The first phase of audit planning is risk assessment

Group of answer choices

True

False

Flag question: Question 2Question 23 pts

When the prospective client has previously been audited, auditing standards require that the successor auditor make certain inquiries of the predecessor auditor before accepting the engagement

Group of answer choices

True

False

Flag question: Question 3Question 33 pts

The Code of Professional Conduct does not allow an auditor to disclose confidential client information without the client's consent

Group of answer choices

True

False

Flag question: Question 4Question 43 pts

If the prospective client refuses to allow the predecessor auditor to communicate with the successor auditor, the successor auditor should have reservations about accepting the client

Group of answer choices

True

False

Flag question: Question 5Question 53 pts

In order to properly preplan the audit, the auditor must determine the engagement team requirements and ensure the independence of the audit team and audit firm.

Group of answer choices

True

False

Flag question: Question 6Question 63 pts

If the internal audit function is competent and objective, the auditor may generally rely on the work of an internal audit function in certain areas to reduce the amount of external audit work in these areas

Group of answer choices

True

False

Flag question: Question 7Question 73 pts

Audit evidence includes only written information used by the auditor in arriving at an opinion about the fairness of financial statements

Group of answer choices

True

False

Flag question: Question 8Question 83 pts

The auditor gathers audit evidence to test management's assertions

Group of answer choices

True

False

Flag question: Question 9Question 93 pts

Management assertions fall into four main categories

Group of answer choices

True

False

Flag question: Question 10Question 103 pts

The classification assertion refers to transactions and events being recorded in the correct accounting period

Group of answer choices

True

False

Flag question: Question 11Question 113 pts

The completeness assertion refers to ensuring that transactions and events that should have been recorded actually have been recorded

Group of answer choices

True

False

Flag question: Question 12Question 123 pts

The cutoff assertion relates to whether transactions and events have been recorded in the correct accounting period

Group of answer choices

True

False

Flag question: Question 13Question 133 pts

Materiality is based only on a quantitative analysis of the financial statements

Group of answer choices

True

False

Flag question: Question 14Question 143 pts

Hawkins requested permission to communicate with the predecessor auditor and review certain portions of the predecessor auditor's working papers. The prospective client's refusal to permit this will bear directly on Hawkins' decision concerning the

Group of answer choices

Adequacy of the preplanned audit program

Ability to establish consistency in application of accounting principles between years.

Apparent scope limitation

Integrity of management.

Flag question: Question 15Question 153 pts

In assessing whether to accept a client for an audit engagement, a CPA should consider

Group of answer choices

The current financial health of the prospective client.

The integrity of management

The CPA's overall engagement risk.

All of these should be considered.

Flag question: Question 16Question 163 pts

Evaluating a prospective client requires which of the following steps?

Group of answer choices

Communicate with the predecessor auditor.

Preplan the audit.

Establish the terms of the engagement

None of these.

Flag question: Question 17Question 173 pts

An auditor has withdrawn from an audit engagement of a publicly held company after finding fraud that may materially affect the financial statements. The auditor should set forth the reasons and findings in correspondence with the

Group of answer choices

Securities and Exchange Commission.

Client's legal counsel.

Stock exchanges where the company's stock is traded.

Audit committee of the board of directors.

Flag question: Question 18Question 183 pts

When a CPA is approached to perform an audit for the first time, the CPA should make inquiries of the predecessor auditor. This is a necessary procedure because the predecessor may be able to provide the successor with information that will assist the successor in determining

Group of answer choices

Whether the predecessor's work should be utilized.

Whether, in the predecessor's opinion, the financial statements are materially correct.

Whether, in the predecessor's opinion, the company's internal controls have been satisfactory

Whether the engagement should be accepted

Flag question: Question 19Question 193 pts

Which of the following should an auditor obtain from the predecessor auditor prior to accepting an audit engagement?

Group of answer choices

Analysis of balance sheet accounts.

Analysis of income statement accounts

All matters of continuing accounting significance

Facts that might bear on management integrity

Flag question: Question 20Question 203 pts

Vouching is used primarily to test which of the following assertions about classes of transaction?

Group of answer choices

Occurrence.

Completeness.

Authorization.

Classification.

Flag question: Question 21Question 2110 pts

____________are representations by management regarding recognition, measurement, and presentation of classes of transactions and events, account balances, and disclosures so that financials are in accordance with the applicable financial reporting framework.

Flag question: Question 22Question 2210 pts

Who is responsible for the financial statements

Flag question: Question 23Question 235 pts

Which is a function of working papers

Group of answer choices

to provide principal support for the representation in the auditor's report that the audit was conducted in accordance with GAAS

to aid in the planning, performance, and supervision of the audit

to provide the basis for the review of the quality of the work by providing a written documentation of the evidence supporting the auditor's significant conclusions

All of the above

Flag question: Question 24Question 245 pts

Appropriateness is a measure of the_____________.

Flag question: Question 25Question 255 pts

The auditor generally finds more predictability in the ratio and trend analysis in the examination of the:

Group of answer choices

Statement of Changes in Stockholders' Equity and Retained Earnings.

Income Statement.

Balance Sheet.

Statement of Cash Flows.

Flag question: Question 26Question 265 pts

Comparison of the financial information with budgeted amounts is a _________________________.