ACCT 401 - Chapter 6 Quiz fully
solved & updated
You have been hired to perform the audit of Hanmei, Inc.'s financial
statements. When planning such an audit, you often may need to
access the profession's auditing standards to perform research. For
each of the following circumstances, select the topic most closely
related in the Professional Standards Topics below. A topic may be
selected once, more than once, or not at all.
Professional Standards Topics:
1. Analytical procedures
2. Materiality in planning and performing an audit
3. Consideration of fraud in a financial statement audit
4. Understanding the entity and its environment and assessing the
risks of material misstatement
5. Consideration of laws and regulations
6. Management representations
7. Related parties
Transactions:
a. Possible risk factors related to misappropriation of assets.
b. The relationship between materiality used for planning versus
evaluation purposes.
c. Hanmei, Inc., has trans - answer a. Consideration of fraud in a
financial statement audit
b. Materiality in planning and performing an audit
c. Related parties
d. Analytical procedures
e. Consideration of laws and regulations
, f. Consideration of fraud in a financial statement audit
g. Understanding the entity and its environment and assessing the
risks of material misstatement
h. Consideration of fraud in a financial statement audit
Which of the following conditions identified during the audit
increases the risk of employee fraud?
A. Inventory items of small size, but high value.
B. Existence of a mandatory vacation policy for employees
performing key functions.
C. Presence of reconciling items on a client prepared year-end proof
of cash.
D. Large amounts of cash in the bank. - answer A. Inventory items of
small size, but high value.
Which of the following factors would most likely cause a CPA to
decide not to accept a new audit engagement?
A. Lack of understanding of the potential client's internal auditors'
computer-assisted audit techniques.
B. The existence of related party transactions.
C. Management's attempt to meet earnings per share growth rate
goals.
D. Management's disregard for internal control. - answer D.
Management's disregard for internal control.
A form filed with the SEC when a company changes auditors is a:
A. Form 8-K.
B. Form B-1.
solved & updated
You have been hired to perform the audit of Hanmei, Inc.'s financial
statements. When planning such an audit, you often may need to
access the profession's auditing standards to perform research. For
each of the following circumstances, select the topic most closely
related in the Professional Standards Topics below. A topic may be
selected once, more than once, or not at all.
Professional Standards Topics:
1. Analytical procedures
2. Materiality in planning and performing an audit
3. Consideration of fraud in a financial statement audit
4. Understanding the entity and its environment and assessing the
risks of material misstatement
5. Consideration of laws and regulations
6. Management representations
7. Related parties
Transactions:
a. Possible risk factors related to misappropriation of assets.
b. The relationship between materiality used for planning versus
evaluation purposes.
c. Hanmei, Inc., has trans - answer a. Consideration of fraud in a
financial statement audit
b. Materiality in planning and performing an audit
c. Related parties
d. Analytical procedures
e. Consideration of laws and regulations
, f. Consideration of fraud in a financial statement audit
g. Understanding the entity and its environment and assessing the
risks of material misstatement
h. Consideration of fraud in a financial statement audit
Which of the following conditions identified during the audit
increases the risk of employee fraud?
A. Inventory items of small size, but high value.
B. Existence of a mandatory vacation policy for employees
performing key functions.
C. Presence of reconciling items on a client prepared year-end proof
of cash.
D. Large amounts of cash in the bank. - answer A. Inventory items of
small size, but high value.
Which of the following factors would most likely cause a CPA to
decide not to accept a new audit engagement?
A. Lack of understanding of the potential client's internal auditors'
computer-assisted audit techniques.
B. The existence of related party transactions.
C. Management's attempt to meet earnings per share growth rate
goals.
D. Management's disregard for internal control. - answer D.
Management's disregard for internal control.
A form filed with the SEC when a company changes auditors is a:
A. Form 8-K.
B. Form B-1.
