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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


Paper#73926 | Written in 18-Jul-2015

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