ACC 562 Final Exam – Strayer New
ACC 562 Week 11 Final Exam Solved
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1.Developing
an understanding of the client's business and industry is essential to
proficiency as discussed in the general standards of GAAS. (Points: 4)
True
False
2. Ratio
analysis only involves a year-to-year comparison of account balances. (Points:
4)
True
False
3.
Control is considered to be part of corporate governance. (Points: 4)
True
False
4. When
control risk is assessed at a maximum level, the auditor assumes that the
internal controls are reliable in preventing or detecting material
misstatements. (Points: 4)
True
False
5.
Accounting subsystems are accounting cycles composed of one or more accounting applications.
(Points: 4)
True
False
6.
Presentation and disclosure assertions imply that all transactions and balances
are properly presented, disclosures represent what actually happened, and the
footnote disclosures are appropriate and adequate. (Points: 4)
True
False
7.
Vouching recorded transactions involves taking a sample from the journal and
tracing them back to the source documents to ensure they occurred. (Points: 4)
True
False
8. Audit
documentation serves as support for the financial statements. (Points: 4)
True
False
9. In
analysis of the results of audit sampling, an auditor may determine that the
sample size must be increased. (Points: 4)
True
False
10. The
revenue cycle considered by auditors includes the sales process but not
collections. (Points: 4)
True
False
11.
Inventory is complex and typically considered a high-risk area in audits of
service firms. (Points: 4)
True
False
12. An
auditor can utilize a cross-sectional analysis for a client operating in
multiple locations to identify areas of further inventory testing. (Points: 4)
True
False
13.
Legal expenses are reviewed by auditors for possible litigation and related FAS
5 treatment. (Points: 4)
True
False
14. An
imprest payroll account will never reach a zero balance. (Points: 4)
True
False
15. A
turnaround document is an effective completeness control because they list
essential information for further processing of the collection on account.
(Points: 4)
True
False
16.
Auditors will perform an analysis of leases using SFAS 13 criteria and other
EITF statements to substantiate the accounting treatment. (Points: 4)
True
False
17.
Contingencies are considered by the auditor in relation to the SFAS No. 5
criteria to determine whether material contingencies exist with the client and,
if so, that they are properly accrued or disclosed. (Points: 4)
True
False
18. An
example of a Type II Subsequent Event includes the settlement two months after
year-end of a liability for an amount well in excess of the amount that was
accrued at year-end. (Points: 4)
True
False
19. A
report on agreed-upon procedures issued by accountants provides the lowest form
of attestation assurance. (Points: 4)
True
False
20. The
need for assurance services arises for all of the following reasons EXCEPT:
(Points: 4)
potential bias in providing
information.
closeness between a user and the
organization.
complexity of the processing systems.
remoteness between a user and the
organization.
21.
Which one of the following is not part of the attest process? (Points: 4)
evaluating evidence against objective
criteria
gathering evidence about assertions
proving the accuracy of the books and
records
communicating the conclusions reached
22.
Users can reasonably expect audited financial statements to be (Points: 4)
complete and contain all important
financial disclosures, be free from material misstatements and be presented
fairly.
complete and contain all-important financial
disclosures, be free from material misstatements and be presented fairly
according to GAAP.
complete, be accurate and be presented
fairly according to GAAP.
complete and contain all-important
financial disclosures, be free from all misstatements and be presented fairly
according to the substance of GAAP.
23.
Which one of the following is not a provider of assurance services? (Points: 4)
CPAs
internal auditors
governmental auditors
AICPA
24. The
primary governing board that performs quality reviews on registered CPA firms
that audit public companies is the (Points: 4)
PCAOB
GAO
AICPA
FASB
25.
Management of an organization has the responsibility for all of the following
except: (Points: 4)
accounting principles used in financial
reporting
engagement of a qualified auditor
internal control over financial
reporting
financial statements and disclosures
26. The
financial statement auditor must understand the client's internal control as a
component of the fieldwork standards. The one of the reason for this
understanding is so that the auditor may (Points: 4)
provide individual comments on internal
control non-compliance.
become comfortable that the client will
pay its audit bills.
assess materiality.
assess the risk of possible
misstatements in the financial statements.
27. For
an auditor to be independent, he or she must be independent in (Points: 4)
fact.
appearance.
fact and appearance.
either fact or appearance.
28. An
auditor is concerned with materiality for which of the following reasons?
(Points: 4)
to assess internal control
to comply with the quality assurance
standards of GAAS
to determine the effects of
misstatements on the users of financial information
to cut down on audit procedures and
testing
29. A
proper system of corporate governance is one that demands (Points: 4)
decision making by auditors in place of
management.
internal audit representation on the
board of directors.
audit planning to obtain competent and
sufficient audit evidence.
accountability back through the system
to the shareholders.
30. In
determining the types of activities, engagements and interactions an auditor
should have with a client, the CPA and the audit firm must (select the best
answer) (Points: 4)
follow the rules exactly as they are
written.
assess all of their relationships with
every client to ensure that independence is intact.
focus on client satisfaction above all
other considerations
realize that ethics are only guidelines
and a matter of personal judgment.
31. The
AICPA Principles of Professional Conduct include (Points: 4)
due professional care and supervision.
scope and nature of services and
adequate training.
integrity and independence
public interest, integrity and
objectivity.
32. A
public client is required to report material changes in internal control
(Points: 4)
monthly.
quarterly.
annually.
never.
33.
Programs written to accomplish specific processing tasks, such as computing
payroll, are (Points: 4)
application programs.
operating system programs.
Java scripts.
access control programs.
34. The
combination of which functions in an information technology environment are not
necessarily a control weakness? (Points: 4)
user and programming functions
database administrator and data inp
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