DECK 1

Question 1

Standards of field work, general standards, and standards are included in?

Answer 1

THE AICPA”S GAAS

Question 2

Critically review the judgment exercised by those assisting in the audit. This is an example of…

Answer 2

This is an example of exercising due care

Question 3

An auditor’s engagement letter most likely would include a statement that

Answer 3

Limits the auditor’s responsibility to detect errors and fraud.

Question 4

In assessing whether to accept a client for an audit engagement, a CPA should consider the

Answer 4

Client’s business risk

CPA’s business risk

Question 5

Before accepting an engagement to audit a new client, an auditor is required to

Answer 5

Make inquiries of the predecessor auditor after obtaining the consent of the prospective client.

Question 6

An auditor is required to establish an understanding with a client regarding the services to be performed for each engagement. This understanding generally includes

Answer 6

The auditor’s responsibility for ensuring that the audit committee is aware of any significant deficiencies in internal control that come to the auditor’s attention.

Question 7

Which of the following matters does an auditor usually include in the engagement letter

Answer 7

Arrangements regarding fees and billing

Question 8

The understanding with the client regarding a financial statement audit generally includes which of the following matters?

Answer 8

The responsibilities of the auditor

Question 9

An auditor’s engagement letter most likely would include

Answer 9

Management’s acknowledgment of its responsibility for maintaining effective internal control.
The engagement letter would typically refer to:

Question 10

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

Answer 10

The prospective client’s consent to make inquiries of the predecessor, if any.

Question 11

Which of the following characteristics most likely would heighten an auditor’s concern about the risk of material misstatements in an entity’s financial statements?

Answer 11

The entity’s industry is experiencing declining customer demand

Question 12

Providing more supervision during an audit of a nonissuer in response to assessed risks of material misstatement at the financial statement level is an example of

Answer 12

An overall response

Question 13

Which of the following factors is most likely to affect the extent of the documentation of the auditor’s understanding of a client’s system of internal controls?

Answer 13

The degree to which information technology is used in the accounting function.

Question 14

In planning a new engagement, which of the following is not a factor that affects the auditor’s judgment as to the quantity, type, and content of audit documentation?

Answer 14

The content of the client’s representation letter.

Question 15

Which of the following circumstances most likely would cause an auditor to consider whether material misstatements exist in an entity’s financial statements?

Answer 15

Supporting records that should be readily available are frequently not produced when requested

Question 16

Which of the following procedures would an auditor least likely perform in planning a financial statement audit?

Answer 16

Selecting a sample of vendors’ invoices for comparison to receiving reports

Question 17

Which of the following could be difficult to determine because electronic evidence may not be retrievable after a specific period?

Answer 17

The timing of control and substantive tests.

Question 18

The audit program usually cannot be finalized until the

Answer 18

Consideration of the entity’s internal control structure has been completed

Question 19

in determining the auditor’s preliminary judgment about materiality..

Answer 19

interim financial statements are used…

Question 20

an auditor most likely use in determining the auditor’s preliminary judgment about materiality

Answer 20

The entity’s financial statements of the prior year