{Auditing} 21. The scope of an audit is the determination of the range of the activities and the period of records that are to be subjected to an audit examination". Which one of the following factors is not useful in determination of scope of audit? a. Reliable information b. Technical factors c. Entity aspects d. Legal requirement

{Auditing} 21. The scope of an audit is the determination of the range of the activities and the period of records that are to be subjected to an audit examination". Which one of the following factors is not useful in determination of scope of audit? a. Reliable information b. Technical factors c. Entity aspects d. Legal requirement

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process

Section: Chapter Questions

Problem 28CYBK

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Refer to Exhibit 2.5 and answer the following questions. a. (Sections 101, 104, and 105) How does the establishment and operation of the PCAOB help to ensure quality external audits? How will audit firm inspections and investigations by the PCAOB help ensure high audit quality? b. (Sections 201-203) How do Sections 201-203 address audit ()r independence concerns? c. (Section 206) What is a cooling-off period, and how does it address auditor independence concerns? d. (Section 301) How do the audit committee requirements help ensure effective corporate governance? e. (Sections 302 and 906) How do the officer certification requirements help to address the risk of fraud in publicly traded organizations? What is the likelihood that a CFO who is committing fraudulent financial reporting would sign the certification falsely, and what are your reactions to that possibility? f. (Section 401) How does this section relate to the Enron fraud? g. (Section 404) How do the management assessment and audit or attestation of internal controls contained in this section help to address the risk of fraud in publicly traded organizations? h. (Section 407) Why is it important that at least one member of the audit committee be a financial expert? What are the financial reporting implications if the audit committee does not have any individuals serving on it who possess financial expertise? i. (Section 802) How does this section relate to the Enron fraud?
11 - Which of the following statements is not among the characteristics of the audit function ?A) The audit is carried out by an expert and independent person. B) Auditing is a degree of conformity. C) Auditing is a comparison activity. D) Audit is the process of collecting information and evidence in a subjective way and evaluating these sources. E) A report is prepared after the end of the audit activity.
13. Which of the following is the independent auditor’s principal purpose for obtaining an understanding of internal control and assessing control risk in a financial statement audit? A To comply with generally accepted accounting principles B To obtain a measure of assurance of management’s integrity C To maintain a state of independence in mental attitude during audit D To determine the nature, timing and extent of subsequent audit work
22-What may be the possible purpose of using oral explanation in the audit documentation? O a. To assist conclusion reached by the auditor O b. To clarify information contained in audit documentation O c. All of the options O d. To support the work performed by the auditor
2. An auditor is required to obtain sufficient understanding of each component of an entity’s internal control system to plan the audit of the entity’s financial statements and to assess control risk for the associated assertions in the account balance, transaction class, and disclosure components of the financial statements. a. Define Internal Control b. For what purpose should an auditor’s understanding of the internal control components be used in planning an audit? c. What are an auditor’s documentation requirements concerning an entity’s internal control system and the assessed level of control risk
3. What are considerations you will observe in evaluating the internal control of an audit engagement? Explain
19-Which among the following is the most important limitation of an audit, which result in most of the audit evidence while the auditor draws conclusions? a. Management and others do not provide complete information intentionally/ unintentionally b. Audit is not an official investigation into alleged wrongdoings c. Auditor’s opinion is mostly persuasive rather than conclusive. d. The occurrence of non-compliance with laws and regulations
The scope of an audit includes: a. Reliable Information b. Legal Requirements c. Entity Aspects d. All options are correct
26. The auditor shall communicate with those charged with governance an overall approach and scope of the audit , which includes communicating about the___________ identified by the auditor. a. Agreements with management b. Material weaknesses c. Significant risks d. Accounting Entries
7. Each of the following steps should be performed prior to accepting an audit engagement except: Select one:a. Identifying special circumstances and unusual risks.b. Evaluating the integrity of management.c. Evaluating independence.d. Making preliminary judgments about materiality levels.
For each of the general audit procedures of (1) recalculation, (b) observation, (c) confirmation (accounts receivable, securities, or other assets),(d) inquiry, (e) inspection of internal documents, (f) recalculation, (g) reperformance, and (h) analytical procedures, Discuss one way the procedure could be misapplied or the auditorscould be misled in such a way as to render the work (audit evidence) misleading or irrelevant.
In the auditing process Select one: a. the criteria for evaluating information will not vary depending on the information being audited. b. the audit report communicates the auditor's findings to users. c. the types and amounts of evidence remain constant from audit to audit d. evidence are gathered by the auditor to determine whether the audited information is stated in accordance with SEC standards.