Question

The limitations of an audit are NOT caused by ________. A. the nature of financial reporting. B. the nature of audit procedures. C. the need for the audit to be conducted within a reasonable period of time at a reasonable cost. D. a guarantee that the financial statements are free from error 2.5 points QUESTION 4 In an unqualified audit report on the financial statements of a public company,

ACC562what does the first statement of the opinion paragraph state? A. An audit was conducted, which financial statements were audited, and the dates of the financial statements. B. PCAOB audit standards were followed since it is a public company. C. The audit firm believes that its audit provides a reasonable basis for its opinion. D. Management is responsible for the fair presentation of the financial statements. 2.5 points QUESTION 5 Which of the following statements is true? A. Often interested users, like banks, ask private companies or non-users to provide audited financial statements. B. Public users are required to have three audits a year. C. Public users are required to have an audit of internal financial forecast reports (IFFRs). D. For efficiency purposes, the three required audits for public companies are performed at the same time. 2.5 points QUESTION 6 Which section of the AICPA Code of Professional Conduct includes ethical rules for members in business? A. Part I B. Part II C. Part III D. Some other section 2.5 points QUESTION 7 When you pass the CPA exam and then seek licensure, you would apply to _______. A. AICPA B. your university C. NASBA D. your State Board of Accountancy 2.5 points QUESTION 8 To be meaningful, a code of ethics must strike a balance between being _______. A. above the law but below the ideal B. below the law but above the ideal C. above the law but below practical D. below the law but above practical 2.5 points QUESTION 9 If a CFO of a company is dealing with an ethical situation, which section of the AICPA’s Code of Professional Ethics might he/she refer? A. Part I B. Part II C. Part III D. Some other section 2.5 points QUESTION 10 In the online version of the AICPA Code of Professional Conduct, what are used to make it easy to find related topics? A. Summaries B. A series of hyperlinks C. Outlines D. Interpretations 2.5 points QUESTION 11 If new information comes to light that would cause the auditor to establish a different level of planning materiality, then the auditor _______. A. should examine the information and make adjustments to materiality as needed B. issue a qualified opinion as part of the audit report C. follow the auditing standards that recommend an appropriate percentage of total assets as a benchmark for planning materiality for all companies D. have management of the company select the appropriate benchmark for planning materiality 2.5 points QUESTION 12 The use of performance materiality should: A. reduce the probability that the sum of immaterial and/or undetected misstatements in the financial statements is greater than materiality for the financial statements as a whole. B. increase the probability that the sum of immaterial and/or undetected misstatements in the financial statements is greater than materiality for the financial statements as a whole. C. reduce the probability that the sum of immaterial and/or undetected misstatements in the financial statements is less than materiality for the financial statements as a whole. D. increase the probability that the sum of immaterial and/or undetected misstatements in the financial statements is less than materiality for the financial statements as a whole. 2.5 points QUESTION 13 If management is preoccupied with meeting specific accounting numbers, this is a negative factor that should influence client acceptance and retention and is associated with _______. A. the integrity of management B. competence issues within the audit firm C. independence issues within the audit firm D. special circumstances and unusual risks 2.5 points QUESTION 14 Which of the following is a negative factor influencing client acceptance and retention with respect to competence issues? A. The audit firm does not have the affiliation with specialists to meet client needs. B. The client has a weak accounting system with few internal controls. C. The audit firm has conflict of interest issues that cannot be resolved prior to client acceptance. D. There are significant regulatory reporting requirements with close monitoring by regulators. 2.5 points QUESTION 15 Which overview defines audit strategy? A. The determination of the amount of time to spend testing the client’s internal controls and conducting detailed testing of transactions and account balances. B. Gaining an understanding of the client, including identifying risk factors. C. Performing tests of controls and detailed substantive testing of transactions and accounts. D. Evaluation of results of the detailed testing in light of the auditor’s understanding of the client and forming an opinion on the fair presentation of the client’s financial statements. 2.5 points QUESTION 16 A comparison of account balances to a single line item, such as total assets, is termed ________. A. common-size analysis B. trend analysis C. substantive procedures 2.5 points QUESTION 17 An auditor is always particularly concerned with a metric that measures how long it takes the client firm to purchase inventory, sell the inventory, and collect the associated receivable. This metric is commonly referred to as _________. A. the gross operating cycle B. the financing cycle C. the investing cycle D. the inventory cycle 2.5 points QUESTION 18 Which of the following indicates the ability of a company to generate income from its average investment in total assets? A. Return on assets B. Return of stockholders’ equity C. Gross profit margin D. Profit margin 2.5 points QUESTION 19 Inherent risk related to closing procedures would generally be increased when _______. A. a client is found to have strong closing procedures, and sound internal control practices relating to closing B. no errors and omissions are located when auditing the closing process C. staff assigned to deal with closing procedures are relatively inexperienced D. the closing process is relatively straightforward 2.5 points QUESTION 20 An indicator that the auditor might need to adopt extended audit procedures would be best evidenced by __________. A. an unusual fluctuation in gross profit margin last year B. net sales is increasing approximately 3% per year C. a new competitor has entered the client’s industry D. the client’s current ratio has decreased slightly 2.5 points Click Save and Submit to save and submit

Answer 1

Dear student,

As per the HOMEWORKLIB POLICY, only the first four questions should be answered. Kindly take note of it.

Part 3

Answer is option D

D. a guarantee that the financial statements are free from error

Nature of financial reporting, nature of audit procedures and the need for the audit to be conducted within a reasonable period of time at a reasonable cost cause the limitations of an audit.

Part 4

Answer is Option D

D. Management is responsible for the fair presentation of the financial statements.

The first paragraph of an unqualified audit report on the financial statements of a public company states the responsibility of management in regards to the preparation of financial statements and maintenance of sound internal controls.

Part 5

Answer is option C

C. Public users are required to have an audit of internal financial forecast reports (IFFRs).

To have maintain the accuracy of audit, Public users are required to have an audit of internal financial forecast reports (IFFRs).

Part 6

Answer is option B

B. Part II

Par II of the AICPA Code of Professional Conduct includes ethical rules for members in business. Members are required to follow integrity and objectivity rule. They are required not to misrepresent facts or fail to disclose material facts knowingly.