ACCT 4332 ACTUAL EXAM PAPER 2026
QUESTIONS WITH SOLUTIONS GRADED A+
◉The probability that either an error or fraud will result in a
material misstatement is
A. control risk
B. risk of material misstatment
C. inherent risk. Answer: B,C
◉Auditors are required to plan the work and "obtain and evaluate
evidence" as part of the GAAS ________ principal. Answer:
Performance
◉The information auditors use to arrive at conclusions and form the
audit opinion is called _____________. Answer: evidence
◉The fundamental principle of _______ requires that the auditor
obtains resonable assurance about whether the financial statements
as a whole are free from material misstatement whether due to
fraud or error
a. performance
b. reporting
,c. responsibilities. Answer: A
◉Materiality: Check all that apply
A. is part of the objective of the audit
B. recognizes auditors should focus on matters important to
financial statment users
C. Recognizes auditors do no expect account balances to be accuate
to the penny
D. is commonly established based on dollar amounts of key financial
statement subtotals. Answer: A,B.C
◉To obtain reasonable assurance the auditor must: Check all that
apply
A. identify and assess risks of material misstatements
B. obtain sufficient appropriate audit evidence
C. apply appropriate materiality levels throughout the audit
D. issue a modified opinion at the conclusion of the audit
E. plan to work and supervise assistants. Answer: A,B,C,E
◉The likelihood that an error or fraud will exist in the financial
statements prior to considering the auditors work is the risk of
____________________. Answer: material misstatement
,◉The chance that the audit team's substantive procedures will fail
to uncover a material misstatement is called _________ risk
A. appropriate
B. reliablity
c. Suffciency
D. detection. Answer: D
◉To be considered _________, evidence must be reliable and relevant.
Answer: appropriate
◉PCAOB auditing standards are subject to the formal approval of
the
A. Audition standards board
B. IRS
C. Sec
D. AICPA. Answer: C
◉Due Care:
A. expects auditors to be infallible
B. relates to auditor competence and capabilities
C. requires an appropraite level of professional skepticism
D. Reflects a resonable level of performance. Answer: B,C,D
, ◉Generally Accepted Auditing Standards (GAAS) Check all that
apply
A. guide the conduct of audit examinations
B. identify necessary qualifications and characteristics of auditors
C. only include pronouncements issued by the PCAOB
D. have a purpose to meet the objective of audit emainations.
Answer: A,B,D
◉The risk of material misstatement is a combination of ___________
risk and _______ risk. Answer: inherent and control
◉When an auditor is perceived to by others to be unbiased, the
possesses _________ in ________. Answer: indepence, appearance
◉Reasonable assurance is:
A. a high, but not absolute level of assurance
B. absolute level of assurance
C. based on what a typical investor would consider to be resonable.
Answer: A
◉When auditors confirm accounts receivables with customers ,
evidence is provided about the legitimacy of the sales, but does not
QUESTIONS WITH SOLUTIONS GRADED A+
◉The probability that either an error or fraud will result in a
material misstatement is
A. control risk
B. risk of material misstatment
C. inherent risk. Answer: B,C
◉Auditors are required to plan the work and "obtain and evaluate
evidence" as part of the GAAS ________ principal. Answer:
Performance
◉The information auditors use to arrive at conclusions and form the
audit opinion is called _____________. Answer: evidence
◉The fundamental principle of _______ requires that the auditor
obtains resonable assurance about whether the financial statements
as a whole are free from material misstatement whether due to
fraud or error
a. performance
b. reporting
,c. responsibilities. Answer: A
◉Materiality: Check all that apply
A. is part of the objective of the audit
B. recognizes auditors should focus on matters important to
financial statment users
C. Recognizes auditors do no expect account balances to be accuate
to the penny
D. is commonly established based on dollar amounts of key financial
statement subtotals. Answer: A,B.C
◉To obtain reasonable assurance the auditor must: Check all that
apply
A. identify and assess risks of material misstatements
B. obtain sufficient appropriate audit evidence
C. apply appropriate materiality levels throughout the audit
D. issue a modified opinion at the conclusion of the audit
E. plan to work and supervise assistants. Answer: A,B,C,E
◉The likelihood that an error or fraud will exist in the financial
statements prior to considering the auditors work is the risk of
____________________. Answer: material misstatement
,◉The chance that the audit team's substantive procedures will fail
to uncover a material misstatement is called _________ risk
A. appropriate
B. reliablity
c. Suffciency
D. detection. Answer: D
◉To be considered _________, evidence must be reliable and relevant.
Answer: appropriate
◉PCAOB auditing standards are subject to the formal approval of
the
A. Audition standards board
B. IRS
C. Sec
D. AICPA. Answer: C
◉Due Care:
A. expects auditors to be infallible
B. relates to auditor competence and capabilities
C. requires an appropraite level of professional skepticism
D. Reflects a resonable level of performance. Answer: B,C,D
, ◉Generally Accepted Auditing Standards (GAAS) Check all that
apply
A. guide the conduct of audit examinations
B. identify necessary qualifications and characteristics of auditors
C. only include pronouncements issued by the PCAOB
D. have a purpose to meet the objective of audit emainations.
Answer: A,B,D
◉The risk of material misstatement is a combination of ___________
risk and _______ risk. Answer: inherent and control
◉When an auditor is perceived to by others to be unbiased, the
possesses _________ in ________. Answer: indepence, appearance
◉Reasonable assurance is:
A. a high, but not absolute level of assurance
B. absolute level of assurance
C. based on what a typical investor would consider to be resonable.
Answer: A
◉When auditors confirm accounts receivables with customers ,
evidence is provided about the legitimacy of the sales, but does not
