Gleim Study Unit 4 Multiple Choice

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After identifying a significant related party transaction outside the entity’s normal course of business, an auditor should
Evaluate the business purpose of the transaction.

In auditing related party transactions, an auditor ordinarily places primary emphasis on
The adequacy of the disclosure of the related party transactions.

Subsequent to issuing a report on audited financial statements, a CPA discovers that the accounts receivable confirmation process omitted a number of accounts that are material, in the aggregate. Which of the following actions should the CPA take immediately?
Perform alternative procedures to verify account balances.

An auditor might consider the procedures performed by the internal auditors because
They
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When a management’s specialist has assumed full responsibility for taking the client’s physical inventory, reliance on the specialist’s work is acceptable if
The auditor conducted the same audit tests and procedures as would have been applicable if the client employees took the physical inventory.

When assessing an internal auditor’s competence, an auditor ordinarily obtains information about all of the following except
Access to information about related parties.

When assessing the internal auditors’ competence, the auditor should obtain information about the Educational background and professional certification of the internal auditors.

After an audit report is released, an auditor discovers that an important audit procedure was not performed. Which of the following procedures is acceptable in this situation? No further action is necessary if the audit report can still be supported.

Which of the following circumstances most likely would require an auditor to apply an omitted procedure after the audit report issuance date? The auditor’s report is unsupported as a result of the omitted procedure. When assessing an internal auditor’s objectivity, an auditor should

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Consider the organizational level to which the internal auditor reports.

Hill Corporation has hired Jones, a CPA, to audit its financial statements for year end. Jones, when searching for related party transactions, should seek

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