Question

1. A CPA has accepted an engagement in which inquiry and analytical procedures are the primary procedures to be performed. These procedures will form the basis for issuance of:

A) A compilation report
B) Audit report on supplemental information issued by the client C) An agreed-upon procedures report
D) Review report on financial statements for a nonpublic company

2. Auditors frequently use analytical procedures as substantive tests, but this is not required by auditing standards.

A) True B) False

3. Which of the following is relevant to the auditor’s judgment about the nature, timing, and extent of tests of details of balances?

A) the auditor’s assessment of inherent risk
B) the auditor’s judgment about the acceptable level of audit risk C) the results of substantive tests of transactions
D) all of the above

4. The procedures necessary to form an opinion on a company’s internal control over financial reporting also are sufficient to assess control risk for all relevant assertions as less than high.

A) True B) False

5.Which of the following statements related to information technology (“IT”) application controls is correct?

A) Application controls relate to various aspects of the IT function including software acquisition and the processing of transactions.
B) Application controls relate to various aspects of the IT function including physical security and the processing of transactions in various cycles.

C) Application controls relate to all aspects of the IT function. D) Application controls relate to the processing of transactions.

Answer 1

1. A CPA has accepted an engagement in which inquiry and analytical procedures are the primary procedures to be performed. These procedures will form the basis for issuance of:

Answer: A) A compilation report

2. Auditors frequently use analytical procedures as substantive tests, but this is not required by auditing standards.

Answer: True

3. Which of the following is relevant to the auditor’s judgment about the nature, timing, and extent of tests of details of balances?

Answer: all of the above

4. The procedures necessary to form an opinion on a company’s internal control over financial reporting also are sufficient to assess control risk for all relevant assertions as less than high.

Answer: True

5.Which of the following statements related to information technology (“IT”) application controls is correct?

Answer: D) Application controls relate to the processing of transactions.

Thanks.