Problem

Multiple choice review.1. When a financial statement auditor cannot determine if financial...

Multiple choice review.

1. When a financial statement auditor cannot determine if financial statements were prepared according to GAAP, the auditor issues a(n):

a. Qualified opinion.

b. Adverse opinion.

c. Disclaimer of opinion.

d. Exception report.

2. A SAS 70 audit is otherwise known as a(n):

a. Service organization audit.

b. Auxiliary audit.

c. Qualified audit.

d. Operational audit.

3. Generally accepted auditing standards are divided into three groups. Which of the following correctly pairs a group with a standard?

a. General, supervision

b. Field work, independence

c. Reporting, disclosure

d. All of the above.

4. Which of the following steps in a financial statement audit normally occurs first?

a. Assess management’s integrity.

b. Review the internal control system.

c. Perform compliance testing.

d. Evaluate management’s credentials.

5. A company’s financial statements implicitly involve several assertions by management that must be evaluated as part of auditing. Those assertions include: (i) existence or occurrence, (ii) completeness, (iii) ethical preparation.

a. i and ii only

b. i and iii only

c. ii and iii only

d. i, ii, and iii

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Solutions For Problems in Chapter 17