ACC 409 (14) EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS GRADED A++ LATEST UPDATE
Most audit firms use a schedule to accumulate the known and projected
misstatements and the carryover effects of prior-year uncorrected misstatements.
Which of the following statements regarding this process is false?
C. Tax effects are not shown on schedules of correcting errors.
During the course of an audit, misstatements that are individually immaterial may
be detected. What should the auditor do with these?
C. Accumulate all of the known and projected misstatements to determine if the impact
is material in the aggregate
Which of the following is one of the most important drivers of audit quality in
cases where an auditor may feel some pressure to acquiesce to management's
demands to not require that misstatements be corrected in order to preserve a
harmonious working relationship?
A. Firm culture.
Which of the following would be considered "the nature of a misstatement" that
might make it material?
D. Having the effect of changing a positive earnings trend to a negative earnings trend.
An audit firm culture that emphasizes "doing the right thing" does not
incorporate which of the following to enhance audit quality?
, . Yielding to management's demands in order to promote additional service
engagements.
. Which of the following are categories that do not reflect the contingent nature of
losses and the guiding criteria organized around probability of outcomes as
provided by the FASB?
A. Guaranteed.
Which of the following types of information is not a type of evidence that the
auditor should obtain concerning contingencies?
C. Accounts receivable confirmations.
Which of the following items does the auditor ask the client to send to its legal
counsel requesting information about asserted claims?
A. A letter of audit inquiry.
Which of the following items is not typically requested from the lawyer of a
company regarding contingencies?
B. Information about the attorney's other clients with similar contingencies.
When responding to the auditor as a result of the audit client's letter of inquiry,
how might the attorney limit the response?
C. Limit the response to matters to which the attorney has given substantive attention in
the form of legal consultation or representation.
Which of the following parties has the responsibility for designing and
maintaining policies and procedures to identify, evaluate, and account for
contingencies?
A. Management.
COMPLETE SOLUTIONS GRADED A++ LATEST UPDATE
Most audit firms use a schedule to accumulate the known and projected
misstatements and the carryover effects of prior-year uncorrected misstatements.
Which of the following statements regarding this process is false?
C. Tax effects are not shown on schedules of correcting errors.
During the course of an audit, misstatements that are individually immaterial may
be detected. What should the auditor do with these?
C. Accumulate all of the known and projected misstatements to determine if the impact
is material in the aggregate
Which of the following is one of the most important drivers of audit quality in
cases where an auditor may feel some pressure to acquiesce to management's
demands to not require that misstatements be corrected in order to preserve a
harmonious working relationship?
A. Firm culture.
Which of the following would be considered "the nature of a misstatement" that
might make it material?
D. Having the effect of changing a positive earnings trend to a negative earnings trend.
An audit firm culture that emphasizes "doing the right thing" does not
incorporate which of the following to enhance audit quality?
, . Yielding to management's demands in order to promote additional service
engagements.
. Which of the following are categories that do not reflect the contingent nature of
losses and the guiding criteria organized around probability of outcomes as
provided by the FASB?
A. Guaranteed.
Which of the following types of information is not a type of evidence that the
auditor should obtain concerning contingencies?
C. Accounts receivable confirmations.
Which of the following items does the auditor ask the client to send to its legal
counsel requesting information about asserted claims?
A. A letter of audit inquiry.
Which of the following items is not typically requested from the lawyer of a
company regarding contingencies?
B. Information about the attorney's other clients with similar contingencies.
When responding to the auditor as a result of the audit client's letter of inquiry,
how might the attorney limit the response?
C. Limit the response to matters to which the attorney has given substantive attention in
the form of legal consultation or representation.
Which of the following parties has the responsibility for designing and
maintaining policies and procedures to identify, evaluate, and account for
contingencies?
A. Management.
