Audit Overview

The single feature that most clearly distinguishes auditing, attestation, and assurance is

• Type of service.

• Training required to perform the service.

• Scope of services.

• CPA’s approach to the service.

The subject matter of auditing consists of:

• Assertions.

• Established criteria.

• Evidence.

• Written reports.

Which of the following represents a procedure the auditor may use because plausible relationships among financial

statement balances are expected to exist?

• Attributes testing

• Enterprise risk assessment

• Inherent tests of control

• Analytical review

A summary of findings rather than assurance is most likely to be issued on which engagement?

• Agreed-upon procedures

• Compilation

• Examination

• Review

Which one of the following is not a provider of assurance services?

• CPAs

• Internal auditors

• Governmental auditors

• PICPA

Which of the following types of auditing is performed most commonly by CPAs for more than one client and on a

contractual basis?

• Internal auditing

• Income tax auditing

• External auditing

• Government auditing

To maximize independence, the director of internal auditing should report to the

• Audit committee.

• Controller.

• Chief financial officer.

• Director of information systems.

Which of the following criteria is unique to the independent auditor's attest function?

• General competence.

• Familiarity with the particular industry of each client.

• Due professional care.

• Independence.

Which of the following is least likely to be comparable between similar corporations in the same industry line of business?

• Accounts receivable turnover

• Earnings per share

• Gross profit percent

• Return on assets before interest and taxes

The auditor communicates the results of his or her work

through the medium of the

• Engagement letter

• Management letter

• Audit report

• Financial statements