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Answer) False The effect on net income is not a qualitative materiality criterion infact it is an quantitative materiality criterion. Qualitative factors generally include , for example not providing adequate disclosures in the financial statements whereas Quantitative involves empirical information or monetary values |
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principles of auditing
ch 2
QUESTION 18 The effect on net income is a qualitative materiality...
principles of auditing ch 2 QUESTION 15 The sufficiency of audit evidence refers to the validity...
principles of auditing
ch 2
QUESTION 15 The sufficiency of audit evidence refers to the validity and relevance of the evidence. O True False QUESTION 16 The acceptable level of detection risk is A. Inherent risk times control risk. B. Inversely related to the amount of evidence to be gathered. C. The level of confidence, which is planned to be achieved. D. The inverse of audit risk.
Principles of auditing chapter 2 QUESTION 5 The generally accepted standards of fieldwork relate to A....
Principles of auditing
chapter 2
QUESTION 5 The generally accepted standards of fieldwork relate to A. Criteria for the content of the auditor's report on financial statements. B. Audit planning and evidence gathering. C. The need to maintain independence in mental attitude. D. The competence, independence, and professional care of persons performing the audit. QUESTION 6 The preliminary estimate of materiality bears an inverse relationship to audit risk. True False QUESTION 7
principles of auditing chapter 2 QUESTION 13 The three generally accepted auditing standards classified as general...
principles of auditing
chapter 2
QUESTION 13 The three generally accepted auditing standards classified as general standards can be described as criteria for the A. Competence, independence, and professional care of individuals performing the audit. B. Planning and supervision of the audit engagement C. Content of the financial statements and related footnote disclosures and the consistency standard. D. Content of the auditor's report, study of internal control, and planning. QUESTION 14 The internal controls of an entity are the policies...
Principles of auditing ch 3 An audit report should be dated as of A. The date...
Principles of auditing
ch 3
An audit report should be dated as of A. The date the report is delivered to the client. B. The last day of fieldwork. C. The balance sheet date of the latest period reported on. D. The date a letter of audit inquiry is received from the entity's attorney of record. QUESTION 6 Auditors may issue an opinion on the balance sheet only. True False QUESTION 7 An auditor is unable to determine the amounts...
principles of auditing chapter 2 QUESTION 7 The internal controls of an entity are the policies...
principles of auditing
chapter 2
QUESTION 7 The internal controls of an entity are the policies and procedures, which the entity has implemented to provide reasonable assurance that the entity's objectives are being achieved. True False QUESTION 8 The three generally accepted auditing standards classified as general standards can be described as criteria for the A. Content of the auditor's report, study of internal control, and planning. B. Competence, independence, and professional care of individuals performing the audit. C. Content...
principles of auditing chapter 2 QUESTION 11 Audit risk for an individual account consists of business...
principles of auditing
chapter 2
QUESTION 11 Audit risk for an individual account consists of business risk, detection risk, and control risk. True False QUESTION 12 There is an inverse relationship between the effectiveness of an entity's system of internal control and the A. Reliability of financial statements. B. Fairness of management assertions in the financial statements. C. Degree of staff supervision required in the performance of an audit. D. Extent of detailed audit tests required.
Principles of auditing ch3 Under the Sarbanes-Oxley Act, the CEO and CFO certify that they A....
Principles of auditing
ch3
Under the Sarbanes-Oxley Act, the CEO and CFO certify that they A. Are responsible for evaluating the effectiveness of internal control. B. Have overseen the evaluation of the effectiveness of internal control. C. Have identified to the SEC any fraud involving management. D. Have reviewed the monthly financial statements. QUESTION 15 A disclaimer of opinion is appropriate when management is unable to justify a change in accounting principle. O True False QUESTION 16 An unqualified opinion...
Principles of auditing Ch3 QUESTION 1 The standard scope paragraph describes in detail the tests, which...
Principles of auditing
Ch3
QUESTION 1 The standard scope paragraph describes in detail the tests, which the auditor performed. True False QUESTION 2 5.5 An explanatory paragraph following an opinion paragraph describes an uncertainty as follows:As discussed in Note X to the financial statements, the company is a defendant in a lawsuit alleging infringement of certain patent rights and claiming damages. Discovery proceedings are in progress. The ultimate outcome of the litigation cannot presently be determined. Accordingly, no provision for...
Principles of auditing ch3 QUESTION 10 When comparative financial statements are presented, the fourth reporting standard,...
Principles of auditing
ch3
QUESTION 10 When comparative financial statements are presented, the fourth reporting standard, which refers to financial stateme "taken as a whole," should be considered to apply to the financial statement of the A. Current period only. B. Current and immediately preceding period only C.Periods presented plus one preceding period. D. Current period and those of the other periods presented. QUESTION 11 Subsequent events are material events, which occur between the end of the fiscal year, and...
Principles of auditing chapter 2 QUESTION 17 Match the term with the correct definition Classified into...
Principles of auditing
chapter 2
QUESTION 17 Match the term with the correct definition Classified into general standards, standards of fieldwork, and standards of reporting. One minus detection risk. The underlying accounting data and all related corroborating information available to an auditor. A. Audit Evidence The likelihood that misstatement could occur and not B. Attestation Risk be prevented or detected by internal controls. C. Level of Confidence The probability that an attestor may unknowingly fail to D. Control Risk modify...
principles of auditing
ch 2
QUESTION 15 The sufficiency of audit evidence refers to the validity and relevance of the evidence. O True False QUESTION 16 The acceptable level of detection risk is A. Inherent risk times control risk. B. Inversely related to the amount of evidence to be gathered. C. The level of confidence, which is planned to be achieved. D. The inverse of audit risk.
Principles of auditing
chapter 2
QUESTION 5 The generally accepted standards of fieldwork relate to A. Criteria for the content of the auditor's report on financial statements. B. Audit planning and evidence gathering. C. The need to maintain independence in mental attitude. D. The competence, independence, and professional care of persons performing the audit. QUESTION 6 The preliminary estimate of materiality bears an inverse relationship to audit risk. True False QUESTION 7
principles of auditing
chapter 2
QUESTION 13 The three generally accepted auditing standards classified as general standards can be described as criteria for the A. Competence, independence, and professional care of individuals performing the audit. B. Planning and supervision of the audit engagement C. Content of the financial statements and related footnote disclosures and the consistency standard. D. Content of the auditor's report, study of internal control, and planning. QUESTION 14 The internal controls of an entity are the policies...
Principles of auditing
ch 3
An audit report should be dated as of A. The date the report is delivered to the client. B. The last day of fieldwork. C. The balance sheet date of the latest period reported on. D. The date a letter of audit inquiry is received from the entity's attorney of record. QUESTION 6 Auditors may issue an opinion on the balance sheet only. True False QUESTION 7 An auditor is unable to determine the amounts...
principles of auditing
chapter 2
QUESTION 7 The internal controls of an entity are the policies and procedures, which the entity has implemented to provide reasonable assurance that the entity's objectives are being achieved. True False QUESTION 8 The three generally accepted auditing standards classified as general standards can be described as criteria for the A. Content of the auditor's report, study of internal control, and planning. B. Competence, independence, and professional care of individuals performing the audit. C. Content...
principles of auditing
chapter 2
QUESTION 11 Audit risk for an individual account consists of business risk, detection risk, and control risk. True False QUESTION 12 There is an inverse relationship between the effectiveness of an entity's system of internal control and the A. Reliability of financial statements. B. Fairness of management assertions in the financial statements. C. Degree of staff supervision required in the performance of an audit. D. Extent of detailed audit tests required.
Principles of auditing
ch3
Under the Sarbanes-Oxley Act, the CEO and CFO certify that they A. Are responsible for evaluating the effectiveness of internal control. B. Have overseen the evaluation of the effectiveness of internal control. C. Have identified to the SEC any fraud involving management. D. Have reviewed the monthly financial statements. QUESTION 15 A disclaimer of opinion is appropriate when management is unable to justify a change in accounting principle. O True False QUESTION 16 An unqualified opinion...
Principles of auditing
Ch3
QUESTION 1 The standard scope paragraph describes in detail the tests, which the auditor performed. True False QUESTION 2 5.5 An explanatory paragraph following an opinion paragraph describes an uncertainty as follows:As discussed in Note X to the financial statements, the company is a defendant in a lawsuit alleging infringement of certain patent rights and claiming damages. Discovery proceedings are in progress. The ultimate outcome of the litigation cannot presently be determined. Accordingly, no provision for...
Principles of auditing
ch3
QUESTION 10 When comparative financial statements are presented, the fourth reporting standard, which refers to financial stateme "taken as a whole," should be considered to apply to the financial statement of the A. Current period only. B. Current and immediately preceding period only C.Periods presented plus one preceding period. D. Current period and those of the other periods presented. QUESTION 11 Subsequent events are material events, which occur between the end of the fiscal year, and...
Principles of auditing
chapter 2
QUESTION 17 Match the term with the correct definition Classified into general standards, standards of fieldwork, and standards of reporting. One minus detection risk. The underlying accounting data and all related corroborating information available to an auditor. A. Audit Evidence The likelihood that misstatement could occur and not B. Attestation Risk be prevented or detected by internal controls. C. Level of Confidence The probability that an attestor may unknowingly fail to D. Control Risk modify...
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