Auditing A Risk Based Approach 11th- Edition
EXAM with questions and answers
Which of the following is not a procedure that an engagement quality reviewer would
perform?
a. Evaluating whether or not to continue providing audit services to the client in the
subsequent year, based on information gained during the current period audit.
b. Discussing significant matters related to the financial statements and internal
controls.
c. Evaluating judgments about materiality and the disposition of corrected and
uncorrected identified misstatements.
d. Reviewing the engagement team's evaluation of the firm's independence in relation to
the engagement. - CORRECT ANSWERA
Objective criteria for evaluating the quality of the client's accounting policies is not
available; assessing the quality, not just the acceptability of the significant accounting
policies is a matter or professional judgement. - CORRECT ANSWERTrue
One of the issues that the auditor is required to communicate to the audit committee is
the competence, training, and industry specialization of each of the highest ranking
members of the engagement team (the partner, manager, and audit senior). -
CORRECT ANSWERFalse
Which of the following is not a typical communication between the auditor and the audit
committee at the end of an audit engaWhich of the following is not a typical
communication between the auditor and the audit committee at the end of an audit
engagement?
a. Discussion of the auditor's responsibility.
b. Discussion of the client continuance decision.
c. Discussion about the auditor independence.
d. Discussion about the management judgments and accounting estimates.gement?
a. Discussion of the auditor's responsibility.
b. Discussion of the client continuance decision.
c. Discussion about the auditor independence.
, d. Discussion about the management judgments and accounting estimates. -
CORRECT ANSWER
With regard to discussing significant audit adjustments with the audit committee, which
of the following statements is false?
a. Significant audit adjustments reflect a lack of independence between the auditor and
client management.
a. The management letter is used to make significant operational or control
recommendations to management.
b. Many audit firms consider management's inattention to addressing comments in the
letter to be an important risk factor in subsequent-year audits.
c. The management letter is required for publicly traded companies in the United States,
but not privately held companies.
d. All of the above are false. - CORRECT ANSWERC
In Exhibit 14-8 which of the following items is not present in the management letter?
a. The auditor's observations and recommendations to management.
b. Management's response.
c. The issue of whether or how management responded to the management letter
related to the prior year's audit.
d. What actions the auditor will take in the subsequent-year audit to help management
address the identified weaknesses. - CORRECT ANSWERD
The term engagement quality review and concurring partner review are synonymous. -
CORRECT ANSWERTrue
An engagement quality review is required for publicly traded companies, and is optional
for privately held company audits. - CORRECT ANSWERTrue
Which of the following statements is false concerning engagement quality reviews?
a. The purpose of the engagement quality review is to provide reasonable assurance
that the audit and audit documentation are complete and that they support the audit
opinion on the financial statements.
b. The engagement quality review must be documented, and the documentation should
include who performed the review, which documents were reviewed, and the date the
engagement quality reviewer provided approval of the issuance of the audit opinion.
EXAM with questions and answers
Which of the following is not a procedure that an engagement quality reviewer would
perform?
a. Evaluating whether or not to continue providing audit services to the client in the
subsequent year, based on information gained during the current period audit.
b. Discussing significant matters related to the financial statements and internal
controls.
c. Evaluating judgments about materiality and the disposition of corrected and
uncorrected identified misstatements.
d. Reviewing the engagement team's evaluation of the firm's independence in relation to
the engagement. - CORRECT ANSWERA
Objective criteria for evaluating the quality of the client's accounting policies is not
available; assessing the quality, not just the acceptability of the significant accounting
policies is a matter or professional judgement. - CORRECT ANSWERTrue
One of the issues that the auditor is required to communicate to the audit committee is
the competence, training, and industry specialization of each of the highest ranking
members of the engagement team (the partner, manager, and audit senior). -
CORRECT ANSWERFalse
Which of the following is not a typical communication between the auditor and the audit
committee at the end of an audit engaWhich of the following is not a typical
communication between the auditor and the audit committee at the end of an audit
engagement?
a. Discussion of the auditor's responsibility.
b. Discussion of the client continuance decision.
c. Discussion about the auditor independence.
d. Discussion about the management judgments and accounting estimates.gement?
a. Discussion of the auditor's responsibility.
b. Discussion of the client continuance decision.
c. Discussion about the auditor independence.
, d. Discussion about the management judgments and accounting estimates. -
CORRECT ANSWER
With regard to discussing significant audit adjustments with the audit committee, which
of the following statements is false?
a. Significant audit adjustments reflect a lack of independence between the auditor and
client management.
a. The management letter is used to make significant operational or control
recommendations to management.
b. Many audit firms consider management's inattention to addressing comments in the
letter to be an important risk factor in subsequent-year audits.
c. The management letter is required for publicly traded companies in the United States,
but not privately held companies.
d. All of the above are false. - CORRECT ANSWERC
In Exhibit 14-8 which of the following items is not present in the management letter?
a. The auditor's observations and recommendations to management.
b. Management's response.
c. The issue of whether or how management responded to the management letter
related to the prior year's audit.
d. What actions the auditor will take in the subsequent-year audit to help management
address the identified weaknesses. - CORRECT ANSWERD
The term engagement quality review and concurring partner review are synonymous. -
CORRECT ANSWERTrue
An engagement quality review is required for publicly traded companies, and is optional
for privately held company audits. - CORRECT ANSWERTrue
Which of the following statements is false concerning engagement quality reviews?
a. The purpose of the engagement quality review is to provide reasonable assurance
that the audit and audit documentation are complete and that they support the audit
opinion on the financial statements.
b. The engagement quality review must be documented, and the documentation should
include who performed the review, which documents were reviewed, and the date the
engagement quality reviewer provided approval of the issuance of the audit opinion.
