Audit Exam

9528 WordsOct 11, 201339 Pages
Audit exam 1 Study online at 1. A Which is usually included in an engagement letter? (A reference to GAAP/A reference to GAAS) A. Yes/Yes B. No/No C. Yes/No D. No/Yes 2. A Which of the following statements is true? A) Auditors have generally found that the most effective and efficient way to conduct an audit is to obtain some assurance for each class of transaction and for the ending balance of the related account. B) Management 's assertions follow and are closely related to the audit objectives. C) The auditor 's primary responsibility is to find and disclose fraudulent management assertions. D) Assertions about presentation and disclosure deal with whether the accounts have been included in…show more content…
12. A Why does the auditor divide the financial statements into smaller segments? A) Using the cycle approach makes the audit more manageable. B) Most accounts have few relationships with others and so it is more efficient to break the financial statements into smaller pieces. C) The cycle approach is used because auditing standards require it. D) All of the above are correct. 13. A When using monetary-unit sampling, the recorded dollar population is a definition of all the items in the: A) population. B) population which the auditor has included in the sample. C) population which contain errors. D) sample which contain errors. 14. A The most important general ledger account included in and affecting several cycles is the: A) cash account. B) inventory account. C) income tax expense and liability accounts. D) retained earnings account. 15. A Which of the following best describes tests of details of balances? A) audit procedures designed to test for monetary misstatements in the accounts summarized in the financial statements B) audit procedures designed to test for the monetary amounts of transactions C) audit procedures designed to test for reasonableness of account balances D) audit procedures designed to test for effectiveness in recording accounting information 16. A Tests of details of balances are specific audit procedures

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