Auditing and Attestation MCQs

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Which of the following is ordinarily considered to be a fraud risk factor?






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Which of the following statements best describes the primary purpose of Statements on Auditing Standards?






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Which of the following should an auditor obtain from the predecessor auditor prior to accepting an audit engagement?






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One reason that an auditor only obtains reasonable, and not absolute, assurance that financial statements are free from material misstatement is






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The auditors of a nonissuer (nonpublic) company must perform a test of the operating effectiveness of a significant control






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The independent auditor selects several transactions in each functional area and traces them through the entire system, paying special attention to ...






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In obtaining an understanding of a manufacturing entity’s internal control over inventory balances, an auditor most likely would






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Which of the following statements best describes the ethical standard of the profession pertaining to advertising and solicitation?






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Which is least likely to be a question asked of client personnel during a walk-through in an audit of the internal control of an issuer (public) com...






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An abnormal fluctuation in gross profit that might suggest the need for extended audit procedures for sales and inventories would most likely be ide...






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When auditing merchandise inventory at year-end, the auditor performs a purchase cutoff test to obtain evidence that






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An auditor who uses the work of a specialist may refer to and identify the specialist in the auditor’s report if the






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Which of the following statements concerning audit evidence is correct?






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Burrow & Co., CPAs, have provided annual audit and tax compliance services to Mare Corp. for several years. Mare has been unable to pay Burrow in fu...






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A note to the financial statements of the First Security Bank indicates that all of the records relating to the bank’s business operations are sto...






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A company has changed its method of inventory valuation from an unacceptable one to one in conformity with generally accepted accounting principles....






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When an auditor reissues in 20X7 the auditor’s report on the 20X5 financial statements at the request of the client without revising the 20X5 word...






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Which of the following is not a covered member for purposes of application of the independence requirements of the AICPA Code of Professional Conduc...






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Accounting control procedures within computer processing may leave no visible evidence indicating that the procedures were performed. In such instan...






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Which is least likely to be a response when an auditor has obtained evidence indicating a risk of material misstatement in the area of inventory?






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Confirmations of accounts receivable address which assertion most directly?






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Which of the following is always present in an attestation engagement?






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Which of the following is not typically performed when accountants are performing a review of the financial statements of a nonissuer?






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If information is for management’s use only, which of the following forms of CPA association with financial information is most likely to result i...






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A CPA who is not independent may perform which of the following services for a nonissuer company? . .Compilation . .Review






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When performing a review of an issuer company, which is least likely to be included in the CPA’s inquires of management members with responsibilit...






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An advantage of using statistical over nonstatistical sampling methods in tests of controls is that the statistical methods






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An advantage of statistical sampling over nonstatistical sampling is that statistical sampling helps an auditor to






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The likelihood of assessing control risk too high is the risk that the sample selected to test controls






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The risk of incorrect acceptance and the likelihood of assessing control risk too low relate to the






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Which of the following best illustrates the concept of sampling risk?






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In assessing sampling risk, the risk of incorrect rejection and the risk of assessing control risk too high relate to the






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While performing a test of details during an audit, an auditor determined that the sample results supported the conclusion that the recorded account...






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The size of a sample designed for dual-purpose testing should be






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The expected population deviation rate of client billing errors is 3%. The auditor has established a tolerable rate of 5%. In the review of client i...






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The expected population deviation rate of client billing errors is 3%. The auditor has established a tolerable rate of 5%. In the review of client i...






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Which of the following sampling methods would be used to estimate a numerical measurement of a population, such as a dollar value? a. b. c. d.






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For which of the following audit tests would an auditor most likely use attribute sampling?






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An underlying feature of random-based selection of items is that each






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Which of the following statistical selection techniques is least desirable for use by an auditor?






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Which of the following statistical sampling plans does not use a fixed sample size for tests of controls?






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If certain forms are not consecutively numbered






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When performing a test of a control with respect to control over cash receipts, an auditor may use a systematic sampling technique with a start at a...






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What is the primary objective of using stratification as a sampling method in auditing?






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As a result of tests of controls, an auditor assessed control risk too low and decreased substantive testing. This assessment occurred because the t...






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Which of the following statements is correct concerning statistical sampling in tests of controls?






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In determining the sample size for a test of controls, an auditor should consider the likely rate of deviations, the allowable risk of assessing con...






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An auditor is testing internal control procedures that are evidenced on an entity’s vouchers by matching random numbers with voucher numbers. If a...






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An auditor plans to examine a sample of twenty purchase orders for proper approvals as prescribed by the client’s control procedures. One of the p...






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When assessing the tolerable rate, the auditor should consider that, while deviations from control procedures increase the risk of material misstate...






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The objective of the tolerable rate in sampling for tests of controls of internal control is to






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The tolerable rate of deviations for a test of a control is generally






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If the auditor is concerned that a population may contain exceptions, the determination of a sample size sufficient to include at least one such exc...






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In determining the number of documents to select for a test to obtain assurance that all sales have been properly authorized, an auditor should cons...






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Which of the following statements is correct concerning statistical sampling in tests of controls?






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What is an auditor’s evaluation of a statistical sample for attributes when a test of fifty documents results in three deviations if tolerable rat...






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An auditor desired to test credit approval on 10,000 sales invoices processed during the year. The auditor designed a statistical sample that would ...






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An auditor desired to test credit approval on 10,000 sales invoices processed during the year. The auditor designed a statistical sample that would ...






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Which of the following statements is correct concerning statistical sampling in tests of controls?






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When an auditor has chosen a random sample and is using nonstatistical attributes sampling, that auditor






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Which of the following courses of action would an auditor most likely follow in planning a sample of cash disbursements if the auditor is aware of sev...






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When planning a sample for a substantive test of details, an auditor should consider tolerable misstatement for the sample. This consideration shoul...






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A number of factors influences the sample size for a substantive test of details of an account balance. All other factors being equal, which of the ...






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In estimation sampling for variables, which of the following must be known in order to estimate the appropriate sample size required to meet the aud...






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An auditor established a $60,000 tolerable misstatement for an asset with an account balance of $1,000,000. The auditor selected a sample of every t...






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Which of the following statements is correct concerning probability-proportional-to-size (PPS) sampling, also known as dollar unit sampling?






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In a probability-proportional-to-size sample with a sampling interval of $5,000, an auditor discovered that a selected account receivable with a rec...






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In statistical sampling methods used in substantive testing, an auditor most likely would stratify a population into meaningful groups if






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The use of the ratio estimation sampling technique is most effective when






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In the application of statistical techniques to the estimation of dollar amounts, a preliminary sample is usually taken primarily for the purpose of...






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Use of the ratio estimation sampling technique to estimated dollar amounts is inappropriate when






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An auditor is performing substantive tests of pricing and extensions of perpetual inventory balances consisting of a large number of items. Past exp...






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The major reason that the difference and ratio estimation methods would be expected to produce audit efficiency is that the






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Which of the following statements is correct concerning the auditor’s use of statistical sampling?






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Which of the following most likely would be an advantage in using classical variables sampling rather than probability proportional- to-size (PPS) s...






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A flowchart is most frequently used by an auditor in connection with the






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Matthews Corp. has changed from a system of recording time worked on clock cards to a computerized payroll system in which employees record time in ...






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Which of the following is correct concerning batch processing of transactions?






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An auditor would be most likely to assess control risk at the maximum level in an electronic environment with automated system-generated information...






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In a highly automated information processing system tests of control






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Which of the following is least likely to be considered by an auditor considering engagement of an information technology (IT) specialist on an audi...






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Which of the following strategies would a CPA most likely consider in auditing an entity that processes most of its financial data only in electroni...






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Which of the following is not a major reason for maintaining an audit trail for a computer system?






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Computer systems are typically supported by a variety of utility software packages that are important to an auditor because they






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An auditor would most likely be concerned with which of the following controls in a distributed data processing system?






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Which of the following types of evidence would an auditor most likely examine to determine whether internal control is operating as designed?






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An auditor anticipates assessing control risk at a low level in a computerized environment. Under these circumstances, on which of the following act...






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After the preliminary phase of the review of a client’s computer controls, an auditor may decide not to perform tests of controls related to the c...






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Auditing by testing the input and output of a computer system instead of the computer program itself will






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Which of the following client information technology (IT) systems generally can be audited without examining or directly testing the IT computer pro...






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An auditor who wishes to capture an entity’s data as transactions are processed and continuously test the entity’s computerized information syst...






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Which of the following computer-assisted auditing techniques processes client input data on a controlled program under the auditor’s control to te...






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To obtain evidence that online access controls are properly functioning, an auditor most likely would






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An auditor most likely would introduce test data into a computerized payroll system to test controls related to the






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When an auditor tests a computerized accounting system, which of the following is true of the test data approach?






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Which of the following is not among the errors that an auditor might include in the test data when auditing a client’s computer system?






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Which of the following computer-assisted auditing techniques allows fictitious and real transactions to be processed together without client operati...






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Which of the following methods of testing application controls utilizes a generalized audit software package prepared by the auditors?






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In creating lead schedules for an audit engagement, a CPA often uses automated workpaper software. What client information is needed to begin this p...






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Using microcomputers in auditing may affect the methods used to review the work of staff assistants because