Archives: Quiz

Which of the following presumptions does not relate to the appropriateness of audit evidence? A. The more effective the internal control system, the more assurance it provides about the accounting data and financial statements. B. An auditor’s opinion, to be […]

A confirmation is used to A. Verify the inventory count is correct. B. Verify that a control is being observed. C. Verify a representation from a third party. D. Verify that a specific trend is correct. In general, material frauds […]

Examples of entity-level controls include A. Management’s risk assessment process. B. Controls to monitor results of operations. C. The period-end financial reporting process. D. All of these are examples of entity-level controls. Which of the following statements is correct about […]

Audit sampling is commonly used for which type of audit evidence? A. Reperformance. B. Analytical procedures. C. Inquiry. D. Observation. The tolerable deviation rate for a test of controls is generally A. lower than the expected rate of deviations in […]

Which of the following procedures most likely would give the greatest assurance that securities held as investments are safeguarded? A. There is no access to securities between the year-end and the date of the auditor’s security count. B. Proceeds from […]

One of the risks associated with internal control from IT is potential loss of data. To gather evidence regarding the balance per bank in a bank reconciliation, an auditor would examine all of the following except the: A. cutoff bank […]

Which of the following statements concerning control risk is correct? A. Assessing control risk and obtaining an understanding of an entity’s internal controls may be performed concurrently. B. When control risk is high, an auditor is required to document the […]

An auditor’s analytical procedures performed during the overall review stage indicated that the entity’s accounts receivable balance had doubled since the end of the prior year. However, the allowance for doubtful accounts as a percentage of accounts receivable remained about […]

When obtaining evidence regarding litigation against an entity, the CPA would be least interested in determining A. an estimate of when the matter will be resolved. B. the period in which the underlying cause of the litigation occurred. C. the […]

Which of the following is the best argument against the use of negative accounts receivable confirmations? A. The cost-per-response is excessively high. B. There is no way of knowing if the intended recipients received them. C. Recipients are likely to […]

When the entity fails to include information that is necessary for the fair presentation of financial statements in the body of the statements or in the related footnotes, it is the responsibility of the auditor to present the information, if […]

In which of the following cases would the auditor be most likely to conclude that all of the items in an account under consideration should be examined rather than tested on a sample basis? A. Tolerable deviation is large and […]

Which of the following factors most likely would cause a CPA not to accept a new audit engagement? A. The prospective client’s unwillingness to permit inquiry of its legal counsel. B. The inability to review the predecessor auditor’s documentation. C. […]

Which of the following factors most likely would cause a CPA to decide not to accept a new audit engagement? A. The CPA’s lack of understanding of the prospective client’s internal auditor’s computer-assisted audit techniques. B. Management’s disregard of its […]

An auditor vouched data for a sample of employees in a payroll register to approved clock card/time sheet data to provide assurance that A. payments to employees are computed at authorized rates. B. employees worked the number of hours for […]

When an auditor expresses an adverse opinion, the opinion paragraph should include A. the principal effects of the departure from generally accepted accounting principles. B. a direct reference to a separate paragraph disclosing the basis for the opinion. C. the […]

When auditing contingent liabilities, which of the following procedures would be least effective? A. Reading the minutes of the board of directors. B. Reviewing the bank confirmation letter. C. Examining customer confirmation replies. D. Examining invoices for legal services. Which […]

Because of the low volume of purchase return transactions, the auditor normally does not test the controls associated with these transactions. The concept of internal control includes IT systems and manual systems. Answer: TRUE A going concern issue requires a […]

Substantive analytical procedures should not be used in the audit of property, plant, and equipment. Common law is written law enacted by the legislative branches of governments. Answer: FALSE An auditor may be unable to express an unqualified opinion if […]

When auditing a public company, a CPA must follow the auditing standards and Code of Professional Conduct of the PCAOB. There are typically only a couple of disclosure items that need to be considered for stockholders’ equity. Answer: TRUE An […]

Examples of attest engagements include examination, review, and agreed-upon procedures engagements. Audit evidence includes only written information used by the auditor in arriving at an opinion about the fairness of financial statements. Answer: FALSE A purchase transaction usually begins with […]

The revenue process affects numerous accounts in the financial statements. Monetary-unit sampling is commonly used by auditors to test controls. Answer: FALSE An auditor can be sued by a client for negligence under common law. Answer: TRUE Kiting is an […]

Information asymmetry seldom occurs. A series of business and related auditing failures led to the passage of the Sarbanes-Oxley Act (2002). Answer: TRUE Confidence level and sampling risk are related to sample size. Answer: TRUE Internal control consists of six […]

When auditing capital stock accounts, the cutoff assertion is the most important to consider. An approved purchase requisition form authorizes shipment of goods to customers. Answer: FALSE Materiality is based only on a quantitative analysis of the financial statements. Answer: […]

Describe the reasoning leading to the idea that the number of technological civilizations in the galaxy is equal to the average lifetime of a technological civilization. Why was deuterium so critical in the primordial nucleosynthesis? Answer: Formed at 900 million […]

How can prolonged observations of pulsars yield their approximate age? The burst of X-rays from an X-ray burster is due to ________ of hydrogen on its surface. Answer: fusion How did Ptolemy explain the retrograde motion of Venus? Answer: The […]

How do bipolar jets relate to lobe radio galaxies? Why was Voyager 2 an extremely efficient and productive probe? Answer: Using gravitational assists, Voyager 2 was able to visit all four jovian planets, making many discoveries along the way. In […]

Which type of reflector telescope would be the easiest to construct, and why? How do radio interferometers greatly enhance resolution in radio wavelengths? Answer: Hooking two or more radio dishes together with a computer lets us get resolution not equal […]

Most millisecond pulsars are found in ________ star clusters. The primordial nucleosynthesis was sped up by the abundance of ________ in the universe once the temperature dropped below a billion K. Answer: deuterium Water is one of the most common […]

A featureless spectrum, such as a rainbow, is said to be ________. The terrestrial planets have mantles of ________ materials and iron rich cores. Answer: silicates or rocky Contrast the observed visible mass of the Galaxy with its suspected total. […]

Jupiter and the Sun have almost the same composition and density; why isn’t Jupiter also a star? When are Mercury and Venus easiest to observe from Earth? Why? How much of then can we see at that time? Answer: At […]

There are ground-based telescopes much larger than Hubble, yet the HST still reveals the faintest objects yet seen. Explain. Of the six layers of Earth, which is unique among the planets? Why? Answer: The hydrosphere, since liquid water is found […]

What are two differences observed between Type I and Type II supernovae? The balance between gravity and ________ creates the internal structure of stars. Answer: radiation (pressure) Sagittarius A* was first noted due to its strong ________ emissions. Answer: radio […]

An electron has a ________ electric charge. From a distance of 1 AU, the gravity of a three-solar-mass star is ________ the gravity of a lower-limit stellar black hole. Answer: the same as The Moon’s spin-orbit resonance shows it is […]

Why was the separation of the superforce into three forces so important? To explain its magnetic field, Europa must have an ocean of ________. Answer: (salty) liquid water Contrast the composition of stony and iron meteorites. Answer: Stony meteorites are […]

The closed universe is compared to the surface of a ________ in spacetime. Explain how the central engine powers an active nucleus or quasar. Answer: Matter from an accretion disk spirals inward toward the event horizon of the supermassive black […]

Fusion depends upon the ________ nuclear force getting the protons to stick together. How can the age of a star cluster be found from its H-R diagram? Answer: The older the cluster is, the farther down the main sequence the […]

Describe the large-scale structure revealed by the redshift surveys. Which star has the largest proper motion? Why? Answer: Barnard’s Star lies only about 6 light-years away, and the direction of its motion has a large component perpendicular to our line […]

What three classes of stars are most likely to house life like ours? Why? Neutral hydrogen clouds appear ________ when viewed visually. Answer: transparent or clear Contrast the original and present uses of the Cosmological Constant. Answer: Originally Einstein added […]

What evidence did probes to Mars find that makes it a prime candidate for life? The element erupting from the volcanoes of Io is ________. Answer: sulfur Name the four types of reflector designs. Answer: prime focus, Newtonian, Cassegrain, and […]

Why is the atmospheric pressure at the surface of Venus so much higher than Earth’s? A lens must be ________ in shape to focus the transmitted light. Answer: convex Why was the 1978 Nobel Prize in Physics given to Penzias […]

Will the Sun become a brown dwarf? Explain. Describe the changes in the Sun from beginning to end of a sunspot cycle. Answer: The first spots appear at higher latitudes, 30-40 degrees above and below the equator. More spots appear, […]

List the three types of objects a star’s core can collapse to, and give the mass limits for each. What do gamma rays, X-rays, light, and radio waves all have in common? Answer: While they vary widely in wavelengths and […]

The ________ tides have a large change from high to low, near new and full moons. Contrast the rotation rates of the jovian planets with the terrestrial planets. Answer: All four jovian planets have a much faster rotation rate than […]

The ________ Space Telescope still gives us the highest resolution optical images. Why is the light from near a black hole red shifted? Answer: The gravity is great enough to decrease the energy of the escaping photons and thus increase […]

If its density suggests its core is similar to ours, why does Venus lack a magnetic field? High-precision observations by the Hubble Space Telescope have revealed what as-yet unexplained phenomenon in globular clusters? Answer: There appear to be three distinct […]

The time interval of 365.242 days is defined as the ________. All ________ planets have rings around their equators Answer: jovian The most important greenhouse effect gas in our atmosphere is ________. Answer: carbon dioxide The most abundant molecule in […]

State the cosmological principle. The ________ is the spherical outgassing as a comet nucleus is heated by the Sun. Answer: coma Because the interior of the Earth is ________, the crust is much less dense than the core. Answer: differentiated […]

How do sound and light waves differ? From hottest to coolest, the seven letters for the star types are ________. Answer: OBAFGKM Most of the planets found orbiting other stars are similar to Jupiter, but ________ in temperature. Answer: hotter […]

Harvard woman astronomer ________ discovered the period-luminosity relation. Mars appears red due to ________ on its surface. Answer: rust, or iron oxide If two observatories on opposite sides of the Earth were to measure the position of a star to […]