Acc 403 Final Exam

Only available on StudyMode
  • Download(s) : 48
  • Published : May 19, 2013
Open Document
Text Preview
* Question 1
6 out of 6 points
| |
| An auditor who audits a business cycle that has low inherent risk should:Answer| | | | | Selected Answer:| increase the tolerable misstatement for the area.| Correct Answer:| increase the tolerable misstatement for the area.|

| | | |
* Question 2
6 out of 6 points
| |
| The five steps in applying materiality are listed below in random order. 1.| Estimate the combined misstatement.| 2.| Estimate the total misstatement in the segment.|
3.| Set preliminary judgment about materiality.|
4.| Allocate preliminary judgment about materiality to segments.| 5.| Compare combined estimate with preliminary judgment about materiality.|

The first three steps in correct sequence would be:Answer| | | | | Selected Answer:| 3, 4, 2|
Correct Answer:| 3, 4, 2|
| | | |
* Question 3
6 out of 6 points
| |
| Auditors are responsible for determining whether financial statements are materially misstated, so upon discovering a material misstatement they must bring it to the attention of:Answer| | | | | Selected Answer:| the client's management.|

Correct Answer:| the client's management.|
| | | |
* Question 4
6 out of 6 points
| |
| If it is probable that the judgment of a reasonable person will be changed or influenced by the omission or misstatement of information, then that information is, by definition of FASB Statement No. 2:Answer| | | | | Selected Answer:| material.|

Correct Answer:| material.|
| | | |
* Question 5
6 out of 6 points
| |
| Likely misstatements can result from:Answer| | | |
| Selected Answer:| Computation of the sampling error for the cash account | Differences between management's and an auditor's judgment about account balances | Projections of misstatements based on an auditor's tests of asample from a population| No| Yes| Yes|

|
Correct Answer:| Computation of the sampling error for the cash account | Differences between management's and an auditor's judgment about account balances | Projections of misstatements based on an auditor's tests of asample from a population| No| Yes| Yes|

|
| | | |
* Question 6
6 out of 6 points
| |
| Management must disclose material weaknesses in internal control in its audit report:Answer| | | | | Selected Answer:| if the weakness exists at the end of the year.| Correct Answer:| if the weakness exists at the end of the year.|

| | | |
* Question 7
6 out of 6 points
| |
| Which of the following is not one of the three primary objectives of effective internal control?Answer| | | | | Selected Answer:| assurance of elimination of business risk| Correct Answer:| assurance of elimination of business risk|

| | | |
* Question 8
6 out of 6 points
| |
| When auditing a private company, the auditor should obtain an understanding of internal control sufficient to:Answer| | | | | Selected Answer:| assess control risk.|
Correct Answer:| assess control risk.|
| | | |
* Question 9
6 out of 6 points
| |
| Which of the following is most correct regarding the requirements under Section 404 of the Sarbanes Oxley Act?Answer| | | | | Selected Answer:| The audits of internal control and the financial statements provide reasonable assurance as to misstatements.| Correct Answer:| The audits of internal control and the financial statements provide reasonable assurance as to misstatements.|

| | | |
* Question 10
6 out of 6 points
| |
| A control available in a small company, which may be necessitated because of lack of competent personnel, is:Answer| | | | | Selected Answer:| the owner-manager's direct involvement in the control process.| Correct Answer:| the owner-manager's direct involvement in the control process.|

| | | |
* Question 11
6 out of 6...
tracking img