ôn tập

Which of the following is not a benefit of an assurance report on a set of financial statements?

• Attests to the correctness of the financial statements

• Enhances the credibility of the information being reported upon

• Reduces the risk that management may overstate the assets of the company to show a better result

• Draws the attention of the user to deficiencies in the information being reported upon

Which of the following is a limitation of the provision of assurance?

• An assurance engagement may deter fraud and error

• Assurance work is carried out by people who don't work for the entity and are therefore unfamiliar with their systems

• Information may contain estimates and judgements

• Unqualified staff may be used on assurance engagements

What level of assurance does a review engagement provide?

• No assurance

• Limited assurance

• Reasonable assurance

• Absolute assurance

What level of assurance does an audit engagement typically provide?

• No assurance

• Limited assurance

• Reasonable assurance

• Absolute assurance

Which three of the following relate to assertions about account balances at the period end?

• Occurrence

• Completeness

• Existence

• Rights and obligations

• Cut-off

Which three of the following relate to assertions about classes of transactions for the period under audit?

• Occurrence

• Completeness

• Existence

• Cut-off

What is the key difference between fraud and error in financial reporting?

• Fraud is intentional, while error is unintentional

• Fraud is always committed by management, while error is always committed by employees

• Error involves financial loss, while fraud does not.

• Fraud is easier to detect than error.

Which of the following is an example of fraud?

• A data entry clerk mistakenly enters a sale twice in the system.

• An accountant accidentally omits a transaction from the financial statements

• A manager creates fake vendor accounts to divert company funds.

• An employee forgets to reconcile the bank account at the end of the month.

Which of the following best describes an error in financial reporting?

• Manipulating the financial statements to show a better profit.

• A deliberate attempt to overstate revenue.

• Misclassifying a transaction due to a misunderstanding of accounting rules

• Creating fake invoices to increase reported sales

Some account balances, such as those for pensions and leases, are the result of complex calculations. The susceptibility to material misstatements in these types of accounts is defined as

• audit risk

• detection risk

• inherent risk

• sampling risk