1.The phrase "generally accepted accounting principles" is an accounting term that

Encompasses the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time.

Is included in the audit report to indicate that the audit has been conducted in accordance with generally accepted auditing standards (GAAS).

Provides a measure of conventions, rules, and procedures governed by the AICPA.

Includes broad guidelines of general application but not detailed practices and procedures.

2.A detection risk of 1.5 or 150% means _______.

auditors will need to undertake 1.5 times the audit procedures planned in the initial stages of the audit

auditors will perform extensive detailed testing of related account balances and use larger sample sizes because a 1.5 detection risk is a low detection risk

there would be a 150% risk that the auditors' procedures will be effective in detecting a material misstatement

there would be a 150% risk that the auditors' procedures will not be effective in detecting a material misstatement

3.Should the client have internal controls in place to ensure related parties are being identified? None of these answer choices are correct.

Yes, and the client is required to disclose them.

No, not necessarily.

Yes, but the client in under no obligation to disclose them.

4.Which of the following most likely would cause an auditor to consider whether a client's financial statements contain material misstatements?

Management did not disclose to the auditor that it consulted with other accountants about significant accounting matters.

Audit trails of computer-generated transactions exist only for a short time.

The chief financial officer will not sign the management representation letter until the last day of the auditor's fieldwork.

The results of an analytical procedure disclose unexpected differences.