auditing

1.  Which of the following should you consider when deciding whether to use the client’s internal auditors?

            a. to whom they report

            b. education       

            c. certification (cpa, cia, or cma)

            d. all of the above

 

2.  Which of the following is the use of analytical procedures not required?

            a. when planning the audit

            b. as a substantive test

            c. at the end of the audit as a type of reasonableness test

            d. all of the above are required

 

3.  The 10 audit standards :

            a. no longer are considered GAAS

            b. addresses the nature of the audit

            c. refers to the quantity of procedures

            d. none of the above

are correct

 

4.  Which of the following provides the greatest level of assurance?

            a. review

            b. projection

            c. audit

            d. compilation

 

5.  Which of the following would prevent you from accepting an audit engagement?

            a. unable to contact previous auditor

            b. weaknesses in internal control

            c. the presence of related party transactions

            d. management prevents you from sending confirmations

 

6.  Which of the following would be addressed to underwriters?

            a. management representation letter

            b. comfort letter

            c. attorney’s letter

            d. none of the above   

7.  Which of the following is a procedure you would perform while planning an engagement?

            a. tests of control

            b. set materiality level for accounts receivable

            c. research the integrity of management

            d. obtain a management representation letter

 

8.  Which of the following would you not include in an engagement letter?

            a. fees

            b. responsibilities of management and the auditors

            c. an overview of the audit procedures

            d. all of the above should be included

 

9.  Which of the following would indicate a possible related party transaction?

            a. the corporation sells land in exchange for a zero interest note          receivable.

            b. selling products to an individual at a volume discount

            c. issuing stock in exchange for legal services

            d. none of the above would alert you to a related party transaction

 

10. To whom should internal auditors report to?

            a. the board of directors

            b. the president of the company

            c. the controller

 

            d. the independent auditors