Auditing

When the financial statement are fairly stated but the auditor concludes there is substantial doubt whether the client can continue in existence, the auditor should issue an...

• Adverse Opinion

• Unqualified Opinion

• Qualified Opinion only

• Unqualified Opinion with explanatory paragraph

The sequence of steps in gathering audit evidence as the basis for the auditor's opinion is...

• Tests of controls, determination of control risk and substantive tests.

• Control risk assessment, tests of controls and substantive tests.

• Substantive tests, control risk assessments and tests of controls.

• Control risk assessment, Substantive tests, and Tests of controls

Information / facts that are used as a basis for drawing conclusions are the meaning of...

• Inspection

• Confirmation

• Audit evidence

• Observation

The standard report includes all of the following except...

• Introductory Paragraph

• Explanatory Language Paragraph

• Scope Paragraph

• Opinion Paragraph

General Standards include all of the following except...

• Understanding the Entity

• Independence

• Adequate Training

• Due Professional Care

Items that are considered to be _____, are significant to financial statement users

• Verifiable

• Recorded

• Fairly Presented

• Material

Audit evidence can come in different forms with different degrees of persuasiveness. Which of the following is the least persuasive type of evidence?...

• Vendor's Invoice

• Prenumbered sales Invoice

• Bank statement obtained from the client

• Computations made by the auditor

Which of the following types of audit evidence is generally the most reliable...

• Bank statement

• Analytical procedures

• Bank Confirmation

• Inquiries made of audit committee

Analytical procedures used in planning an audit should focus on identifying...

• The various assertions that are embodied in the financial statement

• Material weaknesses in internal control

• The predictability of financial data from individual transaction

• Areas that may represent specific risks relevant to the audit

In minimizing the risk of litigation, which precaution can help minimize the risk of misunderstanding about the contractual obligations?...

• Use engagement letters

• Comply with professional pronouncements

• Thoroughly investigate clients

• Emphasize quality rather than growth