ADVANCED AUDIT EXAM: A+ GRADED GUIDE WITH THE LATEST
KEY QUESTIONS AND ANSWERS.
When an auditor of a parent non issuer is also the auditor of a component, then
each of the following factors would ordinarily influence the decision to obtain a
separate engagement letter from the component, except...
Whether there has been any turnover of the component's board members
An auditor is required to establish an understanding in writing with a client
regarding the services to be performed for each engagement. This understanding
generally includes...
The auditor's responsibility for ensuring that the audit committee is aware of any
significant deficiencies or material weaknesses in control that come to the auditor's
attention
In assessing whether to accept a client for an audit engagement, a CPA should
consider the...
a) Client's Business Risk
b) CPA's Business Risk
a) YES
b) YES
Which of the following circumstances would permit an independent auditor to
accept an engagement after the close of the fiscal year?
Remedy of limitations resulting from accepting the engagement after the close of the
end of the year, such as those relating to the existence of physical inventory
Which of the following statements would least likely appear in an auditor's
engagement letter?
After performing our preliminary analytical procedures, we will discuss with you the
other procedures we consider necessary to complete the engagement.
Which of the following factors most likely would cause a CPA to decide not to
accept a new audit engagement?
Management's disregard of its responsibility to maintain an adequate internal control
environment.
,Which of the following factors most likely would cause a CPA to not accept a new
audit engagement?
The prospective client is unwilling to make all financial records available to the CPA
An auditor's engagement letter most likely would include a statement that...
Limits the auditor's responsibility to detect fraud and error
Which of the following factors does a CPA ordinarily consider in the planning
stage of an audit engagement?
a) Financial statement accounts likely to contain a misstatement.
b) Conditions that require extension of audit tests.
Both a) and b)
During the initial planning phase of an audit, a CPA most likely would...
Discuss the timing of the audit procedures with the client's management
The audit plan usually cannot be finalized until the...
Understanding of the entity and its environment has been completed
Audit plans should be designed so that...
The audit evidence gathered supports the auditor's conclusions
The understanding with the client regarding a financial statement audit generally
includes which of the following matters?
The responsibilities of the auditor
In developing written audit plans, an auditor should design specific audit
procedures that relate primarily to the...
Financial statement assertions
Before accepting an engagement to audit a new client, a CPA is required to
obtain...
The prospective client's consent to make inquiries of the predecessor, if any
With respect to the auditor's planning of a year-end audit, which of the following
statements is always true?
It is an acceptable practice to carry out part of the audit at interim dates
Prior to the audit, an auditor usually discusses the overall audit strategy with the
client's management. Which of the following matters do the auditor and
management agree upon at this time?
, The coordination of the assistance of the client's personnel in data preparation
A CPA is conducting the first audit of a nonissuer's financial statements. The
CPA hopes to reduce the audit work by consulting with the predecessor auditor
and reviewing the predecessor's audit documentation. This procedure is...
Acceptable if the client and the predecessor auditor agree to it
Which of the following is an auditor least likely to perform in planning a financial
statement audit?
Selecting a sample of vendors' invoices for comparison with receiving reports
Before accepting an engagement to audit a new client, an auditor is required to...
Make inquiries of the predecessor auditor after obtaining the consent of the prospective
client
Upon discovering fraudulent data in a client's tax return that the client would not
correct, a CPA withdraws from the engagement. How should the CPA respond if
asked by the successor CPA why the relationship was terminated?
"I suggest you get the client's permission for us to discuss all matters freely."
Audit plans are modified to suit the circumstances of particular engagements. A
complete audit plan for an engagement usually should be developed...
After the auditor has obtained an understanding of existing internal control
Which of the following procedures would an auditor most likely include in the
initial planning of a financial statement audit?
Determining the extent of involvement of the client's internal auditors
Which of the following would a successor auditor ask the predecessor auditor to
provide after accepting an audit engagement?
Matters that may facilitate the evaluation of financial reporting consistency between the
current and prior years
In addition to descriptions of the nature, timing, and extent of planned risk
assessment procedures and planned further audit procedures, which of the
following additional pieces of information should be documented in the audit
plan?
Other audit procedures to be performed to comply with generally accepted auditing
standards
KEY QUESTIONS AND ANSWERS.
When an auditor of a parent non issuer is also the auditor of a component, then
each of the following factors would ordinarily influence the decision to obtain a
separate engagement letter from the component, except...
Whether there has been any turnover of the component's board members
An auditor is required to establish an understanding in writing with a client
regarding the services to be performed for each engagement. This understanding
generally includes...
The auditor's responsibility for ensuring that the audit committee is aware of any
significant deficiencies or material weaknesses in control that come to the auditor's
attention
In assessing whether to accept a client for an audit engagement, a CPA should
consider the...
a) Client's Business Risk
b) CPA's Business Risk
a) YES
b) YES
Which of the following circumstances would permit an independent auditor to
accept an engagement after the close of the fiscal year?
Remedy of limitations resulting from accepting the engagement after the close of the
end of the year, such as those relating to the existence of physical inventory
Which of the following statements would least likely appear in an auditor's
engagement letter?
After performing our preliminary analytical procedures, we will discuss with you the
other procedures we consider necessary to complete the engagement.
Which of the following factors most likely would cause a CPA to decide not to
accept a new audit engagement?
Management's disregard of its responsibility to maintain an adequate internal control
environment.
,Which of the following factors most likely would cause a CPA to not accept a new
audit engagement?
The prospective client is unwilling to make all financial records available to the CPA
An auditor's engagement letter most likely would include a statement that...
Limits the auditor's responsibility to detect fraud and error
Which of the following factors does a CPA ordinarily consider in the planning
stage of an audit engagement?
a) Financial statement accounts likely to contain a misstatement.
b) Conditions that require extension of audit tests.
Both a) and b)
During the initial planning phase of an audit, a CPA most likely would...
Discuss the timing of the audit procedures with the client's management
The audit plan usually cannot be finalized until the...
Understanding of the entity and its environment has been completed
Audit plans should be designed so that...
The audit evidence gathered supports the auditor's conclusions
The understanding with the client regarding a financial statement audit generally
includes which of the following matters?
The responsibilities of the auditor
In developing written audit plans, an auditor should design specific audit
procedures that relate primarily to the...
Financial statement assertions
Before accepting an engagement to audit a new client, a CPA is required to
obtain...
The prospective client's consent to make inquiries of the predecessor, if any
With respect to the auditor's planning of a year-end audit, which of the following
statements is always true?
It is an acceptable practice to carry out part of the audit at interim dates
Prior to the audit, an auditor usually discusses the overall audit strategy with the
client's management. Which of the following matters do the auditor and
management agree upon at this time?
, The coordination of the assistance of the client's personnel in data preparation
A CPA is conducting the first audit of a nonissuer's financial statements. The
CPA hopes to reduce the audit work by consulting with the predecessor auditor
and reviewing the predecessor's audit documentation. This procedure is...
Acceptable if the client and the predecessor auditor agree to it
Which of the following is an auditor least likely to perform in planning a financial
statement audit?
Selecting a sample of vendors' invoices for comparison with receiving reports
Before accepting an engagement to audit a new client, an auditor is required to...
Make inquiries of the predecessor auditor after obtaining the consent of the prospective
client
Upon discovering fraudulent data in a client's tax return that the client would not
correct, a CPA withdraws from the engagement. How should the CPA respond if
asked by the successor CPA why the relationship was terminated?
"I suggest you get the client's permission for us to discuss all matters freely."
Audit plans are modified to suit the circumstances of particular engagements. A
complete audit plan for an engagement usually should be developed...
After the auditor has obtained an understanding of existing internal control
Which of the following procedures would an auditor most likely include in the
initial planning of a financial statement audit?
Determining the extent of involvement of the client's internal auditors
Which of the following would a successor auditor ask the predecessor auditor to
provide after accepting an audit engagement?
Matters that may facilitate the evaluation of financial reporting consistency between the
current and prior years
In addition to descriptions of the nature, timing, and extent of planned risk
assessment procedures and planned further audit procedures, which of the
following additional pieces of information should be documented in the audit
plan?
Other audit procedures to be performed to comply with generally accepted auditing
standards
