Mẹo Which of the following auditor concerns most likely could be so serious that the auditor concludes that the financial statement audit Cannot be comple... ?
Mẹo về Which of the following auditor concerns most likely could be so serious that the auditor concludes that the financial statement audit Cannot be comple... 2022
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Nội dung chính- Which of the following auditor concerns most likely could be so serious that the auditor concludes that a financial statement audit CANNOT be performed?
There is substantial risk of intentional misapplication of accounting principlesIntentional misapplication of accounting principles would indicate that management lacks integrity and as a result, the auditor might conclude that a financial statement audit cannot be performed Which of the following factors most likely would lead a CPA to conclude that a potential audit
engagement should be rejected? It is unlikely that sufficient appropriate audit evidence is available to support an opinion on the financial statementsA CPA cannot render an opinion on financial statements unless he or she has obtained sufficient appropriate audit evidence supporting that opinion. If such evidence were unlikely to be available, the CPA
would most likely reject the potential audit engagement A scope limitation sufficient to preclude an unmodified opinion always will result when management: Refuses to acknowledge its responsibility for the fair presentation of the
financial statements in conformity with GAAPThe introductory paragraph of the standard unmodified report includes a statement that the financial statements are the responsibility of the company's management. Management's refusal to accept responsibility for the fair presentation of the financial statements therefore precludes issuance of this standard report Which of the
following matters generally is included in an auditor's engagement letter? Management's responsibility for the fair presentation of the financial statementsAn understanding with the client should be established regarding management's responsibilities, which include the preparation and fair presentation of the financial statements in accordance with the
applicable financial reporting framework. The understanding should be documented through a written communication, such as an engagement letter Before accepting an engagement to audit a new client, a CPA is required to obtain: The
prospective client's consent to make inquiries of the predecessor auditorInquiry of the predecessor auditor is a required pre-acceptance procedure. However, consent of the prospective client must be obtained before a CPA can make such inquiries of the predecessor auditor Which of the following statements would least likely appear in an auditor's engagement letter? After performing our preliminary analytical procedures we will discuss with you the other procedures we consider necessary to complete the engagementThe auditor does not consult with the client about audit procedures that will be performed
Hill, CPA has been retained to audit the financial statements of Monday Co. Monday's predecessor auditor was Post, CPA, who has been notified by Monday that Post's services have been terminated. Under these circumstances, which party should initiate between Hill and Post? Hill, the successor auditorThe initiative to communicate with the predecessor
auditor rests with the successor auditor. Note, however, that the successor auditor must first receive permission from the client.
A successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's:
Understanding of the reasons for the change in auditorsThe successor auditor is required to make inquiries of the predecessor auditor before accepting an engagement. These inquiries should include the predecessor's understanding as to the reasons for the change in auditors Which of the following auditor concerns most likely could be so serious that the auditor concludes that
a financial statement audit cannot be conducted? The integrity of the entity's management is suspectAn auditor's faith in the integrity of management is of the utmost importance in performing a financial statement audit. When an auditor is concerned that the integrity of management is suspect, the situation is serious enough to prevent the auditor from
performing the audit An auditor is required to establish an understanding with a client regarding the services to be performed for each engagement. This understanding generally includes: The auditor's responsibility for ensuring that
those charged with governance are aware of any significant deficiencies in internal control that come to the auditor's attentionAn understanding between the auditor and the client generally includes the auditor's responsibilities. One of the auditor's responsibilities is to ensure that those charged with governance (e.g. the audit committee) are aware of any significant deficiencies in internal control that come to the auditor's attention Which of the following statements most likely would be included in an engagement letter from an auditor to a client? The CPA firm will involve information technology specialists in the performance of the auditThe auditor's understanding with the client often includes discussion
of any specialists who will be involved in the engagement Which of the following circumstances would permit an independent auditor to accept an engagement after the close of the fiscal year? Remedy of limitations resulting from accepting
the engagement after the close of the end of the year, such as those relating to the existence of physical inventoryAn independent auditor may accept an engagement after the close of the fiscal year as long as he or she can address any limitations resulting from accepting the engagement that time. For example, the auditor may not be able to observe the ending inventory count, but may be able to perform acceptable alternative procedures sufficient to support the year-end inventory balance
Which of the following would a successor auditor ask the predecessor auditor to provide after accepting an audit engagement? Matters that may facilitate the evaluation of financial reporting consistency between the current and prior
yearsMatters that may facilitate the evaluation of financial reporting consistency between the current and prior years should be discussed after accepting an audit engagement When an auditor of a parent nonissuer is also the auditor of a component, then each of the following factors would ordinarily influence the decision to obtain a separate engagement letter from the
component, except: Whether there has been any turnover of the component's board membersTurnover of the component's board of directors generally would not influence the decision to obtain an additional engagement letter from the component In assessing the objectivity of internal auditors, the independent CPA who is auditing the entity's financial statements most likely would consider the: Internal auditing standards developed by The Institute of Internal AuditorsObjectivity is reflected by the organizational level to which the internal auditor reports as well as by policies
prohibiting audits of areas where the internal auditor lacks independence. In assessing the objectivity of internal auditors, the independent CPA who is auditing the entity's financial statements considers information obtained from previous experience, from discussions with management, from external quality reviews (if performed), and from professional internal auditing standards (such as those developed by The Institute of Internal Auditors) Which of the following statements is correct concerning an auditor's use of the work of a specialist? The work of a management specialist who has a contractual relationship with the client may be acceptable under certain circumstancesThe purpose of using the work of a specialist
is to provide the auditor with specialized skill or knowledge the auditor may lack. The work of a management specialist who has a relationship with a client may be acceptable under certain circumstances. If the management specialist has a relationship with the client, the auditor should assess the risk that the specialist's objectivity might be impaired. If the auditor believes that the relationship might impair the management specialist's objectivity, the auditor should perform additional
procedures with respect to the specialist's assumptions, methods, or findings to determine that the findings are not unreasonable or should engage another specialist for that purpose Which of the following would an auditor most likely use in determining the auditor's preliminary judgement about materiality? The entity's annualized interim financial statementsThe auditor's preliminary judgement about materiality is generally based on either annualized interim financial statements or annual financial statements from a prior period An internal auditor's work would most likely affect the nature, timing, and
extent of an independent CPA's auditing procedures when the internal auditor's work relates to assertions about the: Existence of fixed asset additionsIn making judgments about the extent of the effect of the internal auditor's work on the auditor's procedures, the auditor considers the materiality of financial statement amounts, the risk of material
misstatements of the assertions related to these financial statement amounts, and the degree of subjectivity involved in the evaluation of the audit evidence gathered in support of the assertions. As the degree of subjectivity increases, the need for the auditor to perform tests of the assertions increases. Testing of the existence of fixed asset additions involves very little subjectivity, and thus work performed by the internal auditor may reduce the auditor's testing in this area The element of the audit planning process most likely to be agreed upon with the client before implementation of the audit strategy is the determination of the: Timing of inventory observation procedures to be performedIn order to observe the
physical inventory count, the auditor would have to coordinate schedules with the client. This timing is usually agreed upon before implementation of the audit strategy In planning an audit of a new client, an auditor most likely would consider the methods used to process accounting information because such methods: Influence the design of internal controlThe auditor should consider the methods the entity uses to process accounting information in planning the audit because such methods influence the design of internal control. The extent to which computer processing is sued in significant accounting applications, as well as the complexity of the processing, may also influence the nature, timing, and extent of audit
procedures Which of the following statements is NOT correct about materiality? An auditor considers materiality for the financial statements as a whole in terms of the largest aggregate level of misstatements that could be material to any
one of the financial statementsMateriality levels include an overall level for each statement; however, because the statements are interrelated, and for reasons of efficiency, the auditor ordinarily considers materiality for planning purposes in terms of the smallest aggregate level of misstatements that could be considered material to any one of the financial statements
Which of the following statements is correct about the auditor's use of the work of a specialist? The auditor should obtain an understanding of the methods and assumptions used by the specialistAlthough the appropriateness and reasonableness of methods or assumptions used and their application are the responsibility of the specialist, the auditor should
obtain an understanding of the methods or assumptions used in order to determine whether the findings are suitable for corroborating the representations in the financial statements In assessing the competence, objectivity, and application of a systematic and disciplined approach by the entity's internal audit function, an independent auditor would LEAST likely consider
information obtained from: The results of analytical proceduresAnalytical procedures may be used to enhance the auditor's understanding of the client's business or to evaluate financial statement assertions, but generally would not be helpful in assessing competence, objectivity, and application of a systematic and disciplined approach by the entity's
internal audit function Which of the following is required documentation in an audit in accordance with generally accepted auditing standards? An audit plan setting forth in detail the procedures necessary to accomplish the engagement's
objectivesIn an audit conducted in accordance with GAAS, the auditor must document the audit plan, setting forth in detail the procedures necessary to accomplish the engagement's objectives Samples to test internal control are intended to provide a basis for an auditor to conclude whether: The control activities are operating effectivelySamples to test internal control are intended to provide a basis for an auditor to conclude whether the control activities are operating effectively An auditor plans to apply substantive tests to the details of asset and liability accounts as of an interim
date rather than as of the balance sheet date. The auditor should be aware that this practice: Potentially increases the risk that errors that exist the balance sheet date will not be detectedApplying substantive tests to the details of asset and liability accounts as of an interim date increases risk, as it is possible that errors will occur between
the date of interim testing and the balance sheet date. For this reason, the auditor generally selects for interim examination only accounts that are reasonably predictable with respect to amount, relative significance, and composition, and must also identify procedures sufficient to extend interim conclusions to year-end When issuing an unmodified opinion, the auditor who
evaluates the audit findings should be satisfied that the: Estimate of the total misstatement is less than a material amountAn unmodified opinion states that the financial statements are presented fairly, in all material respects. Accordingly, if the auditor believes that total misstatement (includes factual, judgmental, and projected misstatements) is
immaterial, an unmodified opinion is appropriate In developing an overall audit strategy, an auditor should consider: Preliminary evaluations of materiality, audit risk, and internal controlIn developing an overall audit strategy, an
auditor should consider preliminary evaluations of materiality, audit risk, and internal control Before applying principal substantive tests to an entity's accounts receivable an interim date, an auditor should: Assess the difficulty
in controlling the incremental audit riskWhen audit procedures are performed before year-end, the auditor must assess the incremental risk involved and determine whether sufficient alternative procedures exist to extend the interim conclusions to year-end Which of the following statements is correct concerning an auditor's use of the work of an actuary in assessing a
client's pension obligations? The auditor is required to understand the objectives and scope of the actuary's workThe auditor should obtain an understanding of the nature of the actuary's work, including its objectives and scope
According to PCAOB standards, when would a company be least likely to reevaluate established materiality levels or tolerable misstatements? The client has stated that it will not be able to respond to the auditor's request for evidence within the prescribed time frameThe client's request for an extension to submit documentation generally would not have
an impact on established materiality levels or tolerable misstatements Which of the following factors most likely would cause an auditor not to accept?Which of the following factors most likely would lead a CPA to conclude that a potential audit engagement should be rejected?What factor below most likely would cause an auditor not to accept a new audit engagement?Which of the following statements would most likely appear in an auditor's engagement letter?
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Which of the following auditor concerns most likely could be so serious that the auditor concludes that a financial statement audit cannot be performed?
A. Management fails to modify prescribed internal controls for changes in information technology.
B. Internal control activities
requiring segregation of duties are rarely monitored by management.
C. Management is dominated by one person who is also the majority stockholder.
D. There is a substantial risk of intentional misapplication of accounting principles.
Which of the following auditor concerns most likely could be so serious that the auditor concludes that a financial statement audit CANNOT be performed?
There is substantial risk of intentional misapplication of accounting principlesIntentional misapplication of accounting principles would indicate that management lacks integrity and as a result, the auditor might conclude that a financial statement audit cannot be performed
Which of the following factors most likely would lead a CPA to conclude that a potential audit engagement should be rejected?
It is unlikely that sufficient appropriate audit evidence is available to support an opinion on the financial statementsA CPA cannot render an opinion on financial statements unless he or she has obtained sufficient appropriate audit evidence supporting that opinion. If such evidence were unlikely to be available, the CPA would most likely reject the potential audit engagement
A scope limitation sufficient to preclude an unmodified opinion always will result when management:
Refuses to acknowledge its responsibility for the fair presentation of the financial statements in conformity with GAAPThe introductory paragraph of the standard unmodified report includes a statement that the financial statements are the responsibility of the company's management. Management's refusal to accept responsibility for the fair presentation of the financial statements therefore precludes issuance of this standard report
Which of the following matters generally is included in an auditor's engagement letter?
Management's responsibility for the fair presentation of the financial statementsAn understanding with the client should be established regarding management's responsibilities, which include the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework. The understanding should be documented through a written communication, such as an engagement letter
Before accepting an engagement to audit a new client, a CPA is required to obtain:
The prospective client's consent to make inquiries of the predecessor auditorInquiry of the predecessor auditor is a required pre-acceptance procedure. However, consent of the prospective client must be obtained before a CPA can make such inquiries of the predecessor auditor
Which of the following statements would least likely appear in an auditor's engagement letter?
After performing our preliminary analytical procedures we will discuss with you the other procedures we consider necessary to complete the engagementThe auditor does not consult with the client about audit procedures that will be performed
Hill, CPA has been retained to audit the financial statements of Monday Co. Monday's predecessor auditor was Post, CPA, who has been notified by Monday that Post's services have been terminated. Under these circumstances, which party should initiate between Hill and Post?
Hill, the successor auditorThe initiative to communicate with the predecessor auditor rests with the successor auditor. Note, however, that the successor auditor must first receive permission from the client.
A successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's:
Understanding of the reasons for the change in auditorsThe successor auditor is required to make inquiries of the predecessor auditor before accepting an engagement. These inquiries should include the predecessor's understanding as to the reasons for the change in auditors
Which of the following auditor concerns most likely could be so serious that the auditor concludes that a financial statement audit cannot be conducted?
The integrity of the entity's management is suspectAn auditor's faith in the integrity of management is of the utmost importance in performing a financial statement audit. When an auditor is concerned that the integrity of management is suspect, the situation is serious enough to prevent the auditor from performing the audit
An auditor is required to establish an understanding with a client regarding the services to be performed for each engagement. This understanding generally includes:
The auditor's responsibility for ensuring that those charged with governance are aware of any significant deficiencies in internal control that come to the auditor's attentionAn understanding between the auditor and the client generally includes the auditor's responsibilities. One of the auditor's responsibilities is to ensure that those charged with governance (e.g. the audit committee) are aware of any significant deficiencies in internal control that come to the auditor's attention
Which of the following statements most likely would be included in an engagement letter from an auditor to a client?
The CPA firm will involve information technology specialists in the performance of the auditThe auditor's understanding with the client often includes discussion of any specialists who will be involved in the engagement
Which of the following circumstances would permit an independent auditor to accept an engagement after the close of the fiscal year?
Remedy of limitations resulting from accepting the engagement after the close of the end of the year, such as those relating to the existence of physical inventoryAn independent auditor may accept an engagement after the close of the fiscal year as long as he or she can address any limitations resulting from accepting the engagement that time. For example, the auditor may not be able to observe the ending inventory count, but may be able to perform acceptable alternative procedures sufficient to support the year-end inventory balance
Which of the following would a successor auditor ask the predecessor auditor to provide after accepting an audit engagement?
Matters that may facilitate the evaluation of financial reporting consistency between the current and prior yearsMatters that may facilitate the evaluation of financial reporting consistency between the current and prior years should be discussed after accepting an audit engagement
When an auditor of a parent nonissuer is also the auditor of a component, then each of the following factors would ordinarily influence the decision to obtain a separate engagement letter from the component, except:
Whether there has been any turnover of the component's board membersTurnover of the component's board of directors generally would not influence the decision to obtain an additional engagement letter from the component
In assessing the objectivity of internal auditors, the independent CPA who is auditing the entity's financial statements most likely would consider the:
Internal auditing standards developed by The Institute of Internal AuditorsObjectivity is reflected by the organizational level to which the internal auditor reports as well as by policies prohibiting audits of areas where the internal auditor lacks independence. In assessing the objectivity of internal auditors, the independent CPA who is auditing the entity's financial statements considers information obtained from previous experience, from discussions with management, from external quality reviews (if performed), and from professional internal auditing standards (such as those developed by The Institute of Internal Auditors)
Which of the following statements is correct concerning an auditor's use of the work of a specialist?
The work of a management specialist who has a contractual relationship with the client may be acceptable under certain circumstancesThe purpose of using the work of a specialist is to provide the auditor with specialized skill or knowledge the auditor may lack. The work of a management specialist who has a relationship with a client may be acceptable under certain circumstances. If the management specialist has a relationship with the client, the auditor should assess the risk that the specialist's objectivity might be impaired. If the auditor believes that the relationship might impair the management specialist's objectivity, the auditor should perform additional procedures with respect to the specialist's assumptions, methods, or findings to determine that the findings are not unreasonable or should engage another specialist for that purpose
Which of the following would an auditor most likely use in determining the auditor's preliminary judgement about materiality?
The entity's annualized interim financial statementsThe auditor's preliminary judgement about materiality is generally based on either annualized interim financial statements or annual financial statements from a prior period
An internal auditor's work would most likely affect the nature, timing, and extent of an independent CPA's auditing procedures when the internal auditor's work relates to assertions about the:
Existence of fixed asset additionsIn making judgments about the extent of the effect of the internal auditor's work on the auditor's procedures, the auditor considers the materiality of financial statement amounts, the risk of material misstatements of the assertions related to these financial statement amounts, and the degree of subjectivity involved in the evaluation of the audit evidence gathered in support of the assertions. As the degree of subjectivity increases, the need for the auditor to perform tests of the assertions increases. Testing of the existence of fixed asset additions involves very little subjectivity, and thus work performed by the internal auditor may reduce the auditor's testing in this area
The element of the audit planning process most likely to be agreed upon with the client before implementation of the audit strategy is the determination of the:
Timing of inventory observation procedures to be performedIn order to observe the physical inventory count, the auditor would have to coordinate schedules with the client. This timing is usually agreed upon before implementation of the audit strategy
In planning an audit of a new client, an auditor most likely would consider the methods used to process accounting information because such methods:
Influence the design of internal controlThe auditor should consider the methods the entity uses to process accounting information in planning the audit because such methods influence the design of internal control. The extent to which computer processing is sued in significant accounting applications, as well as the complexity of the processing, may also influence the nature, timing, and extent of audit procedures
Which of the following statements is NOT correct about materiality?
An auditor considers materiality for the financial statements as a whole in terms of the largest aggregate level of misstatements that could be material to any one of the financial statementsMateriality levels include an overall level for each statement; however, because the statements are interrelated, and for reasons of efficiency, the auditor ordinarily considers materiality for planning purposes in terms of the smallest aggregate level of misstatements that could be considered material to any one of the financial statements
Which of the following statements is correct about the auditor's use of the work of a specialist?
The auditor should obtain an understanding of the methods and assumptions used by the specialistAlthough the appropriateness and reasonableness of methods or assumptions used and their application are the responsibility of the specialist, the auditor should obtain an understanding of the methods or assumptions used in order to determine whether the findings are suitable for corroborating the representations in the financial statements
In assessing the competence, objectivity, and application of a systematic and disciplined approach by the entity's internal audit function, an independent auditor would LEAST likely consider information obtained from:
The results of analytical proceduresAnalytical procedures may be used to enhance the auditor's understanding of the client's business or to evaluate financial statement assertions, but generally would not be helpful in assessing competence, objectivity, and application of a systematic and disciplined approach by the entity's internal audit function
Which of the following is required documentation in an audit in accordance with generally accepted auditing standards?
An audit plan setting forth in detail the procedures necessary to accomplish the engagement's objectivesIn an audit conducted in accordance with GAAS, the auditor must document the audit plan, setting forth in detail the procedures necessary to accomplish the engagement's objectives
Samples to test internal control are intended to provide a basis for an auditor to conclude whether:
The control activities are operating effectivelySamples to test internal control are intended to provide a basis for an auditor to conclude whether the control activities are operating effectively
An auditor plans to apply substantive tests to the details of asset and liability accounts as of an interim date rather than as of the balance sheet date. The auditor should be aware that this practice:
Potentially increases the risk that errors that exist the balance sheet date will not be detectedApplying substantive tests to the details of asset and liability accounts as of an interim date increases risk, as it is possible that errors will occur between the date of interim testing and the balance sheet date. For this reason, the auditor generally selects for interim examination only accounts that are reasonably predictable with respect to amount, relative significance, and composition, and must also identify procedures sufficient to extend interim conclusions to year-end
When issuing an unmodified opinion, the auditor who evaluates the audit findings should be satisfied that the:
Estimate of the total misstatement is less than a material amountAn unmodified opinion states that the financial statements are presented fairly, in all material respects. Accordingly, if the auditor believes that total misstatement (includes factual, judgmental, and projected misstatements) is immaterial, an unmodified opinion is appropriate
In developing an overall audit strategy, an auditor should consider:
Preliminary evaluations of materiality, audit risk, and internal controlIn developing an overall audit strategy, an auditor should consider preliminary evaluations of materiality, audit risk, and internal control
Before applying principal substantive tests to an entity's accounts receivable an interim date, an auditor should:
Assess the difficulty in controlling the incremental audit riskWhen audit procedures are performed before year-end, the auditor must assess the incremental risk involved and determine whether sufficient alternative procedures exist to extend the interim conclusions to year-end
Which of the following statements is correct concerning an auditor's use of the work of an actuary in assessing a client's pension obligations?
The auditor is required to understand the objectives and scope of the actuary's workThe auditor should obtain an understanding of the nature of the actuary's work, including its objectives and scope
According to PCAOB standards, when would a company be least likely to reevaluate established materiality levels or tolerable misstatements?
The client has stated that it will not be able to respond to the auditor's request for evidence within the prescribed time frameThe client's request for an extension to submit documentation generally would not have an impact on established materiality levels or tolerable misstatements
Which of the following factors most likely would cause an auditor not to accept?
Which of the following factors most likely would cause an auditor not to accept a new audit engagement? An inadequate understanding of the entity's internal controls.Which of the following factors most likely would lead a CPA to conclude that a potential audit engagement should be rejected?
Choice "b" is correct. A CPA cannot render an opinion on financial statements unless he or she has obtained sufficient appropriate audit evidence supporting that opinion. If such evidence were unlikely to be available, the CPA would most likely reject the potential audit engagement.What factor below most likely would cause an auditor not to accept a new audit engagement?
Which of the following factors most likely would cause an auditor to decline a new audit engagement? Failure of management to satisfy the preconditions for an audit.Which of the following statements would most likely appear in an auditor's engagement letter?
C. Management's responsibility for providing the auditor with an assesment of the risk of material misstatement due to fraud. An auditor's engagement letter most likely will include: Management's acknowledgment of its responsibility for maintaining effective internal control. Tải thêm tài liệu liên quan đến nội dung bài viết Which of the following auditor concerns most likely could be so serious that the auditor concludes that the financial statement audit Cannot be completed?