1- The presentation objective for cash relates to

Select answer from the options below

accounting frameworks.

cash transactions and cash balances.

cash transactions only.

the audit report.

2- Which of the following does NOT increase the risk of fraud occurring as it relates to cash in the bank?

Select answer from the options below

use of multiple cash registers

one person handling and counting all cash

large of amount of cash receipts

majority of payments made with bank transfers

3- The imprest petty cash fund

Select answer from the options below

is controlled by the accounting department.

is replenished when authorized petty cash vouchers are used for a cheque requisition.

is replenished when customers pay their accounts.

is used for asset purchases.

4- Kiting is possible when

Select answer from the options below

the auditor does not review bank transfers.

there is improper segregation of duties of issuing and recording cheques.

there is independent review of issue and recording of cheques.

bank transfers happen at year end.

5- Which of the following is NOT a characteristic that the person assigned the authority and responsibility of investing transactions should have?

Select answer from the options below

integrity

ability to assess investment risks

positive outlook on the economy

knowledge of investments

6- Vouching entries in the investment accounts to ensure they were recorded correctly is classified as a(n)

Select answer from the options below

test of details of balances.

test of details of transactions.

initial procedure.

analytical procedure.

7- Jeremy Smith, CPA, examines the disclosures of investments to ensure that all of the pledging of investments is included in the notes to the financial statements. Jeremy is gathering evidence related to the assertion of

Select answer from the options below

accuracy, valuation, and allocation.

completeness.

rights and obligations.

classification.

8- If there are a few immaterial transactions that make up the investment balance, auditors will assess inherent risk as

Select answer from the options below

non-existent.

low.

insignificant.

high.

9- Inflows of cash are represented by

Select answer from the options below

sales revenue and issue of shares transactions.

sales revenue and payroll transactions.

equipment sales and payroll transactions.

equipment purchases and sales transactions.

10- Which of the following does NOT describe the concept of lapping?

Select answer from the options below

misappropriation is always temporary

irregularity resulting in the misappropriation of cash receipts

usually associated with customer collections

deliberate act performed by an individual for their own benefit

11- At the end of the audit, the auditor reconsiders their assessment of internal control and fraud risk. To perform this evaluation, auditors must

Select answer from the options below

consider managements opinion on the significance of the qualitative factors involved.

consider the involvement of those charged with governance.

use professional scepticism.

use professional judgement.

12- Those charged with governance generally refers to

Select answer from the options below

the external auditors of the entity.

creditors of the entity.

the board of directors.

in-house lawyers.

13- If a company announces its intention to seek protection from creditors pursuant to the applicable laws, the company is

Select answer from the options below

not able to hire auditors.

a viable entity.

not a going concern.

a going concern.

14- After year end, and before the audit report date, a lawsuit is settled for an amount significantly lower than the amount that was accrued in the financial statements at year end. Which of the following is accurate?

Select answer from the options below

this is a type 2 subsequent event

the financial statements do not need to be adjusted as the settlement was lower than expected

only disclosure in the notes to the financial statements is necessary

accrued liabilities in the financial statements need to be adjusted to reflect the lower amount

15- An adverse opinion is issued when

Select answer from the options below

a GAAP departure causes the statements to be materially, but not pervasively misstated.

a GAAP departure causes the financial statements to be materially and pervasively misstated.

a scope limitation exists that has both a material and pervasive effect on the statements.

the financial statements present fairly the financial position of the entity.

16- Which of the following is NOT a role of those people who are charged with governance?

Select answer from the options below

supervision

direction

control

auditing

17- What is the impact if the auditor discovers that the client forgot to accrue the utility expense?

Select answer from the options below

net income is understated

revenue is understated

liabilities are understated

expenses are overstated

18- Which of the following is a type 2 subsequent event?

Select answer from the options below

amount received on an insurance claim that was being negotiated at year end

issuance of debt securities after year end

settlement of a lawsuit after the reporting period for an amount different than originally estimated

bankruptcy of a customer subsequent to year end, which would be considered when evaluating the adequacy of the allowance for doubtful accounts

19- Which of the following is NOT evaluated by the auditor when forming an opinion on the financial statements?

Select answer from the options below

effect of corrected misstatements

audit evidence obtained

whether the statements are prepared in accordance with the applicable reporting framework

effect of unrecorded misstatements

20- Which of the following is included in the introductory paragraph of the auditors report?

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auditors opinion on the fair presentation of the financial statements

title of financial statements that have been audited

date of the audit report

reference to summary of significant accounting policies