BUS 404- AUDIT EXAM 1 WILEY
MULTIPLE CHOICE QUESTIONS AND
ANSWERS WITH VERIFIED SOLUTIONS
100% CORRECT RATED A+
Generally Accepted Auditing Standard (GAAS) are - ANSWER✔✔
Pronouncements issued by the Auditing Standards Board
Which of the following is MOST likely to be unique to the audit work of CPAs as
compared to work performed by practitioners of other professions? -
ANSWER✔✔ Independence
The PCAOB's standards require that due care is to be exercised in the performance
of an audit. This standard is ordinarily interpreted to require - ANSWER✔✔
Critical review of the judgement exercised at every level of supervision
According to the standards of the profession, which of the following circumstances
will prevent a CPA performing audit engagements from being independent? -
ANSWER✔✔ Employment of the CPA's spouse as a client's director of internal
audit.
According to the ethical standards of the profession, which of the following acts is
generally prohibited? - ANSWER✔✔ Retaining client records after and
engagement is terminated prior to completion and the client has demanded their
return
According to the standards of he profession, which of the following activities
would most likely not impair a CPA's independence? - ANSWER✔✔ Providing
advisory services for a client.
, According to the ethical standard's of the profession, which of the following acts is
generally prohibited? - ANSWER✔✔ Accepting a commission for recommending
a product to an audit client.
To exercise due professional care an auditor should - ANSWER✔✔ critically
review the judgement exercised by those assisting the audit.
Which of the following statements is correct regarding an accountant's working
papers? - ANSWER✔✔ The accountant owns the working papers but generally
may not disclose them without the client's consent or a court order.
As the acceptable level of detection risk decreases, an auditor may - ANSWER✔✔
postpone the planned timing of substantive tests from interim dates to the year-end
The risk that an auditor will conclude, based on substantive tests, that a material
misstatement does not exist in an account balance, when, in fact, such
misstatement does exist is referred to as - ANSWER✔✔ detection risk
As the acceptable level of detection risk decreases, the assurance directly provided
from - ANSWER✔✔ substantive tests should increase
Which of the following audit risk components may be assessed in nonquantitative
terms - ANSWER✔✔ Control risk- yes
detection risk-yes
inherent risk- yes
Inherent risk and control risk differ from detection risk in that they - ANSWER✔✔
exist independently of the financial statement audit
MULTIPLE CHOICE QUESTIONS AND
ANSWERS WITH VERIFIED SOLUTIONS
100% CORRECT RATED A+
Generally Accepted Auditing Standard (GAAS) are - ANSWER✔✔
Pronouncements issued by the Auditing Standards Board
Which of the following is MOST likely to be unique to the audit work of CPAs as
compared to work performed by practitioners of other professions? -
ANSWER✔✔ Independence
The PCAOB's standards require that due care is to be exercised in the performance
of an audit. This standard is ordinarily interpreted to require - ANSWER✔✔
Critical review of the judgement exercised at every level of supervision
According to the standards of the profession, which of the following circumstances
will prevent a CPA performing audit engagements from being independent? -
ANSWER✔✔ Employment of the CPA's spouse as a client's director of internal
audit.
According to the ethical standards of the profession, which of the following acts is
generally prohibited? - ANSWER✔✔ Retaining client records after and
engagement is terminated prior to completion and the client has demanded their
return
According to the standards of he profession, which of the following activities
would most likely not impair a CPA's independence? - ANSWER✔✔ Providing
advisory services for a client.
, According to the ethical standard's of the profession, which of the following acts is
generally prohibited? - ANSWER✔✔ Accepting a commission for recommending
a product to an audit client.
To exercise due professional care an auditor should - ANSWER✔✔ critically
review the judgement exercised by those assisting the audit.
Which of the following statements is correct regarding an accountant's working
papers? - ANSWER✔✔ The accountant owns the working papers but generally
may not disclose them without the client's consent or a court order.
As the acceptable level of detection risk decreases, an auditor may - ANSWER✔✔
postpone the planned timing of substantive tests from interim dates to the year-end
The risk that an auditor will conclude, based on substantive tests, that a material
misstatement does not exist in an account balance, when, in fact, such
misstatement does exist is referred to as - ANSWER✔✔ detection risk
As the acceptable level of detection risk decreases, the assurance directly provided
from - ANSWER✔✔ substantive tests should increase
Which of the following audit risk components may be assessed in nonquantitative
terms - ANSWER✔✔ Control risk- yes
detection risk-yes
inherent risk- yes
Inherent risk and control risk differ from detection risk in that they - ANSWER✔✔
exist independently of the financial statement audit
