Quiz based on Auditing and Assurance Services 14e by Arens
Unprofessional behavior.
An attitude of professional skepticism.
Due diligence.
A rule in the AICPA’s Code of Professional Conduct.
Introspective
Questioning
Intelligent
Unbelieving
In accordance with auditing standards.
As effectively as reasonably possible.
In a timely manner.
Only after an adequate investigation of the management team.
Greater for management fraud because managers are inherently more deceptive than employees.
Greater for management fraud because of management’s ability to override existing internal controls.
Greater for employee fraud because of the higher crime rate among blue collar workers.
Greater for employee fraud because of the larger number of employees in the organization.
Provide reasonable assurance that material misstatements will be detected.
Be a guarantor of the fairness in the statements.
Be equally responsible with management for the preparation of the financial statements.
Be an insurer of the fairness in the statements.
Important to the financial statements
Statistically significant to the financial statements
Material to the financial statements
Identified by the client
Violation of federal employment laws.
Violation of federal environmental regulations.
Violation of federal income tax laws.
Violation of civil rights laws.
Whether all of the current period’s transactions are recorded.
Whether transactions are recorded in the correct accounting period.
The proper cutoff between capitalizing and expensing expenditures.
The proper cutoff between disclosing items in footnotes or in account balances.
Inquire of management only at one level below those likely to be involved with the illegality.
Begin communication with the FASB in accordance with PCAOB regulations.
Consider accumulating additional evidence to determine if there is actually an illegal act.
Withdraw from the engagement.
Cash account.
Inventory account.
Income tax expense and liability accounts.
Retained earnings account.
Management fraud.
Theft of assets.
Defalcation.
Embezzlement.
Implied or expressed representations about accounts, transactions, and disclosures in the financial statements.
Stated in the footnotes to the financial statements.
Explicitly expressed representations about the financial statements.
Provided to the auditor in the assertions letter, but are not disclosed on the financial statements.
Occurrence
Classification and understandability
Accuracy
Completeness
Yes Yes
No No
Yes No
No Yes
More on discovering errors than employee fraud.
More on discovering employee fraud than errors.
Equally on discovering either one.
On the senior auditor for detecting errors and on the manager for detecting employee fraud.
Include audit procedures which have a strong probability of detecting illegal acts.
Still include some audit procedures designed specifically to uncover illegalities.
Ignore the issue.
Make inquiries of management regarding their policies for detecting and preventing illegal acts and regarding their knowledge of violations, and then rely on normal audit procedures to detect errors, irregularities, and illegalities.
The specific audit objectives are applicable to every account balance on the financial statements
The general audit objectives are applicable to every account balance on the financial statements.
The general audit objectives are stated in terms tailored to the engagement.
For any given class of transactions, usually only one audit objective must be met to conclude the transactions are properly recorded..
Presentation and disclosure matters
Classes of transactions and events during the period
Account balances
Proper classification of income statement accounts
Report it to the proper governmental authorities.
Consider the effects on the financial statements, including the adequacy of disclosure.
Withdraw from the engagement.
Issue an adverse opinion.
It is easier for the auditor to uncover fraud than errors.
It is easier for the auditor to uncover indirect-effect illegal acts than fraud.
The auditor’s responsibility for detecting direct-effect illegal acts is similar to the responsibility to detect fraud.
The auditor’s responsibility for detecting indirect-effect illegal acts is similar to the responsibility to detect fraud.
Most auditors are trained to audit cycles as opposed to entire financial statements.
The approach aids in the assignment of tasks to different members of the audit team.
The cycle approach is required by auditing standards.
The cycle approach allows the auditor to detect indirect-effect illegal acts.
Unrecorded transactions.
Incorrect postings of recorded transactions.
Counterfeit signatures on paid checks.
Fraud involving collusion.
Discuss the matter with the client’s legal counsel.
Obtain evidence about the potential effect of the illegal act on the financial statements.
Contact the local law enforcement officials regarding potential criminal wrongdoing.
Consider the impact of the illegal act on the relationship with the company’s management.
Transactions.
Authorizations.
Costs.
Cutoffs.
Yes Yes
No No
Yes No
No Yes
Issue an adverse audit report.
Issue a disclaimer of opinion.
Withdraw from the engagement.
Issue a qualified audit report.
Little
A significant
No
Various
Classification
Valuation and allocation
Rights and obligations
Completeness
Generally, the auditor is under no obligation to notify parties other than personnel within the client’s organization.
Generally, the auditor is under an obligation to inform the PCAOB.
Generally, the auditor is obligated to disclose the relevant facts in the auditor’s report.
Generally, the auditor is expected to compel the client to adhere to requirements of the Foreign Corrupt Practices Act.
Balance-related audit objectives are applied to account balances.
Transaction-related audit objectives are applied to classes of transactions.
Balance-related audit objectives are applied to the ending balance in balance sheet accounts.
Balance-related audit objectives are applied to both beginning and ending balances in balance sheet accounts.
Investors.
Management.
A prudent user.
The reader.
Test for monetary errors in the financial statements.
Prove that the accounts with material balances are classified correctly.
Prove that the trial balance is in balance.
Identify the details of the internal control system.
Agree with related subsidiary ledger amounts.
Are properly disclosed in accordance with GAAP.
Foot to the total in the account balance.
Agree with the total in the general ledger.
Existence relates to whether the amounts in accounts are understated.
Occurrence relates to whether balances exist.
Existence relates to whether amounts included exist.
Occurrence relates to whether the amounts in accounts occurred in the proper year.
Accuracy and cutoff.
Classification and classification.
Posting and summarization with accuracy.
Occurrence and occurrence.
Local law enforcement officials.
The Public Company Accounting Oversight Board.
The Securities and Exchange Commission.
All of the above.
The auditor has no responsibility for searching for indirect-effect illegal acts.
The auditor has the same responsibility for searching for indirect-effect illegal acts as any other potential misstatement that may occur.
Auditors have responsibility for searching for any illegal act, whether direct-effect or indirect-effect.
Discovery of indirect-effect illegal acts is usually easier than discovery of fraud.
The auditor is responsible for the failure to detect fraud only when such failure clearly results from nonperformance of audit procedures specifically described in the engagement letter
The auditor must extend auditing procedures to actively search for evidence of fraud in all situations.
The auditor must extend auditing procedures to actively search for evidence of fraud where the examination indicates that fraud may exist.
The auditor is responsible for the failure to detect fraud only when an unqualified opinion is issued.
The existence and completeness assertions emphasize different audit concerns.
Existence deals with overstatements and completeness deals with understatements.
Existence deals with understatements and completeness deals with overstatements.
The completeness assertion deals with unrecorded transactions.
No assurance that they will be detected.
The same reasonable assurance provided for other items.
Assurance that they will be detected, if material.
Assurance that they will be detected, if highly material.
At the beginning and end of the fiscal period.
Each start of the annual audit.
At January 1 and December 31.
At the origin and final disposition of the company.
Directly.
Only indirectly.
Both directly and indirectly.
Materially if direct; immaterially if indirect.
The audit was conducted in accordance with generally accepted accounting principles.
The financial statements are the client’s responsibility.
The client is guilty of contributory negligence.
The client is guilty of fraudulent misrepresentation.
Quiz Review Timeline (Updated): Feb 11, 2013 +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
Deloitte Audit Business Challenge
The Deloitte Audit Business Challenge quiz assesses knowledge on the relationships and distinctions between auditing, attest, and assurance services. It explores internal...
Questions:
34 |
Attempts:
537 |
Last updated:
Jan 30, 2023
|
Audit Theory Quiz Questions And Answers
Take this audit theory quiz with informative questions and answers today to level up your auditing game! A framework for auditing is provided by audit theories. It works on...
Questions:
15 |
Attempts:
6413 |
Last updated:
Apr 13, 2023
|
The Ultimate Auditing Knowledge Quiz!
One of the ways in which a business can keep track of its books of account is carrying out an audit and finding out if they reflect an accurate and fair view of the financial...
Questions:
28 |
Attempts:
467 |
Last updated:
Mar 22, 2023
|
Auditing Chapter 7
Quiz based on Auditing and Assurance Services 14e by Arens
Questions:
51 |
Attempts:
1835 |
Last updated:
Mar 22, 2023
|
Auditing And Assurance Services Quiz: Trivia!
What do you know about auditing and assurances? Assurance service is an individual professional service, typically offered by chartered or certified public accountants or...
Questions:
33 |
Attempts:
7816 |
Last updated:
Mar 22, 2023
|
Auditing Chapter 12 Quiz
Auditing quiz derived from the 12th chapter of the textbook Auditing and Assurance Services an Intergrated Approach by Arens.
Questions:
8 |
Attempts:
856 |
Last updated:
Mar 22, 2023
|
Wait!
Here's an interesting quiz for you.