41.
Which of the following is not correct about materiality?
42.
Which of the following is not a consideration in determining a measure of materiality?
43.
The SEC is concerned that auditors don’t pay enough attention to qualitative factors
affecting materiality because:
44.
The auditors’ determination of whether the financial statements “present fairly” is based
on:
45.
Which of the following summarizes the essence of general standards of GAAS?
46.
Which of the following summarizes the essence of field work standards of GAAS?
47.
Which of the following is not one of the reporting standards of GAAS that guides auditors
in formulating the audit opinion?
48.
Because of the risk of material misstatement due to improper management
representations, an audit of financial statements in accordance with GAAS should be
performed with:
49.
Gathering and objectively evaluating audit evidence requires the auditor to consider:
50.
In an audit, the auditor has a requirement to address risk assessment with respect to:
51.
Audit procedures are different than audit evidence because:
52.
Audit documentation is critical to evidence gathering because:
53.
In gathering audit evidence, the accessibility of information may be a factor thereby
influencing which judgment trigger?
54.
PCAOB Standard 7 addresses engagement quality reviews and have as its objectives to:
55.
PCAOB Standard 14 addresses audit results and requires:
56.
PCAOB Auditing Standard No.16 requires the auditor to communicate with the audit
committee all but:
57.
PCAOB Auditing Standard No.16 requires the auditor to communicate with the audit
committee all but:
58.
Which of the following audit deficiencies was identified most often in a study by the
Center for Audit Quality of SEC imposed sanctions?
59.
Which of the following is NOT one of the most common audit deficiencies identified in
PCAOB inspections?
60.
The main reason the PCAOB has charged Chinese affiliates of U.S. audit firms with failing
to provide sufficient documentary evidence of audits of Chinese companies listed on U.S.
exchanges is:
61.
In the Loyalty and Fraud Reporting case, Ethan Lester pressured his friend Vic Jensen to:
62.
In the ZZZZ best case, Barry Minkow was charged with:
63.
In the Imperial Valley Community Bank case, each of the following were reasons for the
going concern issue except:
64.
The case which deals with assigning a quality review partner to an audit is:
65.
The Tax Inversion case deals with:
66.
The primary issue in the Rooster, Hen, Footer and Burger case is:
67.
Which of the following is NOT addressed in the Diamond Foods case?
68.
Bill Young’s ethical dilemma was:
5-35
69.
The primary accounting issue in the Royal Ahold case is:
70.
The Groupon case deals with all but the following issues:
Essay Questions
5-36
71.
Explain each of the three sides of the fraud triangle with respect to how it contributes
toward the possibility that fraud in the financial statements may be present. Are there
differences with respect to how each element might influence occupational fraud and
fraudulent financial statements? Explain.
5-37
72.
Explain the link between the opportunity to commit fraud and corporate governance
systems.
5-38
An important factor in whether the opportunity to commit fraud exists is whether the
corporate governance system is operating as intended. If not, the opportunity to commit
fraud is greater. In cases such as Tyco, the board members were allowed to use company
funds for personal purposes to bring them along with the CEO’s similar fraud (Dennis
Kozlowski), and presumably to buy their silence.
5-39
73.
Explain the circumstances under which an auditor should give each of the following
opinions:
(a) Unmodified opinion
(b) Unmodified opinion with an emphasis-of-matter paragraph
(c) Qualified opinion
(d) Adverse opinion