Review Questions Multiple Choice Questions Comprehensive Cases
Chapter Four - Code of Ethics for Professional Accountants
Chapter Seven - Audit Evidence, Procedures and Documentation
Chapter Nine - Audit Sampling in Tests of Controls
Report on Examination of Prospective Financial Information
DEFINITION OF ASSURANCE SERVICES
Auditing and Other Assurance Services
DEFINITION AND OBJECTIVE OF AN ASSURANCE ENGAGEMENTS
REASONABLE AND LIMITED ASSURANCE ENGAGEMENTS
ASSERTION-BASED AND DIRECT REPORTING ENGAGEMENTS
ASSURANCE ENGAGEMENT ACCEPTANCE
Auditing and Other Assurance Services
ELEMENTS OF AN ASSURANCE ENGAGEMENT
The aforementioned elements are discussed in the following section:
Subject Matter and Subject Matter Information
Sufficient Appropriate Evidence
FACTORS AFFECTING THE PRACTITIONER'S PERFORMANCE OF AN ASSURANCE ENGAGEMENT
Sufficiency and Appropriateness of Audit Evidence
Assurance Engagement Risk
TYPES OF ASSURANCE ENGAGEMENTS
Auditing and Other Assurance Services
NON-ASSURANCE ENGAGEMENTS
REPORTS ON NON-ASSURANCE ENGAGEMENTS
MULTIPLE CHOICE QUESTIONS
Auditing and Other Assurance Services
Auditing and Other Assurance Services
CASE ONE - Evaluating and Planning an Assurance Engagement
CASE TWO - Proposing an Assurance Engagement
Chapter Two INTRODUCTION TO AUDITING AND FINANCIAL STATEMENT AUDIT
Auditing and Assurance Services
OBJECTIVE OF A FINANCIAL STATEMENT AUDIT
GENERAL PRINCIPLES OF A FINANCIAL STATEMENT AUDIT
SCOPE OF A FINANCIAL STATEMENT AUDIT
DEMAND FOR FINANCIAL STATEMENT AUDIT
REDUCING INFORMATION RISK
THE PHILOSOPHY OF AN AUDIT AND NOTION OF ACCOUNTABILITY, STEWARDSHIP AND AGENCY
ECONOMIC BENEFITS OF A FINANCIAL STATEMENT AUDIT
LIMITATIONS OF A FINANCIAL STATEMENT AUDIT
RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
ORIGIN AND HISTORY OF AUDITING
Auditing in Ancient Greece and Rome
Auditing in Medieval Period
Auditing During the Industrial Revolution
Early Auditing in the United States of America
Nineteen sixties to nineteen nineties
Nineteen nineties to present
Auditing and Assurance Services
MULTIPLE CHOICE QUESTIONS
Auditing and Assurance Services
Auditing and Assurance Services
Auditing and Assurance Services
Auditing and Assurance Services
Forty-six. Financial statements audit
Forty-seven. Which of the following is responsible for an entity's financial statements?
Fifty-one. The expertise that distinguishes auditors from accountants is in the
Fifty-three. The word auditing comes from the Latin audire, which means:
Fifty-four. Independent auditing can best be described as a
Fifty-five. A financial statement audit
Auditing and Assurance Services
Auditing and Assurance Services
CASE ONE - Elements of the Definition of Auditing
CASE TWO - Differentiating the Types of Auditor
PHILIPPINE ACCOUNTANCY ACT OF TWO THOUSAND FOUR
Objectives of Philippine Accountancy Act of two thousand four
Scope of Practice of Accountancy
Auditing and Other Assurance Services
Professional Regulatory Board of Accountancy
Exhibit three point two provides the qualifications of members of the Professional Regulatory Board of Accountancy.
Exhibit three point three provides the powers and functions of the Professional Regulatory Board of Accountancy.
· Regulation of accountancy in the Philippines;
· Examination, Registration and Licensure
Exhibit three point four provides the qualifications of any persons applying for the licensure examinations.
Exhibit three point five provides the scope of the Certified Public Accountant licensure examination.
Auditing and Other Assurance Services
ACCOUNTING AND AUDITING STANDARD SETTING COUNCIL (Republic Act Number nine thousand two hundred ninety-eight and its Implementing Rules and Regulations)
EDUCATION TECHNICAL COUNCIL (Republic Act Number nine thousand two hundred ninety-eight and its Implementing Rules and Regulations)
Auditing and Other Assurance Services
CONTINUING PROFESSIONAL DEVELOPMENT (Professional Regulation Commission Resolutions Number twenty nineteen-one hundred forty-six and twenty seventeen-one hundred thirty-two)
ACCREDITATION OF ACCOUNTING TEACHERS (Board of Accountancy Resolution Number eighty-eight Series of two thousand eight)
CONDUCT OF REFRESHER COURSE (Professional Regulatory Board of Accountancy Resolution Number twenty twenty-four six)
Qualified Educational Institutions
Auditing and Other Assurance Services
ADVERTISING FOR THE PHILIPPINE ACCOUNTANCY PROFESSION (Board of Accountancy Resolution Number one hundred twenty-six Series of two thousand eight)
Acceptable Advertising and Publicity
Prohibited Advertising and Publicity
QUALITY CONTROL STANDARDS (Philippine Standard on Quality Control one)
Firms' System of Quality Control
Elements of a System of Quality Control
Auditing and Other Assurance Services
Leadership Responsibilities for Quality within the Firm
Acceptance and Continuance of Client Relationships and Specific Engagements
Four. Which of the following is the least function of the Board of Accountancy?
Five. Which of the following is not a qualification of an applicant for the CPA licensure examination?
Six. Which of the following is not a requisite in applying for the CPA licensure examinations?
Seven. Republic Act nine two nine eight is known as the
Nine. The objectives of the Philippine Accountancy Act of two thousand four are the following, except:
Auditing and Other Assurance Services
Eleven. The following statements relate to Republic Act nine two nine eight. Which is incorrect?
Thirteen. The following statements relate to the submission of nominations to the Board of Accountancy. Which is correct?
Fourteen. The APO shall submit its nominations with complete documentation to the Commission not later than
Seventeen. The Professional Regulatory Board of Accountancy shall elect a vice chairman from among its members for a term of
Nineteen. No person shall serve the Professional Regulatory Board of Accountancy for more than
Auditing and Other Assurance Services
Auditing and Other Assurance Services
Auditing and Other Assurance Services
Chapter four CODE OF ETHICS FOR PROFESSIONAL ACCOUNTANTS
FUNDAMENTAL PRINCIPLES AND CONCEPTUAL FRAMEWORK
Auditing and Other Assurance Services
Auditing and Other Assurance Services
CONDUCT OF PROFESSIONAL ACCOUNTANTS IN PUBLIC PRACTICE
Auditing and Other Assurance Services
Engagement-specific safeguards
Auditing and Other Assurance Services
Fees and Other Types of Remuneration
Marketing Professional Services
Auditing and Other Assurance Services
Objectivity - All Services
Independence - Audit and Review Engagements
Auditing and Other Assurance Services
Auditing and Other Assurance Services
Family and Personal Relationships
Auditing and Other Assurance Services
Employment with an Audit Client
Auditing and Other Assurance Services
Recent Service with an Audit Client
Serving as a Director or Officer of an Audit Client
Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client
Threats and Safeguards for Long Association
Provision of Non-assurance Services to Audit Clients
Auditing and Other Assurance Services
Preparing Accounting Records and Financial Statements
Auditing and Other Assurance Services
Provision of Valuation Services to Audit Clients
Provision of Taxation Services to Audit Clients
Provision for Internal Audit Services to Audit Clients
Auditing and Other Assurance Services
Provision for Litigation Support Services to Audit Clients
Provision for Legal Services to Audit Services
Provision of Recruiting Services to Audit Clients
Provision of Corporate Finance Services to Audit Clients
Auditing and Other Assurance Services
Actual or Threatened Litigation
Auditing and Other Assurance Services
MULTIPLE CHOICE QUESTIONS
Fourteen. Intimidation threat
Nineteen. Which of the following is least likely to create a threat to independence?
Twenty-one. Which statement is incorrect regarding professional fees?
Twenty-three. Which of the following is not likely a threat to independence?
Twenty-five. Safeguards created by the profession, legislation or regulation, include the following, except
Twenty-six. Safeguards within the assurance client, include the following, except
Twenty-seven. Safeguards within the firm's own systems and procedures, include the following, except
Auditing and Other Assurance Services
Auditing and Other Assurance Services
Fifty-three. Legal services are defined as
Auditing and Other Assurance Services
Auditing and Other Assurance Services
Auditing and Other Assurance Services
Auditing and Other Assurance Services
Chapter Five ACCEPTING THE ENGAGEMENT AND PLANNING THE AUDIT
CLIENT ACCEPTANCE AND CONTINUANCE
Auditing and Other Assurance Services
Auditing and Other Assurance Services
ESTABLISHING AN UNDERSTANDING OF THE TERMS OF THE ENGAGEMENTS
The responsibilities of the management.
Other relevant information.
Obtaining an Understanding of the Entity and its Environment.
Determine the Audit Engagement Team Requirements
Ensuring the Independence of the Audit Team and Audit Firm
ASSESS RISKS AND ESTABLISH MATERIALITY
ASSESS A PRELIMINARY LEVEL FOR CONTROL RISK BY ACCOUNT AND ASSERTION
CONSIDER THE POSSIBILITY OF NON-COMPLIANCE WITH LAWS AND REGULATIONS
CONDUCT PRELIMINARY ANALYTICAL PROCEDURES
DEVELOP AN OVERALL STRATEGY AND PREPARE AN AUDIT PLAN
Reporting Objectives, Timing of the audit and Communications Required
With respect to materiality:
Auditing and Other Assurance Services
MULTIPLE CHOICE QUESTIONS
Auditing and Other Assurance Services
Eight. In an audit, communication between the predecessor auditor and incoming auditor should be
Twelve. An incoming auditor most likely would make specific inquiries of the predecessor auditor regarding
Thirteen. Which of the following should an auditor obtain from the predecessor auditor prior to accepting an audit engagement
Sixteen. An engagement letter should ordinarily include information on the objectives of the engagement and
Client's responsibility No
Seventeen. Which of the following would be easily likely to be included in the auditor's engagement letter?
Eighteen. Which of the following is not one of the principal contents of an engagement letter?
Nineteen. An engagement letter would not normally include
a. The risk that material misstatements may remain undiscovered.
Twenty-one. After preliminary audit arrangements have been made, an engagement confirmation letter Letter
Twenty-two. Arrangements concerning which of the following are least likely to be included in engagement letter?
Twenty-three. The use of an engagement letter is the best method of documenting the following except
Twenty-five. In a continuing engagement, the continuing auditor would most likely send a new engagement letter when
Twenty-seven. With respect to planning an audit, which of the following statements is always true?
Twenty-nine. The audit plan should (select the exception)
Thirty-one. Which of the following is not considered by the CPA when he makes an overall audit plan?
Thirty-two. In relation to audit planning, the auditor should document the following:
Thirty-three. This is the listing of all things which the auditor will use to gather sufficient appropriate audit evidence:
Thirty-four. The auditor should design the written audit program so that:
Thirty-five. The audit program usually cannot be finalized until the
Thirty-six. Which of the following is the correct order of steps in the audit process?
Activities Preliminary Engagement
Thirty-eight. Which of the following is not one of the reasons why auditor should perform preliminary engagement activities?
Thirty-nine. Which of the following is not normally performed in the preplanning or pre-engagement phase?
Forty. In making a decision to accept or continue with a client, the auditor should consider:
Forty-two. Which of the following factors most likely would cause an auditor not to accept a new engagement?
Forty-eight. Engagement letter are widely used in practice for:
Forty-nine. The primary purpose of the engagement letter is to:
Fifty. Which of the following is (are) valid reason why an auditor sends to his client an engagement letter?
Fifty-one. If an auditor believes that an understanding with the client has not been established, he should ordinarily
Fifty-two. In developing a preliminary audit strategy, an auditor should consider
Fifty-four. Audit programs should be designed so that
Auditing and Other Assurance Services
Fifty-five. An engagement letter is prepared with the interest(s) of in mind.
Fifty-six. The engagement letter will do one, some, or all of the following;
Chapter Six - Risk Assessment, Materiality and Preliminary Audit Strategies
USE OF THE AUDIT RISK MODEL
THE AUDITOR'S RISK ASSESSMENT PROCESS
The standard provides the following requirements:
The Required Understanding of the Entity and Its Environment, Including the Entity's Internal Control
Material Weakness in Internal Control
RISK ASSESSMENT PROCEDURES AND RELATED ACTIVITIES
One. INQUIRIES OF MANAGEMENT AND OF OTHERS WITHIN THE ENTITY
The required understanding of the entity and its environment, including the entity's internal control
Industry, Regulatory, and Other External Factors
Exhibit six point one. Industry, Regulatory and Other External Factors
Measurement and Review of the Entity's Financial Performance
Examples of Matters That the Auditor Might Consider When Developing an Understanding of the Entity's Measurement and
IDENTIFYING AND ASSESSING THE RISKS OF MATERIAL MISSTATEMENT DUE TO ERROR OR FRAUD
Misappropriation of Assets (Defalcation)
Risks that Require Special Audit Consideration
Conditions and Events that may Indicate Risks of Material Misstatement
Risks for Which Substantive Procedures Alone Do Not Provide Sufficient Appropriate Audit Evidence
Revision of Risk Assessment
Material Weakness in Internal Control
STEPS IN APPLYING MATERIALITY
Step one. Establish a Preliminary Judgment about Materiality
Step two. Determine Tolerable Misstatement
Step three. Estimate Likely Misstatements and Compare Totals to the Preliminary Judgment about Materiality
chapter six - Risk Assessment, Materiality and Preliminary Audit Strategies
RELATIONSHIP BETWEEN MATERIALITY AND AUDIT RISK
Five. Analytical procedures are used for the following purposes except
Seven. Analytical procedures used in planning an audit should focus on identifying.
Ten. An example of an analytical procedure is the comparison of.
Eleven. For initial engagements, PSA ten does not require the auditor to obtain evidence.
Twelve. According to PSA three twenty, materiality should be considered by the auditor when.
Thirteen. Which of the following statements is not correct about materiality?
Fourteen. In developing the preliminary level of materiality in an audit, the auditor will.
Seventeen. The concept of materiality with respect to the attest function.
Eighteen. The relationship between materiality and risk is ordinarily.
Twenty. When assessing materiality levels for audit purposes, the auditor should consider the.
Twenty-one. Relationship between control risk and detection risk is ordinarily.
Twenty-two. An auditor uses the assessed level of control risk to.
Twenty-three. What is the magnitude of audit risk if the inherent risk is point six zero, control risk point four zero and detection.
Twenty-five. As the acceptable level of detection risk decreases, an auditor may change the.
Twenty-six. As the acceptable level of detection risk decreases, an auditor may
Thirty. According to PSA three hundred fifteen, Risk assessment procedures means
Thirty-one. Risk assessment procedures would include all of the following except
Thirty-two. Which of the following statements about analytical procedures is incorrect?
Thirty-three. An auditor should design the written audit program so that
Chapter Seven AUDIT EVIDENCE, PROCEDURES AND DOCUMENTATION
CONCEPT OF AUDIT EVIDENCE
The Nature of Audit Evidence
The Appropriateness of Audit Evidence
The reliability of audit evidence is influenced by its source and by its nature which is dependent
Auditing and Other Assurance Services
The Sufficiency of Audit Evidence
The Evaluation of Audit Evidence
THE USE OF ASSERTIONS IN OBTAINING AUDIT EVIDENCE
Inspection of Records or Documents
Inspection of Tangible Assets
There are two common types of confirmation requests:
Information Normally Confirmed by the Auditors
PURPOSES OF WORKING PAPERS
FORM AND CONTENT OF WORKING PAPERS
The form and content of working papers depend on factors such as:
ADJUSTING AND RECLASSIFICATION ENTRIES
Indexing and Cross-Referencing
OWNERSHIP OF WORKING PAPERS
CONFIDENTIALITY OF WORKING PAPERS
MULTIPLE CHOICE QUESTIONS
NATURE AND PURPOSE OF INTERNAL CONTROL
COMPONENTS/ELEMENTS OF INTERNAL CONTROL
Auditing and Other Assurance Services
Factors affecting the control environment are:
Assignment of Authority and Responsibility
Circumstances or factors that may increase risk are as follows:
Three. CONTROL ACTIVITIES
Information Processing Controls
Four. INFORMATION AND COMMUNICATION SYSTEM
Five. MONITORING OF CONTROLS
LIMITATIONS OF INTERNAL CONTROL
Management Override of Internal Control
Personnel Errors or Mistakes
CONCEPT OF REASONABLE ASSURANCE
ILLUSTRATION OF A TYPICAL INTERNAL CONTROL SYSTEM
CONSIDERATION OF INTERNAL CONTROL IN A FINANCIAL STATEMENTS AUDIT
STAGES OF STUDY AND EVALUATION OF INTERNAL CONTROL
One. OBTAINING AN UNDERSTANDING OF INTERNAL CONTROL
Understanding the Control Environment
Understanding Monitoring of Controls
DOCUMENTING THE UNDERSTANDING OF INTERNAL CONTROL
Internal Control Questionnaires
Two. Assessing the Preliminary Level of Control Risk
Identifying Controls that will be Relied Upon
Three. Obtaining Evidential Matter to Support the Assessed Level of Control Risk
Timing of Tests of Controls
Extent of Tests of Controls
Four. Evaluating the Results of Evidential Matter
DOCUMENTING THE ASSESSED LEVEL OF CONTROL RISK
V. DETERMINING THE NECESSARY LEVEL OF DETECTION RISK
HOW ADEQUACY OR INADEQUACY OF INTERNAL CONTROL AFFECTS AUDIT PROCEDURES
COMMUNICATION OF MATERIAL WEAKNESSES IN INTERNAL CONTROL
MULTIPLE CHOICE QUESTIONS
AUDIT SAMPLING FOR TESTS OF CONTROLS
BASIC AUDIT SAMPLING CONCEPTS
TESTING PROCEDURES WHICH DO NOT INVOLVE SAMPLING Inquiry and observation
Analytical Review Procedures:
One-Hundred Percent Examination:
SAMPLING AND NONSAMPLING RISK
STATISTICAL AND NON-STATISTICAL SAMPLING
TYPES OF STATISTICAL SAMPLING TECHNIQUES
TYPES OF SELECTION METHOD FOR NON-STATISTICAL SAMPLING
ATTRIBUTE AND VARIABLES SAMPLING
FACTORS AFFECTING THE SAMPLE DESIGN
Expected error in the population must be.
EVALUATION OF SAMPLE RESULTS
INFERENCES TO BE DRAWN FOR THE POPULATION AS A WHOLE NOT BE ACCEPTABLE
BASIC STEPS IN AUDIT SAMPLING
Seven. Draw final conclusions.
STEPS IN THE APPLICATION OF SAMPLING IN TESTS OF CONTROLS
Three. Determine the sample size using the following inputs:
Four. Select sample items.
ILLUSTRATION OF ATTRIBUTE SAMPLING FOR TESTS OF CONTROLS
Step Two: Define the Population Characteristics
Step Three: Determine the Sample Size
Step Five: Perform the Audit Procedures
Step seven: Draw Final Conclusions
NON-STATISTICAL SAMPLING FOR TESTS OF CONTROL
OTHER SAMPLING APPLICATIONS FOR TESTS OF CONTROLS
MULTIPLE CHOICE QUESTIONS
Five. Which sampling plan requires no additional sampling once the first error is found?
Six. The risk of incorrect acceptance and the likelihood of assessing control risk too low relate to the
Nine. The most appropriate methodology for drawing a sample from three thousand time cards to check for signatures would be
Eleven. Which one of the following is not an important consideration in determining the appropriate sample size?
Fourteen. For which of the following audit tests would an auditor most likely use attribute sampling?
Fifteen. Which of the following statistical selection techniques is least desirable for use by an auditor?
Sixteen. If certain forms are not consecutively numbered
Eighteen. Which of the following statements is correct concerning statistical sampling in tests of controls?
RISKS IN SUBSTANTIVE TESTS
TYPES OF STATISTICAL TECHNIQUES
PROBABILITY-PROPORTIONAL-TO-SIZE (PPS) SAMPLING
STEPS IN THE APPLICATION OF SAMPLING IN SUBSTANTIVE TESTS
Three. Determine the sample size using the following inputs:
APPLICATION OF THE STEPS USING PPS TECHNIQUE FOR SUBSTANTIVE TESTS
Step Two: Define the Population Characteristics
Step Three: Determine the Sample Size
Specifically, the sample size for PPS may be computed as follows:
Risk of Incorrect Acceptance
Performance Step Four: Select Sample Items
Step Five: Perform the Audit Procedures
U L M equals P M plus B P plus L A
U L M equals upper limit on misstatement P M equals projected misstatement B P equals basic precision L A equals incremental allowance
Projected misstatement (P M)
Allowance for sampling risk
APPLICATION OF THE STEPS USING CLASSICAL VARIABLES TECHNIQUE FOR SUBSTANTIVE TESTS
MEAN-PER-UNIT ESTIMATION (M P U)
The following formulas are used in the M P U estimation:
Population standard deviation
Sample standard deviation
Calculation of planned allowance for sampling risk (A)
Adjusted Allowance for Sampling Risk (A')
ILLUSTRATION OF M P U ESTIMATION (Using the same example in P P S)
Calculation of planned allowance for sampling risk (A)
Determining the Sample Size
ILLUSTRATION OF DIFFERENCE ESTIMATION
USING OF RATIO AND DIFFERENCE ESTIMATION
NONSTATISTICAL SAMPLING FOR SUBSTANTIVE TESTS
MULTIPLE CHOICE QUESTIONS
Probability Proportional to Size
Seventeen. The measure of variability of a statistical sample that serves as an estimate of the population variability is the
Twenty-three. The use of ratio estimation sampling technique is most effective when
Twenty-five Ram has decided to use PPS sampling. Ram plans to use the following PPS sampling table:
Twenty-nine. Monetary-unit sampling is most useful when the auditor
Thirty-two. Which of the following techniques could be used to estimate the standard deviation for a sampling plan?
Thirty-seven. For which of the following sample results is sampling risk the smallest?
a. Individual accounts are not assigned a number, but are listed only alphabetically.
Thirty-nine. Which of the following statements is correct concerning PPS sampling?
Forty. Ratio estimation sampling would be inappropriate to use to project the peso error in a population if
Forty-one. Which of the following techniques could be used to estimate the standard deviation for a sampling plan?
Forty-two. Which of the following would be designed to estimate a numerical measurement of a population, such as a peso value?
Forty-five. The use of the ratio estimation sampling technique is most effective when
UNIQUE CHARACTERISTICS OF SPECIFIC ELECTRONIC DATA PROCESSING SYSTEMS
IMPACT OF COMPUTERS ON ACCOUNTING SYSTEMS
Consistency of Performance
Systems Generated Transactions
Documents are Not Maintained in Readable Form
Reports can be Generated Easily
INTERNAL CONTROL IN THE COMPUTER INFORMATION SYSTEM
INTERNAL CONTROL OVER EDP ACTIVITIES
Systems Development and Documentation Controls
BASIC APPROACH TO THE AUDIT OF ELECTRONICALLY PROCESSED DATA
EFFECTS OF COMPUTERS ON THE AUDIT PROCESS
. LACK OF TRANSACTION TRAILS
# UNIFORM PROCESSING OF TRANSACTIONS
AUDITING CLIENTS THAT USE COMPUTER INFORMATION SYSTEM (CIS)
OBTAINING AN UNDERSTANDING OF INTERNAL CONTROL IN A CIS ENVIRONMENT
DOCUMENTING THE UNDERSTANDING OF INTERNAL CONTROL IN A CIS ENVIRONMENT
ASSESSING THE PRELIMINARY LEVEL OF CONTROL RISK.
Audit Around the Computer
Audit Through the Computer
OBTAINING EVIDENTIAL MATTER TO SUPPORT THE ASSESSED LEVEL OF CONTROL RISK
Procedures to Test General Control Activities
Procedures to Test Application Control Activities
EVALUATING THE RESULTS OF EVIDENTIAL MATTER
Documenting the Assessed Level of Control Risk
DETERMINING THE NECESSARY LEVEL OF DETECTION RISK
AUDIT TECHNIQUES USING ELECTRONIC DATA PROCESSING
Systems Control Audit Review Files
Tagging and Tracing Transactions
ELECTRONIC COMMERCE - EFFECT ON THE AUDIT OF FINANCIAL STATEMENTS
UNDERSTANDING THE ENTITY AND ITS ENVIRONMENT
THE ENTITY'S BUSINESS ACTIVITIES AND INDUSTRY
THE ENTITY'S E-COMMERCE STRATEGY
THE EXTENT OF THE ENTITY'S E-COMMERCE ACTIVITIES
THE ENTITY'S OUTSOURCING ARRANGEMENTS
MULTIPLE CHOICE QUESTIONS
Chapter twelve USING THE WORK OF OTHERS
AUDITS OF GROUP FINANCIAL STATEMENTS (INCLUDING THE WORK OF COMPONENT AUDITORS)
Overall Responsibility of the Group Auditor
Deciding to Serve as the Group Auditor
Developing the Overall Audit Strategy and Audit Plan
Understanding the Group, Its Components and Their Environments
Understanding Component Auditors
Responding to Assessed Risks
Determining the Coverage of Components and the Type of Work to Be Performed
Involvement of the Group Engagement Team in the Component Auditor's Work
Communication Between Auditors
Evaluating the Sufficiency and Appropriateness of Audit Evidence Obtained
Communications Between Group Auditors and Group Management and Those Charged with Governance
USING THE WORK OF AN AUDITOR'S EXPERT
Examples of Activities that Involve the Work of Experts
The Competence, Capabilities and Objectivity of the Auditor's Expert
Obtaining an Understanding of the Field of Expertise of the Auditor's Expert
Agreement with the Auditor's Expert
Evaluating the Adequacy of the Auditor's Expert's Work
Reference to an Auditor's Expert in the Auditor's Report
USING THE WORK OF INTERNAL AUDITORS
Determining Whether and to What Extent to Use the Work of the Internal Audit Function
Evaluating the Internal Audit Functions
Using the Work of the Internal Audit Function
Determining Whether and to What Extent to Use the Internal Auditors to Provide Direct Assistance
Responsibilities of the External Auditor Using Internal Auditors to Provide Direct Assistance
MULTIPLE CHOICE QUESTIONS
CASE TWO - Why Both Internal Auditing and a Financial Statement Audit?
Chapter Thirteen OTHER AUDIT CONSIDERATIONS
AUDITING ACCOUNTING ESTIMATES AND RELATED DISCLOSURES
Risk Assessment Procedures and Related Activities
Identifying and Assessing the Risks of Material Misstatement
Responses to the Assessed Risks of Material Misstatement
Further Substantive Procedures to Respond to Significant Risks: Estimation Uncertainty
Further Substantive Procedures to Respond to Significant Risks: Recognition and Measurement Criteria
Evaluating the Reasonableness of the Accounting Estimates and Disclosures
Indicators of Possible Management Bias
Audit Documentation and Written Representations
INITIAL AUDIT ENGAGEMENTS - OPENING BALANCES
Audit Procedures: Opening Balances
Audit Procedures: Consistency of Accounting Policies
Audit Procedures: Relevant Information in the Predecessor Auditor's Report
Audit Conclusions and Reporting
Modifications to Opinions - Opening Balances
MULTIPLE CHOICE QUESTIONS
Ten. Who is responsible for establishing the process and controls for preparing accounting estimates?
Fourteen. The audit evidence available to detect a material misstatement in an accounting estimate will often be
Sixteen. When auditing the fair value of an asset or liability, valuation issues ordinarily arise at the point of
Seventeen. An auditor should obtain sufficient knowledge to an entity's accounting system to understand the
Twenty. Which of the following matters is an auditor required to communicate to an entity's audit committee?
Chapter fourteen COMPLETING THE AUDIT AND OTHER POST-AUDIT RESPONSIBILITIES
REVIEW FOR RELATED PARTY TRANSACTIONS
REVIEW FOR SUBSEQUENT EVENTS FOR AUDIT OF FINANCIAL STATEMENTS
Auditor's Responsibility Regarding Subsequent Events
Audit Procedures for Subsequent Events
INQUIRY REGARDING LITIGATION AND CLAIMS
Basic Elements of a Management Representation Letter
Doubt as to the Reliability of Written Representations
Requested Written Representations Not Provided
Written Representations about Management's Responsibilities
EVALUATING FINDINGS, FORMULATING AN OPINION AND DRAFTING THE AUDIT REPORT
ANALYTICAL PROCEDURES IN THE OVERALL OR FINAL REVIEW STAGE
GOING CONCERN CONSIDERATIONS
FINAL ASSESSMENT OF AUDIT RESULTS
EVALUATING FINANCIAL STATEMENT PRESENTATION AND DISCLOSURES
INDEPENDENT ENGAGEMENT QUALITY REVIEW
COMMUNICATIONS OF AUDIT MATTERS WITH THOSE CHARGE WITH GOVERNANCE
FACTS DISCOVERED AFTER THE FINANCIAL STATEMENTS HAVE BEEN ISSUED
MULTIPLE CHOICE QUESTIONS
CASE TWO - Going Concern Considerations
Chapter fifteen REPORTS ON AUDITED FINANCIAL STATEMENTS
STANDARD AUDIT REPORT WITH AN UNMODIFIED OPINION
Forming an Opinion on the Financial Statements
Applicable Financial Reporting Framework
Extremely Rare Circumstances when Applying the Financial Reporting Framework Results in Misleading Financial Statements
Auditor's Report for Audits Conducted in Accordance with Both Auditing Standards of a Specific Jurisdictions and PSAs
Auditing and Assurance Services
Unaudited Supplementary Information Presented with the Financial Statements
BASIC ELEMENTS OF A STANDARD AUDIT REPORT WITH AN UNMODIFIED OPINION
Responsibilities of Management for the Financial Statements
Auditor's Responsibilities for the Audit of the Financial Statements
Other Reporting Responsibilities
Name of the Engagement Partner
Date of the Auditor's Report
Auditor's Report on Financial Statements of a Listed Entity Prepared in Accordance with a Fair Presentation Framework
INDEPENDENT AUDITOR'S REPORT
Material Uncertainty Related to Going Concern
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Expanded description of the auditor's
Chapter fifteen - Auditor's Report on a Financial Statements
Report on Other Legal and Regulatory Requirements
COMMUNICATING KEY AUDIT MATTERS IN THE INDEPENDENT AUDITOR'S REPORT
Determining Key Audit Matters
Communicating Key Audit Matters
Required Elements in the Description of a Key Audit Matter
EXHIBIT fifteen point two Illustrative Example of a Key Audit Matter
EMPHASIS OF MATTER PARAGRAPHS AND OTHER MATTER PARAGRAPHS
The Relationship Between Emphasis of Matter Paragraphs and Key Audit Matters in the Auditor's Report
Placement of Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Auditor's Report
Emphasis of Matter Paragraphs
Report on the Audit of the Financial Statements
Basis for Qualified Opinion
AUDIT REPORTS WITH MODIFICATIONS TO THE AUDITOR'S OPINION
Circumstances When a Modification to the Auditor's Opinion is Required
Types of Financial Statement Auditor's Reports
The Effect of Materiality on Financial Statements Audit Reporting
Inability to Obtain Sufficient Appropriate Audit Evidence Scope Limitation
Prohibition on Issuing a Piecemeal Opinion
Form and Content of the Auditor's Report when the Opinion is Modified
Qualified Opinion due to a Material Misstatement of the Financial Statements
Basis for Qualified Opinion
Qualified Opinion due to the Auditor's Inability to Obtain Sufficient Audit Evidence Regarding a Foreign Associate
Adverse Opinion due to a Material Misstatement of the Consolidated Financial Statements
Sample Modified Auditor's Report on Corresponding Figures
Basis for Qualified Opinion
Prior Period Financial Statements Audited by a Predecessor Auditor
Prior Period Financial Statements Not Audited
OTHER INFORMATION (OTHER THAN FINANCIAL STATEMENTS AND AUDITOR'S REPORT) INCLUDED IN AN ENTITY'S ANNUAL REPORT
Examples of Amounts or Other Items that May Be Included in the Other Information
Obtaining the Other Information
Reading and Considering the Other Information
Responding When a Material Inconsistency Appears to Exist or Other Information Appears to Be Materially Misstated
Responding When the Auditor Concludes That a Material Misstatement of the Other Information Exists
Part fifteen - Auditor's Report on a Financial Statements
MULTIPLE CHOICE QUESTIONS
Eight. The following statements relate to the date of the auditor's report. Which is false?
Thirteen. The auditor's report should be addressed
Fifteen. The existence of audit risk is recognized by the statement in the auditor's report that the auditor
Eighteen. The date of the CPA's opinion on the financial statements of his or her client should be the date of the
Twenty. An emphasis of matter paragraph of an auditor's report describes an uncertainty as follows:
Twenty-five. When an auditor expresses an adverse opinion, the opinion paragraph should include
Thirty-three. A CPA will issue an adverse auditor's opinion if
Thirty-four. In which of the following circumstances would an auditor be most likely to express an adverse opinion?
" Under which of the following circumstances would a disclaimer of opinion not be appropriate?
Thirty-six. Which statement is incorrect regarding corresponding figures?
CASE TWO - Analyzing Audit Report
Independent Auditors' Report
Chapter sixteen OTHER SERVICES AND REPORTS
AUDITOR'S REPORT ON SPECIAL PURPOSE AUDIT ENGAGEMENTS
Reports on Financial Statements Prepared In Accordance With Other Comprehensive Basis of Accounting
Reports on a Component of Financial Statements
Sample Reports on Components of Financial Statements - Schedule of Accounts Receivable
Reports on Compliance with Contractual Agreements Related to Audited Financial Statements
Sample Reports on Compliance - Separate Report
Sample Reports on Compliance - Report Accompanying Financial Statements
Reports on Summarized Financial Statements
ENGAGEMENTS TO EXAMINE PROSPECTIVE FINANCIAL INFORMATION
Types of Prospective Financial Information
Auditor's Assurance Regarding Prospective Financial Information
Knowledge of the Business
Presentation and Disclosure
Report on Examination of Prospective Financial Information
ENGAGEMENTS TO REVIEW FINANCIAL STATEMENTS
Objective of a Review Engagement
General Principles of a Review Engagement
Conclusions and Reporting
Exhibit sixteen point ten is an illustration of review report with an unqualified opinion.
ENGAGEMENTS TO PERFORM AN AGREED-UPON PROCEDURES REGARDING FINANCIAL INFORMATION
Objective of an Agreed-Upon Procedures Engagement
General Principles of an Agreed-Upon Procedures Engagement
Defining the Terms of the Engagement
ENGAGEMENTS TO COMPILE FINANCIAL INFORMATION
Objective of a Compilation Engagement
General Principles of a Compilation Engagement
Defining the Terms of the Engagement
Responsibility of Management
Reporting on a Compilation Engagement
COMPILATION REPORT TO ...
MULTIPLE CHOICE QUESTIONS
CASE TWO - Reports on Prospective Financial Statements