ACCT444 Week 3 Quiz Latest 2017

Question Question 1 3 / 3 pts (TCO 6) Physical examination is the inspection or count by the auditor of items such as cash or inventory only. cash, inventory, canceled checks, and sales documents. cash, inventory, canceled checks, and tangible fixed assets. cash, inventory, securities, notes receivable, and tangible fixed assets. Question 2 0 / 3 pts (TCO 6) Analytical procedures are diagnostic tests of financial information that may not be classified as evidential matter. calculations of financial information made by a computer. substantive tests of financial information made by a study and comparison of relationships among data. statistical tests of financial information designed to identify areas requiring intensive investigation. Question 3 3 / 3 pts (TCO 6) The Auditing Standards Board has concluded that analytical procedures are so important that they are required during planning and testing phases. planning and completion phases. testing and completion phases. planning, testing, and completion phases. Question 4 3 / 3 pts (TCO 6) Traditionally, confirmations are used to verify individual transactions between organizations, such as sales transactions. bank balances and accounts receivables. fixed asset additions. All of the above Question 5 3 / 3 pts (TCO 7) Analytical procedures used in planning an audit should focus on identifying material weaknesses of internal control. the predictability of financial data from individual transactions. the various assertions that are embodied in the financial statements. areas that may represent specific risks relevant to the audit. Question 6 0 / 3 pts (TCO 7) When inherent risk is high, there will need to be more evidence accumulated. more experienced staff assigned to the work. either a or b, but not both. both a and b. Question 7 3 / 3 pts (TCO 7) A successor auditor may perform which of the following for a new audit client? Speak to local attorneys, banks, and other businesses regarding the company's reputation Speak to the predecessor auditor about disagreements they had with management Interview client personnel to better understand the business and associated risks All of the above Question 8 3 / 3 pts (TCO 8) The preliminary judgment about materiality is the _____ amount by which the auditor believes the statements could be misstated and still not affect the decisions of reasonable users. minimum maximum mean average median average Question 9 0 / 3 pts (TCO 8) In setting materiality guidelines for current assets, the two standard setters, FASB and the AICPA, provide the following guidelines to practitioners Both agree that materiality should be set at an amount greater than 10% of current assets. FASB's guideline is greater than 10%, but the AICPA's is greater than 5%. Both agree that it should be greater than 5%. No specific materiality guidelines are provided by either of them. Question 10 0 / 3 pts (TCO 8) Which of the following elements ultimately determines the specific auditing procedures that are necessary in the circumstances to afford a reasonable basis for an opinion? Inherent risk Materiality Auditor judgment Reasonable assurance