT required to file FS with an agency regulating the issuance of an entity’s securities is the:
Accounting and Review Services Committee
MCQ-06329
Included in the PCAOB auditing standards, what factors influence the nature and extent of planning activities?
- The size and complexity of the client company
- The auditor’s previous experience with the company
- Changes in circumstances that occur during the audit
MCQ-06829
According to Sarbanes-Oxley, public accounting firms are required to maintain audit WPS for how long?
Seven years
MCQ-07079
Qualitative PCAOB standards that should be considered when evaluating the the materiality of an uncorrected misstatement
- The effects of misclassifications - EX: between operating and non-operating
- the significance of the misstatement relative to the needs of the user
- The cost of the correction
MCQ-06812
Emphasis-of-Matter
“GAASP”
- Going Concern
- Acctg principal change
- Audit option change
- Special
- Purpose framework
