Archives: Quiz
Finance Chapter 16 1 The most common fraud in the acquisitions area is for the perpetrator to
Answer: B Diff: 3 Type: MC Page Ref: 508 Learning Obj.: 16-1 Describe the major business functions, documents, and records in the acquisition and payment cycle Answer: C Diff: 3 Type: MC Page Ref: 506 Learning Obj.: 16-1 Describe the […]
Finance Chapter 15 1 Explain the importance of the human resources and payroll cycle
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 15 Audit of the Human Resources and Payroll Cycle 15.1 Explain the importance of the human resources and payroll cycle 1) The human resources and payroll cycle is the transaction cycle […]
Finance Chapter 15 2 Discuss other key internal controls over the payment of payroll function
© 2013 Pearson Canada Inc. 5) Which of the following is a test of controls? A) Review the payroll journal, general ledger, and payroll earnings records for large or unusual amounts B) Examine time cards for indication of supervisor approval […]
Chapter 33 2 If interest rates in Sweden go up relative to the rest of the world
58) The major factor affecting a nation’s balance of payments is 58) A) a change in the productivity of its labor. B) its rate of inflation relative to the rate of inflation of its trading partners. C) an increase in […]
Finance Chapter 14 2 A cheque was issued for office supplies that were never received by the client.
© 2013 Pearson Canada Inc. 25) You are the auditor of Brody Grass Inc. The CEO expressed a concern that the audit fees for the year were very high. You then explained that this is largely due to poor internal […]
Chapter 33 1 Exchanging dollars for euros to pay a computer manufacturer in Belgium
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The International Monetary System was established 1) A) during the Great Depression by the League of Nations. B) by the United Nations. […]
Finance Chapter 14 1 From an audit perspective, an imprest bank account at a client can
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 14 Audit of Cash Balances 14.1 Identify the different types of cash accounts 1) The general cash account is considered significant in almost all audits A) where the ending balance is […]
Chapter 32 2 Specialization in trade will be economically efficient if it is based upon
61) For the United States since 1950, imports as a percentage of GDP has 61) A) remained constant. B) increased slightly. C) decreased. D) tripled. 62) The argument that with initial protection an industry will eventually become competitive is called […]
Finance Chapter 13 2 The most reliable evidence from confirmations is obtained when they are sent
© 2013 Pearson Canada Inc. 20) A communication addressed to the debtor requesting him or her to confirm whether the balance as stated on the communication is correct or incorrect is a A) legal confirmation. B) negative confirmation. C) positive […]
Chapter 32 1 Some nations avoid the effects of trade deflection in a trade bloc by enforcing
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The World Trade Organization 1) A) was established to settle trade disputes within the European Union. B) was established to resolve disputes […]
Finance Chapter 13 1 The two primary classes of transactions in the sales and collection cycle are
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 13 Completing the Tests in the Sales and Collection Cycle: Accounts Receivable 13.1 Identify and describe the risk-based process for designing tests of details of balances for accounts receivable 1) Tests […]
Chapter 31 2 When a polluter has to bear the full social cost of their actions
58) Generally, as levels of pollution are reduced, 58) A) marginal benefits from the reduction decrease. B) marginal cost from the reduction are constant. C) marginal costs from the reduction decrease. D) marginal benefits from the reduction increase. 59) Which […]
Finance Chapter 12 2 An effective procedure to test for unbilled shipments is to trace from the
© 2013 Pearson Canada Inc. 11) An effective procedure to test for unbilled shipments is to trace from the A) sales history file to the shipping documents. B) shipping documents to the sales history file . C) sales history file […]
Chapter 31 1 When the social costs exceed the private costs, economists state that there is
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements best defines private costs? 1) A) They represent explicit costs incurred by business firms in the private […]
Finance Chapter 12 1 Identify and describe typical records and transactions in the sales cycle
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 12 Audit of the Sales and Collection Cycle; Tests of Controls 12.1 Identify and describe typical records and transactions in the sales cycle 1) The overall objective in the audit of […]
Chapter 30 2 When poverty is defined by an absolute real income level,
69) All of the following aim to reduce income inequality EXCEPT 69) A) regressive taxes. B) Social Security payments. C) earned income tax credits. D) food stamp programs. 70) The new federal government’s national health care program imposes the following […]
Finance Chapter 11 2 Explain the difference between sampling with replacement and without replacement
© 2013 Pearson Canada Inc. 19) A) Describe three types of sample selection methods commonly associated with statistical audit sampling. B) Explain the difference between sampling with replacement and without replacement. Which method is more common in audit practice? C) […]
Chapter 30 1 Which of the following is not a true statement about the Lorenz curve
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Many argue the poor are getting poorer, at least in a relative sense. Evidence that contradicts this is that 1) A) household […]
Finance Chapter 11 1 Decide when an auditor would use statistical rather than non statistical sampling
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 11 Audit Sampling Concepts 11.1 Define sampling. Decide when an auditor would use statistical rather than nonstatistical sampling 1) CAS 530 has a very specific definition of sampling. Assuming that each […]
Chapter 29 2 A profit-maximizing mon opsonist will hire workers up to the point at which
58) The union wage differential 58) A) varies substantially across employment sectors. B) increases during expansions. C) is greater for private sector employees than for government sector workers. D) has remained fairly constant over the past 30 years. 59) The […]
Finance Chapter 10 2 Explain why determining evidence mix is a dynamic process
Answer: A. Financial statement impact: Audit phase and description How the audit process is affected or changed due to the implementation of the new DBMS system 1. Preplanning, which involves documentation and decisions prior to the actual conduct of the […]
Chapter 29 1 A company town in the lumber or mining industry is an example of a
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In a monopsonistic market, 1) A) employment is higher but wages are lower than in a comparable competitive market. B) both employment […]
Finance Chapter 10 1 Risks of fraud are assessed at which level(s) of the audit
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 10 Audit Strategy and Audit Program 10.1 Explain what an audit strategy is 1) A planned approach to the conduct of audit testing, taking into account assessed risks, is called an […]
Chapter 28 2 The additional cost associated with hiring one additional unit of some factor input
65) When the price of labor increases, the substitution effect will ________ the quantity of labor demanded and the output effect will ________ it. 65) A) decrease; increase B) decrease; decrease C) increase; decrease D) increase; increase 66) An increase […]
Finance Chapter 9 2 Which one of the following is an example of a general authorization?
16 15) Which one of the following is an example of a general authorization? A) The highest credit limit allowed for accounts receivable is $50,000. B) ABC Company has a credit limit of $25,000. C) Each supervisory wage rate must […]
Chapter 28 1 When Canadian firms outsource accounting services to the United States
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Number of Total Number of Total Workers Output Workers Output 0 0 6 945 1 200 7 1000 2 420 8 1025 3620 […]
Finance Chapter 9 1 One of the sides of this triangle is incentives or pressures
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 9 Internal Controls and Control Risk 9.1 State the three primary objectives of effective internal control 1) A system of internal control consists of policies and procedures designed to provide management […]
Chapter 27 2 Refer to the above figure. An unregulated natural monopolist would choose
67) Social regulation is focused on all of the following EXCEPT 67) A) ensuring costs are minimized and benefits are maximized. B) a better quality of life through a less polluted environment. C) the impact of production on the environment […]
Finance Chapter 8 2 Which of the following is the least persuasive type of evidence
15 18) Following are examples of evidence that could be collected during an audit of financial statements. 1. Duplicate copies of sales invoices. 2. Inspection of new $100,000 cutting machine. 3. Bank confirmation. 4 Remittance advices. 5. Vendor’s invoices. 6. […]
Chapter 27 1 Credence goods are particularly susceptible to the lemons problem because
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The federal regulatory agency whose mission is to regulate workplace health and safety is the 1) A) SEC. B) AFL–CIO. C) FTC. […]
Finance Chapter 8 1 Those procedures specifically outlined in an audit program are primarily designed to
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 8 Audit Evidence 8.1 Describe five evidence decisions made during the audit process 1) CAS 330, the auditor’s response to assessed risks, explains that the auditor needs to link completed audit […]
Chapter 26 2 Which of the following is a condition that helps enforce a cartel agreement
64) Cheating in a cartel is more likely to occur if the industry 64) A) has little variation in prices. B) has homogeneous products. C) has a large number of firms. D) has easily observable prices 65) All of the […]
Finance Chapter 7 2 The inherent risks of programming errors with resulting data loss increases when
14 Client business risk is reduced by: – the fact that manufacturing is outsourced and there is no inventory, reducing financial exposure for unsold items Audit risk could be argued to be any of low/med/high depending upon the emphasis given […]
Chapter 26 1 If we observe firms earning zero economic profits in the short run
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If we observe firms earning zero economic profits in the short run, we know that 1) A) there must not be any […]
Finance Chapter 7 1 What is the role of internal controls during the assessment of inherent risk
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 7 Materiality and Risk 7.1 State the components of the audit risk model and describe the process used to assess audit risk 1) Risk in auditing means that the auditor accepts […]
Chapter 25 1 Which of the following is most likely to be a monopolistically competitive firm
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In a long–run equilibrium in a monopolistically competitive industry that produces information products, revenues are equal to the ________ costs of developing, […]
Finance Chapter 6 2 Discuss some of the ways that this knowledge can be obtained
© 2013 Pearson Canada Inc. 45) Knowledge of the client’s industry and external environment can be obtained in different ways. Discuss some of the ways that this knowledge can be obtained. 13 Answer: – discussion with the auditor who was […]
Chapter 25 2 A monopolistic competitor finds its profit-maximizing rate of output by
64) A monopolistic competitor finds its profit–maximizing rate of output by 64) A) setting average revenue equal to average total cost. B) equating marginal revenue and marginal cost. C) equating price and marginal revenue. D) equating the marginal revenue from […]
Finance Chapter 6 1 At what point in the audit process is the audit plan finalized
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 6 Client Risk Profile and Documentation 6.1 Explain the importance of an adequate audit planning process 1) An effective audit is one that A) reduces the audit risk to the targeted […]
Chapter 24 2 The price elasticity of demand for a good produced by a monopolist
61) In the above figure, if the firm is producing Q2 units at a price P2, it should 61) A) not change output or price. B) increase output and decrease price. C) decrease output and increase price. D) shut down. […]
Finance Chapter 5 1 Which of the following are the phases that are part of the risk assessment process
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 5 Audit Responsibilities and Objectives 5.1 Describe the objective of conducting an audit of financial statements 1) The objective of the audit of financial statements by the auditor is the expression […]
Chapter 24 1 A monopolist can earn economic profits in the long run because
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A monopolist can earn economic profits in the long run because 1) A) a monopoly is by definition large, and this gives […]
Finance Chapter 5 2 explain how these new computer systems might affect the audit process
14 © 2013 Pearson Canada Inc. 8) Pet Shop Ltd. is a large retail outlet with ten full time employees in addition to the owner. You dropped by on your way home one day to organize the audit planning process […]
Chapter 23 2 If a perfectly competitive industry is in long-run equilibrium, then
52) Economic efficiency means 52) A) that it is impossible to increase the output of any good without lowering the total value of the output of the economy. B) the same as technical efficiency. C) that high–tech methods of production […]
Finance Chapter 4 2 What are the different business organization structures that an accountant may use
© 2013 Pearson Canada Inc. 28) A client is suing a PA firm claiming that they are responsible for the losses suffered from a fraud in the payroll department that was not uncovered during the year end testing done by […]
Chapter 23 1 Which of the following is true for the perfectly competitive firm
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Price equals the minimum of long–run average cost 1) A) along a horizontal long–run supply curve, but not along an upward sloping […]
Finance Chapter 4 1 you issued an unqualified audit opinion on his financial statements
© 2013 Pearson Canada Inc. Auditing, 12e (Arens) Chapter 4 Legal Liability 4.1 Explain how sources of legal liability are related to a distinction between business failure and audit failure 1) While performing services for their clients, professionals have always […]
Chapter 22 2 If average variable costs are increasing while average total costs are decreasing
69) In the above figure, the long–run cost curve between points A and B illustrates 69) A) diseconomies of scale. B) economies of scale. C) diminishing marginal product. D) constant returns to scale. 70) The planning curve is the 70) […]
Finance Chapter 3 2 Which of the following situations best describes an advocacy threat
© 2013 Pearson Canada Inc. 3) When the users of financial statements have confidence in the independence of the public accountant, it is referred to as independence in A) fact. B) appearance. C) conduct. D) total. Answer: B Diff: 2 […]
Chapter 22 1 Which of the following is TRUE for a firm in the long run
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If a firm is experiencing diseconomies of scale, then 1) A) proportional increases in all inputs result in proportional increases in output. […]