Auditing - Final - Multiple Choice

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Quizzes Created: 4 | Total Attempts: 6,428

Questions: 53 | Attempts: 3,555 | Updated: Mar 22, 2023

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Auditing - Final - Multiple Choice - Quiz

The final exams for the Audit class are just around the corner and the quiz below is designed to help you pass the quiz by getting rid of the cold feet you may be having. Give it a try and choose the right answer according to you for each question.

Questions and Answers

Auditing - Final - Multiple Choice

As a result of analytical procedures, the auditor determines that the gross profit percentage has declined from 30% in the preceding year to 20% in the current year. The auditor should:

After a CPA has determined that accounts receivable have increased as a result of slow collections in a "tight money" environment, the CPA will be likely to

The negative form of accounts receivable confirmation request is useful except when

The return of a positive confirmation of accounts receivable without an exception attests to the

When evaluating the adequay of the allowance for uncollectible accounts, an auditor recviews the entity's aging of receivables to support management's balance-related assertion of

Which of the following audit procedures will best uncover an understatement of sales and accounts receivables?

Mr. Murray decides to use stratified sampling. The reason for using stratified sampling rather than unrestricted random sampling is to

In an audit of financial statements, a CPA wil generally find stratified sampling techniques to be most applicable to

From prior experience, a CPA is aware that the accounts receivable trial balance contains a few unusually large balances. In using statistical sampling, the CPA's best course of action is to

A number of factors influence the sample size for a substantive test of details of an account balance. All other things being equal, which of the following would lead to a larger sample size?

Which of the following sample planning factors will influence the sample size for a test of details of balances for a specific account?EXPECTED AMOUNT MEASURE OFOF MISSTATEMENTS TOLERABLE MISSTATEMENT

A client erroneously recorded a large purchse twice. Which of the following internal control measures would be most likely to detect this error in a timely and efficient manner?

Which of the following is an internal control that will prevent paid cash disbursement documents from being presented for payment a second time?

In auditing accounts payable, an auditor's procedures most likely will focus primarily on management's assertion of

Which of the following audit procedures is best for identifying unrecorded trade accounts payable?

When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely is

Which of the following controls most likely will justify a reduced assessed level of control risk concerning plant and equipment acquisitions

Which of the following is not an internal control deficiency related to factory equipment?

With respect to an internal control measure that wil ensure accountability for fixed asset retirements, management should implement controls that include

Which of the following comparisons will be most useful to an auditor in aduting an entity's income and expense accounts?

The controler of Excello Manufacturing, Inc., wants to use analytical procedures to identify the possible existence of idle equipment or the possibility that equipment has been disposed of without having been written off. Which of the following ratios will best accomplish this objective?

Which of the following analytical procedures should be applied to the income statement?

In testing for unrecorded retirements of equipment, an auditor most likely will

Analysis of which account is least likely to reveal evidence related to unrecorded retirement of equipment?

In connection with the audit of the prepaid insurance account, which of the following procedures is usually not performed by the auditor?

Which of the follwing audit procedures is least likely to detect an unrecorded liability?

Which of the following best describes the independent auditor's approach to obtaining satisfaction concerning depreciation expense in the income statement?

Before expresing an opinion concerning the audit of income and expenses, the auditor will best proceed with the audit of ithe income statement by

In a company with materials and supplies that include a great number of items, a fundamental deficiency in control requirements will be indicated if

For control purposes, the quantities of materials ordered may be omitted from the copy of the purchse order that is

Which of the follwoing procedures will best detect the theft of valuable items from an inventory that consists of hundreds of different items selling for $1 to $10 and a few items selling for hundreds of dollars?

When an auditor tests a client's cost accounting reords, the auditor's tests are primarily designed to determine that

The accuracy of perpetual inventory master files may be established, in part, by comparing perpetual inventory records with

When evaluating inventory controls with respect to segregation of duties, a CPA wil be lest likely to

An auditor will be most likely to learn of slo-moving inventory through

An inventory turnover analysis is useful to the auditor because it may detect

A CPA auditing inventory may appropriately apply attributes sampling to estimate the

The audit step mot likely to receal the existence of contingent liabilities is

When obtaining evidence regarding litigation against a client, the CPA will be lest interested in determining

When a contingency is resolved subsequent to the issuance of audited financial statements, which correctly contained disclosure of the contingency in the footnotes base on information available at the date of issuance, the auditor should

A principal purpose of a letter of representation from management is to

The date of the management representation letter should coincide with the

Management's refusal to furnish a written representation on a matter that the auditor considers essential constitutes

Subsequent events for reporting purposes are defined as events that occur subsequent to the

An example of an event occurring in the period of the auditor's field work subsequent to the end of the year being audited that normally will not require disclosure in the financial statements or auditor's report is