ACAMS Practice Questions
Accounting Cycle and Classifying Accounts
Accounting For Managers
Accounting for Merchandising Activities
Accounting for Pensions
Accounting Information Systems
Activity Based Costing
Adjusting Accounts for Financial Statements
Advanced Business Economics
Advertising and Public Relations
Advertising and Sales Promotion
An Overview of International Business
Analysis and Forecasting Techniques
Analyzing and Recording Transactions
Applied Business Research
Asset Demand and Supply under Uncertainty
Auditing and Attestation
Behavioral and Allied Sciences
Bonds and Long Term Notes Payable
Business Analytics & Technology Management Chapter 2
Business Analytics & Technology Management Chapter 3
Business Analytics & Technology Management Chapter 4
Business Analytics & Technology Management Chapter 5
Business Analytics & Technology Management Chapter 6
Business and Company Law
Business Ethics and Governance
Business Ethics Exam
Business Law Study guide
Business Organisations and Environment
Business organization and systems
Business Process Performance
California Real Estate
Capital Budgeting and Managerial Decisions
Changes in Accounting Principles
Changing Marketing Environment
Consolidated Financial Statements
Corporate and Business Law
Cost Accounting Final exam
Cost Accumulation Systems
Cost Allocation Techniques
Cost and Managerial Accounting
Cost of Capital
Cost Terms and Classifications
Cost Volume Profit Analysis
Currency Exchange Rates
Customer Relationships and Value
CVP Analysis and Marginal Analysis
Debt and Bankruptcy
Decision Makers Household Sector
Demand for Money
Derivative Instruments and Hedging Activities
Dividends and Payout Policy
Dividends, Shares, and Income
Elasticities of Demand and supply
Employee Training and Development
Environments of Business
Essence of Management
Ethical and Professional Standards
Ethics and Social Responsibility
Ethics for Management Accountants
External Financial Statements and Revenue Recognition
Federal Securities Acts
Financial and the Nonfinancial Sectors
Financial Decision Making
Financial Intermediaries and Financial Markets
Financial Markets and Securities Offerings
Financial Statements and Accounting Transactions
Flexible Budgets and Standard Costs
Florida Real Estate MCQs
Fraud Internal Control and Cash
Fundamental Accounting Principles
Global Marketing and World Trade
Governmental Accounting State and Local
Health and Life Comprehensive Exam
Health and Life Practice Questions
Human Resource Management
Human Resource Management HRM
Human Resource Planning
Importance of Business Economics
Insurance and Risk Management
Insurance License Texas Life and Health
Integrated Marketing Communications and Direct Marketing
Interactive Marketing and Electronic Commerce
Internal Auditing and Systems Controls
Internal Control and Cash
International Trade and Globalisation
Interpersonal and Organizational Communication
Introduction to Business
Introduction to Human Resource Management
Introduction to Human Resources Assessment
Investment Risk and Portfolio Management
Job Order Costing
Life and Health Insurance
Life Insurance Basics
Life Insurance Policies
Life Insurance Policy
Long Term Investment
Long Term Securities
Management and Cost Accounting
Managerial Accounting Concepts and Principles
Managing Organizational Change
Managing Production and Operations
Managing Products and Brands
Market Segmentation Targeting and Positioning
Marketing and Corporate Strategies
Marketing Channels and Wholesaling
Master Budgets and Planning
Mergers and Acquisitions
Money and Banking
National Health Insurance
Not For Profit Accounting
Organization and Operation of Corporations
Organizational Behavior Essentials
Organizational Markets and Buyer Behaviour
Organizational Structure and Design
Personal Selling and Sales Management
Principles and Practices of Management
Production and Operations Management
Profitability Analysis and Analytical Issues
Profitability Analysis and Decentralization
Property Plant and Equipment
Property Plant and Equipment Exam
Reporting and Analyzing Cash Flows
Reporting and Analyzing Long Lived Assets
Reporting and Analyzing Receivables
Responsibility Accounting and Performance Measures
Risk and Procedures for Control
Service Department Costing
Short Term Financing
Short Term Investment
Standard Costs and Variance Analysis
State Health Insurance
Statement of Cash Flow
Statement of Comprehensive Income
Statement of Financial Position
Stock Market and Stock Prices
Strategic Marketing Process
Structure of Interest Rates
Succession and Transfer Taxes
Supply Chain and Logistics Management
System Analysis and Design
Texas Real Estate
The Management Challenge
Total Quality Management
Understanding Exchange Rates
Understanding Interest Rates
Understanding Interest Rates Determinants
Value Added Tax
Which of the following conditions affects users demand for accounting information
users are not trained to collect and compile financial information
users require reliable information in order to make sound financial decisions
users may separated from the financial records by distance and time
all of the above
Business risk is the risk a company takes that
management will not compensate employees enough
customers will buy from competitors
an important machine will breakdown
a customer will pay 10 days late
Operational auditing refers to the study of business operations for the purpose of:
making recommendations about the economic and efficient use of resources
effective achievement of business objectives and compliance with company policies
providing an audit opinion on the financial statements of the company
A and B only
The Office of the Auditor General of Canada reports to which of the following
Canada Customs and Revenue Agency
Auditor General and parliament
Investors of a public company will probably request audited financial statements from a public accountant because
they are not trained to collect the financial information
they live too far away from the company headquarters
the company deals in complicated matters that they do not have the expertise to understand
they require good information so they can make sound decisions with their own wealth
An example of an assurance engagement is
labour data for union contract negotiation
audit of financial statements of a medium size company
regulatorâ€™s questionnaire on business ethics and conduct
all of the above
The general standard of generally accepted auditing standards does not include which of the following
person have adequate technical training and proficiency in auditing
performed with due care
performed after being adequately planned
performed with an objective state of mind
An auditor must be independent in appearance and fact. Which of the following is not an aspect of practical independence?
auditor has complete control over assigning personnel to audit
management cooperates in allowing auditor access to all evidence
client negotiates a lower adjustment to financial statements
auditors show no loyalty to client when preparing their report
Which of the following is not an aspect of planning and supervision under the GAAS examination standards?
obtaining an understanding of the clientâ€™s business
obtaining an understanding of the clientâ€™s internal controls
preparation of a written audit program
supervision of the audit procedures and staff
During the audit of XYZ Co. client management informs the auditor that they have two bank accounts both with a minimal balance in them. As the auditor...
believe the client as a minimal balance is too small to worry about
tell management they are being dishonest, last year there were three accounts
ask the client staff that reconciles the bank accounts if they agree with management
prepare a bank confirmation and have the bank confirm the number of accounts
Auditing standards require a public accountant to issue a report on the financial statements when the public accountantâ€™s name is associated wi...
a PA prepares financial statements for management after finishing their bookkeeping services for the month
a PA is identified as being the auditor for the company on a coversheet attached to the financial statements
a student prepares the financial statements and has a PA print them out on their letterhead
all of the above
A reservation in an audit report refers to which of the following?
travel arrangements made by the auditor
financial statements contain a departure from GAAP
auditors were unable to obtain appropriate evidence on the cash balance
B) and C) only
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 ...
not accept the audit engagement
not vote at Board meetings on anything to do with the audit
assign Superstarâ€™s next in line staff member to actually perform the audit
not worry about it â€“ Superstar is just that.
An emphasis of a matter paragraph is an extra paragraph in what type of audit report?
Qualified report â€“ departure from GAAP
Qualified report â€“ scope limitation
Standard unqualified report
Qualified report â€“ departure from GAAP â€“ adverse opinion
An auditor discovers that ABC Company is not following GAAP in the accounting for their capital assets. The amount is material however, not extremely ...
Standard unqualified report
Denial of opinion
Which of the following is not considered an accounting cycle?
revenue and expense cycle
revenue and collection cycle
acquisition and expenditure cycle
finance and investment cycle
Which of the following would you not consider to be a strong source for learning and obtaining an understanding of a new clients business?
analyze the financial statements of the new client
contact lawyers, bankers, other specialists as they relate to the new client
contact the internal auditors of the new client
talking to the A/P and A/R clerks
Which of the following is not considered to be a principal management assertion?
ABC Co.â€™s yearend is December 31st which falls on a Wednesday. Which of the following is not an example of a cutoff problem?
when goods are shipped January 1st that have a December sales invoice
inventory count takes place end of the day December 31st
when goods are received December 31st that have a January sales invoice
biweekly payroll is recorded when paid on Friday January 2nd
Which of the following types of audit evidence is considered to be the most relevant and reliable i.e. the strongest form of evidence?
Auditor interviews with officers of the corporation being audited
a letter from the clientâ€™s lawyer
an internal memo from management outlining new policies for accounts receivable
an auditor observes the inventory count of a client
When should analytical procedures be applied in an audit according to auditing standards?
in the beginning planning stages of an audit
while reviewing the company minutes
while evaluating the overall financial statements at the end of the audit
A) and C) only
Which of the following information gathering activities or attention directing activity is not a form of analytical procedure?
Reading and studying the company minutes
review of prior year file for adjustments made
comparing current year salaries to prior year salaries
recalculating the amortization of equipment
there are five general types of analytical procedures. Which of the following is not considered to be one of the five?
Current year account balance to prior year account balance
Current year account balance to invoices recorded
Current year account balance to budget account balance
Current year ratios to industry ratios
Which of the following audit risk model statements can occur?
IR = AR x CR x DR
CR = AR / IR x DR
DR = IR x CR / AR
AR = IR x DR / CR
The purpose of a balance-audit program is to...
specification of substantive procedures
specification of internal control procedures
specification of procedures to obtain an understanding of the clients business
assess control risk and inherent risk in the account balances
Which of the following would an auditor not include in a management report to the client at the end of an audit?
absence of appropriate segregation of duties
evidence of failure of control procedures
opinion on the fairness of financial statement
evidence of employee fraud
External auditors are responsible for which of the following in an audit?
evaluating existing internal controls
formulating the plan of the organization
ensuring the control environment supports sound internal controls
supervising and modifying internals controls
Which of the following is not an element of internal control environments?
methods of assigning authority and responsibility
personnel policies and procedures
purchasing departmentâ€™s vacation plan
Which of the following is not considered to be an essential function of an accounting system?
At XYZ Co. the management is trying to ensure they have proper segregation of duties in place. They have given you the following functional responsibi...
authorization to execute all sales transactions of capital assets
investigating any differences from capital asset reconciliation
recording of capital asset transactions
preparing the capital asset reconciliation
Select the term which best describes a departure from a prescribed internal control procedure in a particular case:
The risk model is defined as: AR = IR x CR x DR. The risk of assessing control risk (CR) too low can lead to:
the auditor performing more work than needed, thus wasting their resources
the auditor failing to do additional work that should be done, creating a threat to the effectiveness of the audit
poor choice of procedures
Expanding sample sizes required for statistical sampling of account balances
Non statistical sampling should not be used when:
Association of population items with random numbers is difficult and expensive.
Strictly defensible results based on mathematical results are not necessary.
Auditor has insufficient knowledge about the population
None of the above.
If the association of population items with random numbers is difficult and expensive but the auditor does not have sufficient knowledge about the pop...
Non statistical sampling
A or B
Sampling risk is defined as:
The probability that an owner would override internal controls and influence the books of account.
The probability that an auditorâ€™s conclusion based on a sample might be different from the conclusion based on an audit of the entire population.
The probability that sufficient controls are not in place within transaction streams to prevent material misstatements from occurring.
None of the above.
A computer based system does not include which of the following?
A CAAT is a...
computer assisted audit technique
computer aided analysis tool
control assisted analysis tool
Which of the following is not a method used by management to supervise the computer operation?
procedures to limit access to buildings
internal audit function
procedures to limit access to computer system
system design and documentation standards
The grandfather-father-son concept is a concept regarding...
transaction processing in computer environment
file retention in computer environment
ownership of the company changing from generation to generation
a processing control inherent in the system
A run-to-run total is an example of a...
audit substantive procedure
Which of the following are characteristic signs of cheque kiting schemes:
Company unwilling to provide auditors with bank statements and cancelled cheques.
Frequent deposits and cheques in round amounts.
Short time lag between deposits and withdrawals.
All of the above.
Typical source documents involved in the Revenue and Collection cycle does not include:
A/R Master File
The most frequent reconciliation is the comparison of the sum of customersâ€™ unpaid balances with the accounts receivable control account total....
A capital asset subledger.
An aged trial balance.
A bank statement.
A customer statement.
A complete revenue and collection cycle walk-through involves:
Following a sale from the initial customer order through credit approval, billing, and delivery of goods.
Following a sale from receipt of product from vendor, inventory storage, and the initial customer order through credit approval, billing, and delivery of goods.
Following a sale from the initial customer order through credit approval, billing, and delivery of goods, to the entry in the sales journal and subsidiary accounts receivable records, and finally to its subsequent collection and cash deposit.
Following a sale from order of product from vendor, receipt of product from vendor, and initial customer order through credit approval.
The control objective associated with selecting a sample of cash receipt remittance lists (or daily cash reports) and tracing them through to the cash...
The Control Objective associated with selecting a sample of recorded sales invoices from the sales journal and performing recalculations to verify mat...
None of the above
The dividend and interest accounts will normally have already been audited in whole or in part through which balance sheet accounts?
payables and investments
receivables and intangibles
receivables and investments
Analytical procedures used at the end of an audit are useful for what means?
obtain reassurance on overall reported results
compare to analytical procedures performed at the start of the audit
help determine what the income tax provision will be
as a substantive audit procedure
The property taxes and insurance accounts will normally have already been audited in whole or in part through which balance sheet accounts?
Liabilities and Capital Assets
Capital assets and Receivables
Capital assets and Equity
Who is responsible for sending out legal enquiry letters?
board of directors
Who is responsible for the client representation letter and who is it addressed to?
auditor to client
lawyer to auditor
client to auditor
client to lawyer
Review engagement standards indicate that review work should consist primarily of which of the following?
confirmation and observation
enquiry and analytical review
analytical review and inspection
enquiry and confirmation
For a set of financial statements that have been reviewed and a review engagement report is attached to the statements, each page must have which of t...
notice to reader
Which of the following best describes the type of work a PA primarily performs in relation to a Compilation engagement?
Analytical review and preparation of the financial statements
Preparation of the financial statements and follow-up with management
Preparation of the financial statements
Which of the following would not be considered acceptable conduct for a professional accountant?
preserving client confidentiality all the time
preserving client confidentiality except when the client consents to not
preserving client confidentiality except when dealing with the clientâ€™s lawyer
preserving client confidentiality except when involved in a pier review of the memberâ€™s professional practice
The single most important principle that public accountantâ€™s must follow is...
serve the public interest
perform an audit in accordance with GAAS
perform an assurance engagement with due care
A) and C) only
If an auditorâ€™s independence becomes disqualified in respect to a client they are auditing, they are responsible to...
disclose the independence impairment to the client
say nothing and try to change the impairment
Which of the following would not be considered a reason for why professional ethics are necessary?
maintain order in profession
You have just accepted the audit of Large Co. a public company and are the partner on the engagement. The firm has two partners â€“ yourself and ...
if you own 1% of the common shares of the organization
if 2 years ago you were the trustee in bankruptcy of the organization
if you are a director of the organization
if your partner is an officer of a subsidiary company of the organization
Breach of contract when referring to public accountants means...
lawsuit involving a client and an auditor
accounting services were not performed as agreed
auditor bills the client for extra services
there is no engagement letter signed by the client
DEF Co. is being sold by GHI Co. JKL Co. is interested in purchasing DEF Co. but requires audited financial statements before doing so. DEF Co. has su...
Canada Customs and Revenue Agency
Given the highly litigious climate today that auditors have to work in, which of the following would not be prudent for the auditor to do?
know thoroughly the clientâ€™s business
prepare good working papers
advertise in reputable magazines and publications
hire motivated, trained personnel
Which of the following would you consider to be an improvement in audit working paper files due to the increased litigation the public accounting prof...
use of strong management letters
use of detailed memos on client conversations
increased staffing on client premises
A)and B) only
You have just acquired a new client and have discussed various services that you will perform for the client including the annual audit and preparatio...
Fraud is considered when someone knowingly makes material misrepresentations of fact with the intent of making someone believe the falsehood and suffe...
Which one of the following elements does fraud awareness auditing involve familiarity with the least of?
knowledge of fraud schemes
What is the most important factor affecting the risk of management fraud?
lack of integrity
lack of internal controls
lack of board of director involvement in organization
lack of audited financial statements
You are working at a medium sized company and notice that your co-worker is displaying some unusual beheviour. Which of the following would alert you ...
never takes vacation
works late and alone
rarely goes out for lunch with co-workers
Management in a company have caused financial statements to be materially misleading by the use of fraud and "creative accounting" due to difficult ti...
overstate revenues and assets
overstate revenues and understate assets
understate liabilities and overstate assets
understate expenses and overstate liabilities
The risk of accepting a material misstatement is referred to in auditing as:
None of the above
If at any stage the auditor estimates a material likely aggregate misstatement, then the auditor may:
arrange for the client to recheck the areas that contain the largest misstatements
perform additional audit procedures (expand audit testing)
insist on an adjustment
All of the above
Conceptually, the auditor should pick that strategy of control testing combined with substantive tests of detail that:
Maximizes total cost
Minimizes total cost
Both B & C
When auditors decide that an account balance is misstated by more than the material misstatement when, in fact, unknown to the auditors, it is not mis...
Dollar unit sampling defines the population as:
The number of customer accounts
The number of dollars in an account balance or class of transactions
Both A & B
A stratified group of accounts, using materiality as a baseline for the stratification threshold
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