Podcast
Questions and Answers
Why does the need for assurance services arise?
Why does the need for assurance services arise?
- Because there is a potential bias in providing information (correct)
- Since most financial statement users today have direct knowledge of a company's operations
- As economic transactions are less complex than a decade ago
- Due to the closeness between a user and the organization
What is required of a CPA before accepting an engagement to audit a new client?
What is required of a CPA before accepting an engagement to audit a new client?
- Prospective client's consent to make inquiries of the predecessor auditor
- Understanding of the prospective client's industry and business (correct)
- Prospective client's signature on the engagement letter
- Preliminary understanding of the prospective client's control environment
When does management philosophy and operating style significantly influence an entity's control environment?
When does management philosophy and operating style significantly influence an entity's control environment?
- When the audit committee actively oversees the financial reporting process
- When the internal auditor reports directly to management
- When accurate management job descriptions delineate specific duties
- When management is dominated by one individual (correct)
Which of the following is considered adequate documentation in an internal control system?
Which of the following is considered adequate documentation in an internal control system?
What is the correct concern regarding an auditor's assessment of control risk?
What is the correct concern regarding an auditor's assessment of control risk?
What is the primary purpose of audit evidence?
What is the primary purpose of audit evidence?
What does the auditor gather evidential matter in order to do?
What does the auditor gather evidential matter in order to do?
What is the auditor’s responsibility for the detection of client’s noncompliance with laws and regulations compared to errors or fraud?
What is the auditor’s responsibility for the detection of client’s noncompliance with laws and regulations compared to errors or fraud?
Which term refers to the measure of the quantity of audit evidence considered necessary to achieve the predetermined acceptable level of detection risk?
Which term refers to the measure of the quantity of audit evidence considered necessary to achieve the predetermined acceptable level of detection risk?
What does 'reasonable assurance' mean in auditing?
What does 'reasonable assurance' mean in auditing?
In auditing, what does the auditor aim to achieve by gathering evidential matter?
In auditing, what does the auditor aim to achieve by gathering evidential matter?
When it comes to the auditor’s responsibility regarding compliance with laws and regulations, what is true?
When it comes to the auditor’s responsibility regarding compliance with laws and regulations, what is true?
How should a change in accounting principles that has no material effect on the current year's financial statements but is expected to have a material effect in later years be disclosed?
How should a change in accounting principles that has no material effect on the current year's financial statements but is expected to have a material effect in later years be disclosed?
Which function is considered the least function of the Board of Accountancy?
Which function is considered the least function of the Board of Accountancy?
What is NOT a step that an audit firm should take prior to accepting an audit engagement?
What is NOT a step that an audit firm should take prior to accepting an audit engagement?
What specific inquiries should a successor auditor make of a predecessor auditor before accepting an audit engagement?
What specific inquiries should a successor auditor make of a predecessor auditor before accepting an audit engagement?
Which of the following is NOT a financial assertion that auditors consider during an audit?
Which of the following is NOT a financial assertion that auditors consider during an audit?
What is one key aspect of audit evidence that helps auditors reduce detection risk?
What is one key aspect of audit evidence that helps auditors reduce detection risk?
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