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ACC 490 Final Exam




Question;ACC 490 Final Exam;1.;An audit that involves obtaining and evaluating evidence about the efficiency;and effectiveness of an entity?s operating activities in relation to specified;objectives is a(n);2.;When providing audit services, the CPA is expected to be;3.;Which one of the following services is often performed on public companies?;interim financial statements and nonpublic companies? annual financial;statements?;4.;In the standard audit report, the auditor?s opinion on fairness pertains;5.;Auditor liability under the 1933 Securities Act extends to the;6.;An auditor may be liable to a client for breach of contract under which of the;following?;7.;Which of the following would be an example of a foreseeable party?;8.;Which of the following would not be considered an analytical procedure?;9.;The subject of the auditing procedure observing is least likely to be;10.;An auditor can use computer audit software to do all of the following except;11.;The title of a certain working paper is ?Proposed Adjusting Entries.? The use;of the word ?proposed? indicates that;12.;The importance of the accept/reject decision for a particular client is;reflected in the inclusion of ?acceptance and continuation of clients? as;13.;When considering whether to accept an engagement, the auditor should consider;the implications for accepting the engagement if;14.;A typical engagement letter should contain the following comment: Because of;the concept of reasonable assurance and because we will not perform a detailed;examination of all transactions, there is a risk that;15.;Which of the following best describes the auditor?s responsibilities concerning;related parties?;16.;In planning the audit, the auditor should assess materiality at two levels;17.;Professional standards recognize that a misstatement that is quantitatively;immaterial may be qualitatively material. In regard to these items;professional standards require the auditor to;18.;In general, as an account balance decreases, the amount of evidence required;will;19.;Which of the key financial ratios below measures the impact of financing decisions;on earnings?;20.;The auditor has some control over;21.;Which of the following is an example of how an analytical procedure may be;helpful in identifying accounts and assertions that are likely to contain;misstatements?;22.;If inherent risk is assessed as low, control risk is assessed as low and;analytical procedures risk is very low, the acceptable levels of test of;details risk would be;23.;The auditor has chosen the preliminary strategy of lower assessed control risk.;Which of the following is not a validly specified component of this strategy?;24.;In order to emphasize the importance of integrity and ethical values among all;personnel or an organization, the CEO and other top managers should do all of;the following except;25.;Management?s risk assessment should include the following special consideration;of the risks that can arise from changed circumstances except;26.;Which of the following is not an example of incompatible duties?;27.;When planning an audit of internal controls over financial reporting, the;auditor needs a comprehensive knowledge of the company and its environment.;This knowledge might include;28.;Which of the following tests of controls would be most effective in testing;controls designed to prevent checks from being issued or recorded for the wrong;amount?;29.;?A significant deficiency, or combination of significant deficiencies, that;results in more than a remote likelihood that a material misstatement of the;annual or interim financial statements will not be prevented or detected? is;the definition of;30.;Which of the following statements is true about an auditor?s responsibility to;communicate with respect to a public company?s internal controls?;31.;The nature of tests of controls relates to the type of evidence obtained. Which;of the following is not an example of a type of evidence relevant to tests of;controls?;32.;Who is responsible for establishing the process and controls for preparing;accounting estimates?;33.;Use of auditor judgment or of a risk matrix is necessary in revising planned;detection risk whenever;34.;In practice, the use of analytical procedures has proven to be;35.;Tests of details of transactions generally use evidence from;36.;The balance sheet account Inventories is related to which one of the following;income statement accounts?;37.;The most common objective of PPS sampling plans is to;38.;The reliability factor is based on the risk of;39.;The greatest impact on audit efficiency comes from the risk(s) of;40.;The main disadvantage of nonstatistical over statistical sampling in;substantive testing is the inability, when using nonstatistical sampling, to


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