FINAL EXAM
Question 1
3 out of 3 points
Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n):
Selected Answer:
b.
attestation service
Correct Answer:
b.
attestation service
Question 2
3 out of 3 points
The accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and
established criteria by a competent, independent person is:
Selected Answer:
c.
Auditing
Correct Answer:
c.
Auditing
Question 3
3 out of 3 points
When accounting principles are not consistently applied, and the materiality level is immaterial, the auditor will issue a(n)
Selected Answer:
a.
standard unmodified opinion
Correct Answer:
a.
standard unmodified opinion
Question 4
3 out of 3 points
An audit of historical financial statements most commonly includes the:
Selected Answer:
d.
balance sheet, income statement, the statement of cash flows and the statement of changes in stockholders equity
Correct Answer:
d.
balance sheet, income statement, the statement of cash flows and the statement of changes in stockholders equity
Question 5
3 out of 3 points
The audit report date on a standard unmodified opinion audit report indicates
Selected Answer:
d.
the last day of the auditor‘s responsibility for the review of significant events that occurred after the date of the financial statements
Correct Answer:
d.
the last day of the auditor‘s responsibility for the review of significant events that occurred after the date of the financial statements
Question 6
3 out of 3 points
The management’s responsibility section of the standard audit report for a non-public company states that the financial statements are:
Selected Answer:
b.
the responsibility of management
Correct Answer:
b.
the responsibility of management
Question 7
3 out of 3 points
If the scope restriction imposed by the client is so material that the overall fairness of the financial statements is in question, the auditor should issue a(n)
Selected Answer:
b.
disclaimer of opinion
Correct Answer:
b.
disclaimer of opinion
Question 8
3 out of 3 points
Items that materially affect the comparability of financial statements generally require disclosure in the footnotes. If the client refuses to properly disclose the
item, the auditor will most likely issue
Selected Answer:
c.
a qualified opinion
Correct Answer:
c.
a qualified opinion
Question 9
3 out of 3 points
When the auditor determines that the financial statements are fairly stated, but there is a non-independent relationship between the auditor and the client, the
auditor should issue
Selected Answer:
b.
a disclaimer of opinion
Correct Answer:
b.
a disclaimer of opinion
Question 10
3 out of 3 points
Which of the following is least likely to cause an uncertainty about the ability of an entity to continue as a going concern?
Selected Answer:
c.
The entity is being sued by a competitor for a minor patent issue.
Correct Answer:
c.
The entity is being sued by a competitor for a minor patent issue.
Question 11
3 out of 3 points
The appropriate audit report date for a standard unmodified opinion audit report for a nonpublic entity should be:
Selected Answer:
c.
the date the auditor completed the auditing procedures in the field
Correct Answer:
c.
the date the auditor completed the auditing procedures in the field
Question 12
3 out of 3 points
If the balance sheet of a private company is dated December 31, 2016, the audit report is dated February 8, 2017, and both are released on February 15, 2017,
this indicates that the auditor has searched for subsequent events that occurred up to
Selected Answer:
c.
February 8, 2017
Correct Answer:
c.
February 8, 2017
Question 13
3 out of 3 points
A measure of the risk that audit evidence for a segment will fail to detect misstatements exceeding a tolerable amount, should such misstatements exist, is:
Selected Answer:
c.
Planned detection risk
Correct Answer:
c.
Planned detection risk
Question 14
3 out of 3 points
A measure of how much risk the auditor is willing to accept that the financial statements may be materially misstated after the audit is completed and an
unqualified audit opinion has been issued, is:
Selected Answer:
d.
Acceptable audit risk
Correct Answer:
d.
Acceptable audit risk
Question 15
3 out of 3 points
Which of the following presumptions is most correct about the reliability of audit evidence?
Selected Answer:
c.
Effective internal control provides more assurance about the reliability of audit evidence
Correct Answer:
c.
Effective internal control provides more assurance about the reliability of audit evidence
Question 16
3 out of 3 points
Evidence is usually more persuasive for balance sheet accounts when it is obtained
Selected Answer:
a.
as close to the balance sheet date as possible
Correct Answer:
a.
as close to the balance sheet date as possible
Question 17
3 out of 3 points
The materiality amount for segments of an audit set by the auditor at less than materiality for the financial statements taken as a whole is
Selected Answer:
b.
Performance materiality
Correct Answer:
b.
Performance materiality
Question 18
3 out of 3 points
Since materiality is relative, it is necessary to have a base for establishing whether misstatements are material. Normally, the most common base for deciding
materiality is:
Selected Answer:
d.
Net income before taxes
Correct Answer:
d.
Net income before taxes
When CPAs are able to maintain their actual independence, it is referred to as independence in:
Selected Answer:
c.
fact
Correct Answer:
c.
fact
