Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. An audit in accordance with the Single Audit Act does not involve reporting upon: a. Compliance with provisions of laws that may have a

1. An audit in accordance with the Single Audit Act does not involve reporting upon: a. Compliance with provisions of laws that may have a direct and material affect on each major federal financial assistance program. b. Financial statements. c. Internal control over operations. d. Schedule of expenditures of federal awards. 2. The underwriter of a securities offering may request that an auditor perform specified procedures and supply certain assurances concerning unaudited information contained in a registration statement. The auditor's response to such a request is commonly called a: a. Report under federal security statutes. b. Comfort letter. c. Review of interim financial information. d. Compilation report for underwriters. 3. An auditor suspects that certain client employees are ordering merchandise for themselves over the Internet without recording the purchase or receipt of the merchandise. When vendors' invoices arrive, one of the employees approves the invoices for payment. After the invoices are paid, the employee destroys the invoices and the related vouchers. In gathering evidence regarding the fraud, the auditor most likely would select items for testing from the file of all: a. Cash disbursements. b. Approved vouchers. c. Receiving reports. d. Vendors' invoices. 4. Changes in capital stock accounts should normally be approved by: a. The board of directors. b. The audit committee. c. The stockholders. d. The president. 5. During a review of the financial statements of a non-public entity, the CPA finds that the financial statements contain a material departure from generally accepted accounting principles. If management refuses to correct the financial statement presentations, the CPA should: a. Disclose the departure in a separate paragraph of the report. b. Issue an adverse opinion. c. Attach a note explaining the effects of the departure. d. Issue a compilation report. 6. Which of the following procedures is usually the first step in reviewing the financial statements of a nonpublic entity? a. Make preliminary judgments about risk and materiality to determine the scope and nature of the procedures to be performed. b. Obtain a general understanding of the entity's organization, its operating characteristics, and its products or services. c. Assess the risk of material misstatement arising from fraudulent financial reporting and the misappropriation of assets. d. Perform a preliminary assessment of the operating efficiency of the entity's internal control activities. 7. For a continuing audit client, when a complete set of financial statements is presented on a comparative basis for two years, the auditors' opinion would refer to: a. Only the current year under audit. b. Either one or both years at the option of the auditors. c. Each of the two years plus the preceding year. d. Each of the years in the two-year period. 8. In auditing the balance sheet, most revenue and expense accounts are also audited. Which accounts are most likely to be audited when auditing Accounts Receivable? a. Sales and Cost of Goods Sold. b. Interest and Bad Debt Expense. c. Sales and Bad Debt Expense. d. Interest and Cost of Goods Sold. 9. Which of the following is not required of an individual seeking to become a certified internal auditor? a. Two years work experience in internal auditing or its equivalent. b. Successful completion of a two-day examination. c. A baccalaureate degree from an accredited college. d. One year of supervisory experience. 10. When an auditor does not confirm material accounts receivable, but is satisfied by the application of alternative auditing procedures, she normally should: a. Issue an unmodified opinion, but disclose elsewhere in the report this departure from a customary procedure. b. Issue an unmodified opinion with no reference to this omission. c. Issue a qualified opinion or a disclaimer, depending on the materiality of the receivables. d. Issue an adverse opinion

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Eoc Only Davis Managerial Accounting

Authors: Charles E. Davis, Elizabeth Davis

2nd Edition

111883464X, 978-1118834640

More Books

Students also viewed these Accounting questions