ACCT 4332 FINAL REVIEW PAPER 2026
COMPLETE QUESTIONS AND SOLUTIONS
GRADED A+
◉True or False: auditors can read business periodicals and
textbooks to help obtain an understanding of a clients business.
Answer: True
◉A list of the procedures auditors need to perform to gather
sufficient appropriate evidence on which to base their opinion on
the financial statements is a(n) _________. Answer: audit plan
◉True of false: Any information that permits auditors to reach valid
logical conclusions can be considered evidence. Answer: True
◉To be considered __________ evidence must be reliable and relevant.
Answer: appropriate
◉Reasonable assurance. Check all that apply
A. requires audit procedures to limit the overall risk to a moderate
level
,B. Recognizes a GAAS audit may not detect all material
misstatements
C.requires auditors to consider varios material misstatement risks
D. recognizes auditors cannot provide a high level of assurance
regarding their work. Answer: B,C
◉Pressures to keep audit fees low and the desire to achieve high
levels of client satisfaction present challenges for auditors
maintaining appropriate levels of ____________. Answer: professional
skepticism
◉Policies and procedures implemented to prevent or detect
material accounting frauds and errors and provide for timely
correction is the definition of ___________. Answer: internal control
◉The risk assessment process requires an understanding of: Check
all that apply
A. the client but not the clients industry
B. internal controls in the accounting information system
C. the clients operation environment. Answer: B,C
◉Substantive procedures are: check all that apply
A. unnecessary when the risk of material misstatement is low
B. used to obtain evidence about account balances
, C. reflected in the determination of detection risk. Answer: B,C
◉The most reliable evidence is.
A. internal evidence
B. direct personal knowledge
C. external evidence. Answer: B
◉The concept of __________ recognizes that auditors are not "insures"
or "guarantors" regarding the fairness of the entity's financial
statements. Answer: reasonable assurance
◉Auditors are expected to be unbiased and impartial with respect to
information they audit which is referred to as independence in
A. appearance
B. Fact
C. actions. Answer: B
◉PCAOB inspections are conducted on an annual basis for:
A. firms performing audits of more than 100 public entities
B. firms performing audits of less than 100 public entities
C. firms that have had substandard work identified in previous
inspections
D. all firms that audit public entities. Answer: A
COMPLETE QUESTIONS AND SOLUTIONS
GRADED A+
◉True or False: auditors can read business periodicals and
textbooks to help obtain an understanding of a clients business.
Answer: True
◉A list of the procedures auditors need to perform to gather
sufficient appropriate evidence on which to base their opinion on
the financial statements is a(n) _________. Answer: audit plan
◉True of false: Any information that permits auditors to reach valid
logical conclusions can be considered evidence. Answer: True
◉To be considered __________ evidence must be reliable and relevant.
Answer: appropriate
◉Reasonable assurance. Check all that apply
A. requires audit procedures to limit the overall risk to a moderate
level
,B. Recognizes a GAAS audit may not detect all material
misstatements
C.requires auditors to consider varios material misstatement risks
D. recognizes auditors cannot provide a high level of assurance
regarding their work. Answer: B,C
◉Pressures to keep audit fees low and the desire to achieve high
levels of client satisfaction present challenges for auditors
maintaining appropriate levels of ____________. Answer: professional
skepticism
◉Policies and procedures implemented to prevent or detect
material accounting frauds and errors and provide for timely
correction is the definition of ___________. Answer: internal control
◉The risk assessment process requires an understanding of: Check
all that apply
A. the client but not the clients industry
B. internal controls in the accounting information system
C. the clients operation environment. Answer: B,C
◉Substantive procedures are: check all that apply
A. unnecessary when the risk of material misstatement is low
B. used to obtain evidence about account balances
, C. reflected in the determination of detection risk. Answer: B,C
◉The most reliable evidence is.
A. internal evidence
B. direct personal knowledge
C. external evidence. Answer: B
◉The concept of __________ recognizes that auditors are not "insures"
or "guarantors" regarding the fairness of the entity's financial
statements. Answer: reasonable assurance
◉Auditors are expected to be unbiased and impartial with respect to
information they audit which is referred to as independence in
A. appearance
B. Fact
C. actions. Answer: B
◉PCAOB inspections are conducted on an annual basis for:
A. firms performing audits of more than 100 public entities
B. firms performing audits of less than 100 public entities
C. firms that have had substandard work identified in previous
inspections
D. all firms that audit public entities. Answer: A
