QUESTION 1 I. What can users of the audit report reasonably expect from the audited financial statements? The financial statements are complete and contain many of the important financial disclosures The financial statements are presented fairly according to the substance of GAAP The fiancial statements are free from all errors. DAll of the above .5 points QUESTION 2 What is the first phase in an audit? 1. A Client acceptance or client continuance. C B.Understanding the client. CUnderstanding internal controls C D Testing of account balances 2.5 points QUESTION 3 Which the following is not a reason for a public company to receive an audit? C A. Potential bias in providing information C B. Closeness between a user and the organization c C.Complexity of the processing systems 1. D.Remoteness between a user and the organization. 2.5 points QUESTION 4 What is the term used to describe a systematic process of objectively obtaining evidence regarding assertions about economic actions and events to ascertain the degree of 1. correspondence between those assertions and established criteria and communicating the results to interested users? c A.Internal audit C B. Financial statement audit C.Extermal audit C o D.Program audit 2.5 points