Unit 2

Question 1

Engagement performance and evaluating personnel advancement are part of a firm’s __________

Answer 1

Quality Control

Question 2

Documentation completion timing for SEC-filers and nonissuers?

Answer 2

45 Days / 60 Days

Question 3

Documentation retention for SEC-filers and nonissuers?

Answer 3

7 Years / 5 Years

Question 4

What do workpapers document? (2)

Answer 4

Procedures applied and conclusions reached

Question 5

What are 3 required elements of documentation?

Answer 5

Engagement Letter, Audit Program, and Written Assessment of RMM

Question 6

Documentation cannot be deleted after which date?

Answer 6

The documentation completion date

Question 7

What should the successor auditor ask the predecessor auditor pre-engagement acceptance?

Answer 7

About management integrity and reasons for change in auditors

Question 8

The (client/successor auditor) should ask the predecessor for the workpapers.

Answer 8

Client

Question 9

The successor auditor (does/does not) need client permission to discuss matters with the predecessor.

Answer 9

Does need

Question 10

If an engagement changes for a justifiable reason, the original reasons and engagement type (should/need not) be referred to

Answer 10

Need NOT

Question 11

Management (is/isn’t) required to correct internal control deficiencies identified by the auditor.

Answer 11

Does NOT

Question 12

At what point in the audit engagement is the management rep letter signed?

Answer 12

At the end

Question 13

When does the auditor consider finding from substantive interim tests?

Answer 13

During fieldwork

Question 14

What is done during the planning stage of an audit? (3)

Answer 14

1) Understanding industry and control environment
2) General Audit Strat developed
3) Prelim judgements about materiality

Question 15

What should the auditor do if the client refuses assess to predecessor documents?

Answer 15

Review Risk Assessment (we can work around this)

Question 16

What should the auditor do if the client refuses to let the auditor discuss the PY engagement with the auditor?

Answer 16

Withdraw

Question 17

Where in the audit report is a specialist’s work referred to?

Answer 17

EOM

Question 18

When can we use a reference to a specialists work?

Answer 18

Modified reports and worse ONLY

Question 19

The comprehensive audit plan is (more/less) detailed, and covers (more/less) areas that would typically not be covered by a CPA

Answer 19

MORE/MORE

Question 20

Internal auditors may assist the CPA in all aspects except ___________

Answer 20

Subjective Valuation of Confirmations

Question 21

For a FS audit, an understanding must be developed for each ________

Answer 21

Financial Reporting Objective

Question 22

Unmodified interrim info (can/can’t) be used to develop expectations during planning

Answer 22

Can

Question 23

Primary consideration for internal control is whether they affect _________

Answer 23

FS Assertions

Question 24

Observation and inspection help to evaluate the _____ of controls

Answer 24

Design

Question 25

Monitoring internal control includes (3)

Answer 25

1) Improving IC
2) Assessing Quality over Time
3) Assessing info from External Parties

Question 26

Planning usually happens (before/after) the BS date.

Answer 26

Before

Question 27

The auditor’s version of a client’s program is used to process data and compare is called _________

Answer 27

Parallel Simulation

Question 28

Fictitious and real transactions are mixed

Answer 28

Integrated Test Facility

Question 29

This is processed by a client program under the auditor’s control.

Answer 29

Test Data

Question 30

Parallel Simulations can (increase/decrease) sample size at (greater/lower) cost.

Answer 30

Increase / Lower