Auditing standards require a public accountant to issue a report on the financial statements when the public accountant’s name is associated with the financial statements. Which of the following is an example of being associated with the financial statements?
Detailed Answer
Correct answer: (D)
all of the above
2
A reservation in an audit report refers to which of the following?
Detailed Answer
Correct answer: (D)
B) and C) only
3
Superstar auditor meets the management of XYZ public company for the first time. XYZ would like to engage Superstar as their auditor for the upcoming yearend. Superstar knows that he/she is a member of the board of directors of XYZ Company. What should Superstar do?
Detailed Answer
Correct answer: (A)
not accept the audit engagement
4
An emphasis of a matter paragraph is an extra paragraph in what type of audit report?
Detailed Answer
Correct answer: (C)
Standard unqualified report
5
An auditor discovers that ABC Company is not following GAAP in the accounting for their capital assets. The amount is material however, not extremely material. They find that everything else in the statements is in accordance with GAAP. The auditor should give which type of report?
Detailed Answer
Correct answer: (B)
Qualified opinion
6
Which of the following is not considered an accounting cycle?
Detailed Answer
Correct answer: (A)
revenue and expense cycle
7
Which of the following would you not consider to be a strong source for learning and obtaining an understanding of a new clients business?
Detailed Answer
Correct answer: (D)
talking to the A/P and A/R clerks
8
Which of the following is not considered to be a principal management assertion?
Detailed Answer
Correct answer: (B)
Integrity
9
ABC Co.’s yearend is December 31st which falls on a Wednesday. Which of the following is not an example of a cutoff problem?
Detailed Answer
Correct answer: (B)
inventory count takes place end of the day December 31st
10
Which of the following types of audit evidence is considered to be the most relevant and reliable i.e. the strongest form of evidence?
Detailed Answer
Correct answer: (D)
an auditor observes the inventory count of a client