Auditing Theory Reviewer DOC

Title	Auditing Theory Reviewer
Author	Jollie Vi
Pages	18
File Size	262 KB
File Type	DOC
Total Downloads	521
Total Views	800

Summary

1. Which of the following would not be a consideration of a CPA firm in deciding whether to accept a new client? A. The client’s probability of achieving an unqualified opinion. B The client’s financial ability. . C The client’s relations with its previous CPA firm. . D The client’s standing in the ...

Description

1. Which of the following would not be a consideration of a CPA frm in deciding whether to accept a new client? A . The client's probability of achieving an unqualifed opinion. B . The client's fnancial ability. C . The client's relations with its previous CPA frm. D . The client's standing in the business community. 2. After accepting an audit engagement, a successor auditor should make specifc inquiries of the predecessor auditor regarding: A . The predecessor's evaluation of matters of continuing accounting signifcance. B . Disagreements which the predecessor had with the client concerning auditing procedures and accounting principles. C . The client's ability to pay the fee for this engagement. D . The predecessor's assessments of inherent risk and judgments about materiality. 3. The objective and scope of the audit and the extent of the auditor's responsibilities to the client are best documented in a(n): A . Client's representation letter C . Audit engagement letter. B . Independent auditor's report D . Management letter 4. Which of the following is not a valid reason why an auditor sends to his client an engagement letter? A . Avoid misunderstanding with respect to the engagement B . Confrms the auditor's appointment C . Discloses the objective and scope of the audit D . Assures CPA's compliance to PSAs 5. The secondary purpose of the engagement letter is to: A . Remind management that the primary responsibility for the fnancial statements rests with management. B . Satisfy the requirements of the CPA's liability insurance policy. C . Provide a written record of the agreement with the client as to the services to be provided. D . Provide a starting point for the auditor's preparation of the preliminary audit program. 6. S1 The engagement letter will include identifcation of signifcant dates throughout the engagement. S2 The engagement letter will inform the client about the audit procedures to be performed. A. True, true B. False, false C. True, false D. False, true 7. Which of the following procedures is performed primarily during audit planning? A. Risk assessment procedures B. Tests of controls C. Substantive tests D. All of the above are performed primarily during audit planning 8. Which of the following is not a risk assessment procedure? A. Inquiries of management and others within the entity B. Analytical procedures C. External confrmation with customers D. Observation and inspection 9. S1 Materiality judgments are made in light of surrounding circumstances and necessarily involve both quantitative and qualitative judgments. S2 An auditor's consideration of materiality is infuenced by the auditor's perception of the needs of a reasonable person who will rely on the fnancial statements. A. True, true B. False, false C. True, false D. False, true 10. S1 Analytical procedures are required to be used in planning a fnancial statement audit....