Act 235 NCC Frequently Tested 2026-2027
Exam Questions With Verified Multiple
Choice and Conceptual Actual 100% Correct
Detailed Answers
Guaranteed Pass!!Current Update!!
1. When initiating communications with predecessor auditors, prospective
auditors should expect:
A. To take responsibility for obtaining the client's consent for the predecessor to
give information about prior audits.
B. To conduct interviews with the partner and manager in charge of the
predecessor public accounting firm's engagement.
C. To obtain copies of some or all of the predecessor auditors' audit
documentation.
D. All of the above.
Correct Answer - ANSWER D
2. Generally accepted auditing standards require that auditors always prepare
and use:
A. A written planning memorandum explaining the auditors' understanding of he
client's business.
B. A written client consent to discuss audit matters with prospective auditors.
,C. A written audit plan.
D. The written time budgets and schedules for performing each audit.
Correct Answer - ANSWER C
- Audit plan gives step by step plans.
- Audit work papers are where you write down what you did.
3. When planning an audit, which of the following is not a factor that affects
auditors' decisions about the quantity, type, and content of audit documentation?
A. The auditors' need to document compliance with generally accepted auditing
standards.
B. The existence of new sales contracts important for the client's business.
C. The auditors' judgment about their independence with regard to the client.
D. The auditors' judgments about materiality.
Correct Answer - ANSWER C
- If they aren't independent, then they shouldn't be doing the audit.
4. Audit documentation that shows the detailed evidence and procedures
regarding the balance in the accumulated depreciation account for the year under
audit will be found in the:
A. Current file audit documentation.
B. Permanent file audit documentation.
C. Administrative audit documentation in the current file.
,D. Planning memorandum in the current file.
Correct Answer - ANSWER A
5. An auditor's permanent file audit documentation most likely will contain:
A. Internal control analysis for the current year.
B. The most recent engagement letter.
C. Memoranda of conference with management.
D. Excerpts of the corporate charter and bylaws.
Correct Answer - ANSWER D
- Corporate charter doesn't change much.
6. Which of the following is not a benefit claimed for the practice of determining
materiality in the initial planning stage of an audit?
A. Being able to fine-tune the audit work for effectiveness and efficiency.
B. Avoiding the problem of doing more work than necessary (overauditing).
C. Being able to decide early what type of audit opinion to issue.
D. Avoiding the problem of doing too little work (underauditing).
Correct Answer - ANSWER C
7. Spreadsheet software would be most useful for which of the following audit
activities?
, A. Testing internal controls over computerized accounting applications.
B. Preparing an audit plan.
C. Preparing a comparison of current-year expenses with those from the previous
year.
D. Drafting a planning memorandum.
Correct Answer - ANSWER C
8. Which of the following is an advantage of computer-assisted audit techniques
(CAATs)?
A. The CAAT's programs are all written in one computer language.
B. The software can be used for audits of clients that sue differing computer
equipment and file formats.
C. The use of CAAT's has reduced the need for the auditor to study input controls
for computer-related procedures.
D. The use of CAAT's can be substituted for a relatively large part of the required
testing.
Correct Answer - ANSWER B
8. A primary advantage of using CAAT's in the audit of an advanced computerized
system is that it enables the auditor to:
A. substantiate the accuracy of data through self-checking digits and hash totals.
B. Utilize the speed and accuracy of the computer.
Exam Questions With Verified Multiple
Choice and Conceptual Actual 100% Correct
Detailed Answers
Guaranteed Pass!!Current Update!!
1. When initiating communications with predecessor auditors, prospective
auditors should expect:
A. To take responsibility for obtaining the client's consent for the predecessor to
give information about prior audits.
B. To conduct interviews with the partner and manager in charge of the
predecessor public accounting firm's engagement.
C. To obtain copies of some or all of the predecessor auditors' audit
documentation.
D. All of the above.
Correct Answer - ANSWER D
2. Generally accepted auditing standards require that auditors always prepare
and use:
A. A written planning memorandum explaining the auditors' understanding of he
client's business.
B. A written client consent to discuss audit matters with prospective auditors.
,C. A written audit plan.
D. The written time budgets and schedules for performing each audit.
Correct Answer - ANSWER C
- Audit plan gives step by step plans.
- Audit work papers are where you write down what you did.
3. When planning an audit, which of the following is not a factor that affects
auditors' decisions about the quantity, type, and content of audit documentation?
A. The auditors' need to document compliance with generally accepted auditing
standards.
B. The existence of new sales contracts important for the client's business.
C. The auditors' judgment about their independence with regard to the client.
D. The auditors' judgments about materiality.
Correct Answer - ANSWER C
- If they aren't independent, then they shouldn't be doing the audit.
4. Audit documentation that shows the detailed evidence and procedures
regarding the balance in the accumulated depreciation account for the year under
audit will be found in the:
A. Current file audit documentation.
B. Permanent file audit documentation.
C. Administrative audit documentation in the current file.
,D. Planning memorandum in the current file.
Correct Answer - ANSWER A
5. An auditor's permanent file audit documentation most likely will contain:
A. Internal control analysis for the current year.
B. The most recent engagement letter.
C. Memoranda of conference with management.
D. Excerpts of the corporate charter and bylaws.
Correct Answer - ANSWER D
- Corporate charter doesn't change much.
6. Which of the following is not a benefit claimed for the practice of determining
materiality in the initial planning stage of an audit?
A. Being able to fine-tune the audit work for effectiveness and efficiency.
B. Avoiding the problem of doing more work than necessary (overauditing).
C. Being able to decide early what type of audit opinion to issue.
D. Avoiding the problem of doing too little work (underauditing).
Correct Answer - ANSWER C
7. Spreadsheet software would be most useful for which of the following audit
activities?
, A. Testing internal controls over computerized accounting applications.
B. Preparing an audit plan.
C. Preparing a comparison of current-year expenses with those from the previous
year.
D. Drafting a planning memorandum.
Correct Answer - ANSWER C
8. Which of the following is an advantage of computer-assisted audit techniques
(CAATs)?
A. The CAAT's programs are all written in one computer language.
B. The software can be used for audits of clients that sue differing computer
equipment and file formats.
C. The use of CAAT's has reduced the need for the auditor to study input controls
for computer-related procedures.
D. The use of CAAT's can be substituted for a relatively large part of the required
testing.
Correct Answer - ANSWER B
8. A primary advantage of using CAAT's in the audit of an advanced computerized
system is that it enables the auditor to:
A. substantiate the accuracy of data through self-checking digits and hash totals.
B. Utilize the speed and accuracy of the computer.
