Practice Ques 2 Flashcards
A financial statement audit report issued for a public company states that it was performed in accordance with?
PCAOB Standards.
What is the least persuasive type of audit evidence?
Copies of sales invoices inspected by the auditor.
What underlies the application of GAAS (in relation to fieldwork and reporting).
Materiality and audit Risk.
According to the guidelines of the Department of Labor, an auditor must be…?
Independent fr purposes of examining financial statements to be filed annually with the DOL.
What will indicate slowmoving & obsolete inventory?
Analyzing Inventory Turnover (COGS/Inventory).
If computer control procedures leave no visible evidence indicating that procedures have been performed (and auditors use a value-added network), then what is an advantage?
Reviewing the transactions and comparing them to related output.
In PPS Sampling (dollar unit sampling) what does the auditor control?
the risk of incorrect acceptance by specifying the risk level for the sample plan.
Which is the hardest to detect diversion of proceeds from?
Scrap sales.
If an accountant hasn’t audited financial statements, if they’re submitting the statements they should at least comply with?
Compliation engagements - to show that they have at least complied with applicable provisions.
What could be difficult to determine because electronic evidence may not be retrievable after a specific period?
The timing of control & substantive tests.
Can a CPA vouch for forecasts?
No. They should not assess the probability of achieving estimates if they’ve helped with the preparation of forecasts.
If you’re using a Special Purpose Financial Reporting Framework - which would be an appropriate title for a Statement of Revs & Exp?
Statement of Income - Regulatory Basis.
65%. 10/23/14.
