Final Exam Review

Question 1

the date of the management representation letter should coincide with the

Answer 1

auditor’s report

Question 2

if financial statements contain a material but non-pervasive departure from GAAP, the auditors should render a

Answer 2

qualified opinion with reference to departure

Question 3

a report that acknowledges reliance on the reports of component auditors is a type of report modification known as a

Answer 3

division of responsibility

Question 4

true/false
when qualifying an opinion for insufficiency of audit evidence, an auditor should refer to the situation in the basis for opinion paragraph

Answer 4

true

Question 5

true/false
when qualifying an opinion because of an insufficiency in audit evidence, an auditor should refer to the situation in the management responsibilities

Answer 5

false

Question 6

which two terms identify requirements for audit evidence?

Answer 6

sufficient and appropriate

Question 7

which paragraphs of an auditors report should refer to GAAS?

Answer 7

basis for opinion

Question 8

which paragraphs of an auditors report should refer to GAAP?

Answer 8

opinion

Question 9

GAAS = _________
GAAP = _________

Answer 9

GAAS = basis for opinion
GAAP = opinion

Question 10

true/false
the opinion section is changed when a disclaimer of opinion is expressed

Answer 10

true

Question 11

true/false
the basis for opinion section is changed when a disclaimer of opinion is expressed

Answer 11

true

Question 12

true/false
the management responsibilities section is changed when a disclaimer of opinion is expressed

Answer 12

false

Question 13

true/false
the auditor’s responsibilities section is changed when a disclaimer of opinion is expressed

Answer 13

true

Question 14

true/false
the auditor’s responsibilities section is changed when an adverse opinion is expressed

Answer 14

false

Question 15

which attribute is likely to be unique to CPA audit work compared to other professions?

Answer 15

independence

Question 16

true/false/maybe
an accountant with an immaterial direct financial interest in a public entity is independent

Answer 16

false

Question 17

true/false/maybe
an accountant who supervises a client’s office personnel is independent

Answer 17

false

Question 18

true/false/maybe
an accountant who accepted a gift from a client office personnel is independent

Answer 18

maybe

Question 19

which test would an auditor most likely use attribute sampling?

Answer 19

inspecting time cards for supervisor approval

Question 20

true/false
the use of analytical procedures is required during the substantive testing stage

Answer 20

false

Question 21

true/false
control risk can be changed at the auditor’s discretion

Answer 21

false

Question 22

true/false
detection risk can be changed at the auditor’s discretion

Answer 22

true