ACC 490 Final Exam
1. Most audit work in a financial statement audit consists of obtaining and evaluating evidence about
2. The existence of audit risk is recognized by the statement in the auditor's standard report that the
3. Analytical procedures enable the internal auditor to predict the
balance or quantity of an item. Information to develop this estimate can
be obtained by all of the following except
4. Analytical Procedures can be best categorized as
5. The risk that an auditor's procedures will lead to the conclusion
that a material misstatement does not exist in an account balance when,
in fact, such misstatement does exist is
6. Inherent risk and control risk differ from detection risk in that they
7. The acceptable level of detection risk is inversely related to the
8. As the acceptable level of detection risk decreases, an auditor may
9. Holding other planning considerations equal, a decrease in the
amount of misstatements in a class of transactions that an auditor could
tolerate most likely would cause the auditor to
10. Which of the following would an auditor most likely use in
determining the auditor's preliminary judgment about materiality?
11. Which of the following is a false statement about materiality?
12. The objective of tests of details of transactions performed as substantive tests is to
13. In testing the existence assertion for an asset, an auditor ordinarily works from the
14. An auditor observes the mailing of monthly statements to a client's
customers and reviews evidence of follow-up on errors reported by the
customers. This test of controls most likely is performed to support
management's financial statement assertion(s) of
15. Which of the following statements reflects an auditor's responsibility for detecting errors and fraud?
16. Which of the following circumstances most likely would cause an
auditor to consider whether material misstatements exist in an entity's
financial statements?
17. The established scope of the engagement should be sufficient to
satisfy the objectives of the engagement. When developing the objectives
of the engagement, the internal auditor should consider the
18. Which of the following is the best explanation of the difference, if any, between engagement objectives and procedures?
19. In planning an engagement, the internal auditor should establish
objectives and procedures to address the risk associated with the
activity. Risk is defined as
20. Writing an engagement work program occurs at which stage of the engagement?
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