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ACC492 Final Exam (Score: 100%)

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Question;1. The specific audit objective that all purchases and cash disbursements made;during the period were recorded relates to;existence;or occurrence.;presentation and disclosure.;rights and obligations.;completeness.;2. The use of the computer to compare production;hours to direct labor hours on daily production reports relates to the;rights;and obligations assertion.;completeness;assertion.;existence or occurrence assertion.;valuation;or allocation assertion.;3. During the count of cash on hand, it is NOT necessary for the auditor to;insist;on the presence of the custodian of the cash throughout the count.;insist on the presence of an internal auditor;throughout the count.;obtain;a signed receipt from the custodian on return of the funds.;control;both cash and non-cash negotiable instruments held by the client.;4. By definition, subsequent events occur between;the;report date and the date the report is issued.;the;interim and balance sheet date.;the;balance sheet date and the report date.;the balance sheet date and the date the report;is issued.;5. The expenditure cycle would include;payroll;transactions.;payments by check.;the;purchase of another entity?s stocks.;the;purchase of treasury stock.;6. The specific account balance audit objective, plant assets and related expenses are;properly identified and classified in the financial statements, relates;to the;presentation or disclosure assertion.;existence;or occurrence assertion.;rights;and obligations assertion.;completeness;assertion.;7. The specific account balance audit objective, the entity owns or has rights to all recorded;plant assets at the balance sheet date, relates to the;rights and obligations assertion.;existence;or occurrence assertion.;completeness;assertion.;valuation;or allocation assertion.;8. When inventories are material and the auditor;does not observe the inventory at or near the year-end, professional standards;require the auditor to;disclaim;an opinion on the financial statements.;observe some physical counts of the inventory.;thoroughly;test the accounting records.;resign;from the engagement.;9. All sales, cash receipts, and sales adjustments;are accurately valued using GAPP and correctly journalized, summarized, and;posted. These actions are transaction objectives for;completeness;accurancy;cutoff;occurance;10. Section 18 liability is relatively narrow in;scope because it relates only to a false or misleading statement in documents;?filed? with the;AICPA;SEC;IRS;FASB;11. Which of the following functions is NOT part of the production cycle?;acquisition of raw materials;maintaining;the correctness of inventory balances;processing;goods in production;determining;and recording manufacturing costs;12. The specific audit objective for the audit of;investments, investment balances are;properly identified and classified in the financial statements, relates;to the;presentation or disclosure assertion.;rights;and obligations assertion.;completeness;assertion.;existence;or occurrence assertion.;13. The specific audit objective that the entity is liable for the payables;resulting from the recorded purchase transactions relates to;rights and obligations.;completeness.;presentation;and disclosure.;existence;or occurrence.;14. The specific audit objective for the audit of investments;investment revenues, and realized and unrealized gains and losses, are reported;at proper amounts, relates to the;rights;and obligations assertion.;completeness;assertion.;valuation or allocation assertion.;existence;or occurrence assertion.;15. The control of all funds during the count of;cash on hand is meant primarily to prevent;unauthorized;disbursements.;transfers by the client.;any;chance of double counting.;client;personnel from viewing the count procedure.;16. The standard bank confirmation, developed;jointly by the AICPA, the American Bankers Association, and the Bank;Administration Institute, requests information about all of the following EXCEPT;secondary endorsements.;deposit;balances.;loan;balances.;loan;interest rates.;17. Which of the following is NOT a tort?;negligence;gross;negligence;fraud;breach of contract;18. Which of the following accounts in a;merchandising company is affected by both the revenue cycle and another cycle?;accounts;receivable;sales;returns and allowances;inventory;sales;19. Whether the entity maintains effective controls;to provide reasonable assurance that private customer information obtained as a;result of e-commerce is protected from uses not related to the entity?s;business defines;risk;assessment.;information protection.;performance;measurement.;transaction;integrity.;20. Which one;of the following is NOT true of;the Principles in the AICPA?s Code of;Professional Conduct?;They;provide a framework for the Rules.;They;express the basic tenets of ethical conduct.;They;are expressions of ideals of professional conduct.;They are set forth as enforceable standards.;21. The two main sections of the AICPA?s Code of Professional Conduct are;Principles and Rules of Conduct.;Interpretations;of the Rules of Conduct and Ethics Rulings.;Principles;and Ethics Rulings.;Rules;of Conduct and Interpretations of the Rules of Conduct.;22. The Principle of Integrity in the AICPA?s Code of Professional Conduct would be;violated in cases of;subordination of judgment.;unintentional;distortion of facts.;inadvertent;error.;genuine;differences in opinion.;23. The audit objective, ?The accounts receivable;balance represents gross claims on customers and agrees with the sum of the;accounts receivable subsidiary ledger? is derived from the assertion of;existence;or occurrence.;valuation or allocation.;rights;and obligations.;completeness.;24. The specific audit objective for the audit of;investments, all investments are;included in the balance sheet investment accounts, relates to the;rights;and obligations assertion.;completeness assertion.;valuation;or allocation assertion.;existence;or occurrence assertion.;25. In performing an attest engagement, a CPA;performs all of the following EXCEPT;gathers;evidence to support the assertions.;relies on management statements.;objectively;assesses the communications of the individual making the assertions.;objectively;assesses the measurements of assertions.;26. The auditor?s strategy in performing test counts;during the inventory observation is to;concentrate tests on high dollar items and take;a representative sample of other items.;test;all high dollar items.;concentrate;tests in areas where employees seem to be disregarding the inventory;instructions.;randomly;select all test items.;27. Which one of the following is an investing activity?;acquiring;debt;issuing;bonds;capital;leases;selling land;28. Whether the system is protected against;unauthorized physical and logical access defines;system;availability.;system;verifiability.;system security.;system;integrity.;29. When an investigation of the discovery of facts;existing at the report date confirms the existence of the fact and the auditor;believes the information is important to those relying or likely to rely on the;financial statements, the auditor should immediately;resign;from the engagement.;take steps to prevent future reliance on the;audit report.;notify;the SEC or other regulatory agency.;notify;the audit committee.;30. The auditor?s special report on financial;statements prepared on an OCBOA should contain all of the following EXCEPT;an;introductory paragraph.;a;scope paragraph.;an exclusion paragraph.;an;explanatory paragraph.;31. Which of the following is NOT among the characteristics of the;procedures performed in completing the;audit?;They are optional since they have only an;indirect impact on the opinion to be expressed.;They;are performed after the balance sheet date.;They;involve many subjective judgments by the auditor.;They;are usually performed by audit managers or other senior members of the audit;team who have extensive audit experience with the client.;32. Which of the following is NOT among the specific auditing;procedures the auditor performs to obtain additional audit evidence?;reading;minutes of meetings;making;subsequent events review;reviewing evidence concerning litigation;claims, and assessments;obtaining;client representation letter;33. Gross negligence can best be defined as;criminal;fraud.;misrepresentation.;failure;to exercise due care.;failure to exercise even slight care.;34. Whether the system processing is complete;accurate, timely, and authorized defines;system;security.;system integrity.;system;maintainability.;system;availability.;35. When statistical sampling methods are used by;the client in determining inventories, professional standards require that the;auditor ascertain the following EXCEPT;that the;sampling;plan has statistical validity.;appropriate tests of transactions have been;applied.;sampling;plan has been properly applied.;results;in terms of reliability are reasonable.;36. With a manufacturer, wholesaler, or retailer;however, inherent risk for inventory may be assessed at or near the maximum level;for all of the following reasons EXCEPT;inventories;are vulnerable to spoilage, obsolescence, and other factors such as general;economic conditions that may affect demand and salability, and thus the proper;valuation of the inventories.;the;wide diversity of inventory items may present special problems in determining;their quality and market value.;inventories;are often stored at multiple sites, adding to the difficulties associated with;maintaining physical controls over theft and damages, and properly accounting;for goods in transit between sites.;the volume of purchases, manufacturing, and;sales transactions that affects these accounts is generally high, decreasing;the opportunities for misstatements to occur.

 

Paper#38572 | Written in 18-Jul-2015

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