LSU ACCT 3222 WILEY TEST 1 2026 ACTUAL
EXAM QANDA 164 QUESTIONS WITH
COMPLETE SOLUTIONS EXPERT REVIEW
GRADED A+
⩥ 1. mgt's assertions about transactions and events and related
disclosures (IS focus).
Answer: CPACOP (relate to transactions)
Completeness - didn't forget to record anything (transactions), related
disclosures included
Proper period cutoff - recorded in correct acct period
Accuracy - it's accurate, recorded appropriately
Classification - recorded in proper accounts
*Occurrence - transactions/everything in IS has occurred, no fictitious
transactions
Presentation - grouped appropriately & clearly described, disclosures
relevant & understandable under GAAP
⩥ 2. 1. mgt's assertions about account balances and related disclosures
(BS focus).
Answer: CAREPC (relate to A, L, SE)
Completeness - didn't forget to record anything (A, L, SE), related
disclosures included
,Accuracy, valuation, & allocation - A, L, SE all valued correctly,
adjustments recorded
Rights and obligations - entity controls rights to assets, liabilities are
obligations of entity
Existence - no fictitious items, all A, L, SE interests exist
Presentation - grouped appropriately & clearly described, disclosures
relevant & understandable under GAAP
Classification - recorded in proper accounts
⩥ risk assessment (planning), retail example.
Answer: 1. identify significant accounts/transactions
- inventory (BS)
2. identify relevant assertions related to those significant accounts
- existence, accuracy, valuation & allocation
3. select audit procedures to gather evidence related to assertions
⩥ forms of information used as audit evidence.
Answer: - oral - talk to the client (inquiry), document answers, not very
strong/reliable (can be lying/wrong)
- paper documents - important business transactions (sales/lease
contracts)
- visual - observe things happening (application of IC, physical
inventory)
- electronic - client's IT system
, ⩥ characteristics of audit evidence.
Answer: 1. sufficient = quantity
- do we have enough evidence? up to professional judgement
- AR model = RMM↑, DR↓ = gather more evidence
2. appropriate = quality
- source of evidence (1&2 more reliable, 3 less reliable)
1. reliability of audit evidence (where does evidence come from?)
1. external - outside of client, 3rd party (bank, customers, vendors),
"written confirmation"
2. auditor observation & knowledge - ex. physical inventory
observation
3. internal - more effective if client has strong ICs, documented
evidence better than verbal, original docs better than copies
a. accuracy & completeness - effective ICs
b. authenticity - original docs better
c. susceptibility to mgt bias - estimates (mgt's motivation?)
2. relevance of audit evidence
*1. logical connection with assertion - evidence supports assertions,
audit test supports assertion
2. period of time - evidence relevant to time period audited
⩥ to obtain reasonable assurance about audit evidence, conclusion.
EXAM QANDA 164 QUESTIONS WITH
COMPLETE SOLUTIONS EXPERT REVIEW
GRADED A+
⩥ 1. mgt's assertions about transactions and events and related
disclosures (IS focus).
Answer: CPACOP (relate to transactions)
Completeness - didn't forget to record anything (transactions), related
disclosures included
Proper period cutoff - recorded in correct acct period
Accuracy - it's accurate, recorded appropriately
Classification - recorded in proper accounts
*Occurrence - transactions/everything in IS has occurred, no fictitious
transactions
Presentation - grouped appropriately & clearly described, disclosures
relevant & understandable under GAAP
⩥ 2. 1. mgt's assertions about account balances and related disclosures
(BS focus).
Answer: CAREPC (relate to A, L, SE)
Completeness - didn't forget to record anything (A, L, SE), related
disclosures included
,Accuracy, valuation, & allocation - A, L, SE all valued correctly,
adjustments recorded
Rights and obligations - entity controls rights to assets, liabilities are
obligations of entity
Existence - no fictitious items, all A, L, SE interests exist
Presentation - grouped appropriately & clearly described, disclosures
relevant & understandable under GAAP
Classification - recorded in proper accounts
⩥ risk assessment (planning), retail example.
Answer: 1. identify significant accounts/transactions
- inventory (BS)
2. identify relevant assertions related to those significant accounts
- existence, accuracy, valuation & allocation
3. select audit procedures to gather evidence related to assertions
⩥ forms of information used as audit evidence.
Answer: - oral - talk to the client (inquiry), document answers, not very
strong/reliable (can be lying/wrong)
- paper documents - important business transactions (sales/lease
contracts)
- visual - observe things happening (application of IC, physical
inventory)
- electronic - client's IT system
, ⩥ characteristics of audit evidence.
Answer: 1. sufficient = quantity
- do we have enough evidence? up to professional judgement
- AR model = RMM↑, DR↓ = gather more evidence
2. appropriate = quality
- source of evidence (1&2 more reliable, 3 less reliable)
1. reliability of audit evidence (where does evidence come from?)
1. external - outside of client, 3rd party (bank, customers, vendors),
"written confirmation"
2. auditor observation & knowledge - ex. physical inventory
observation
3. internal - more effective if client has strong ICs, documented
evidence better than verbal, original docs better than copies
a. accuracy & completeness - effective ICs
b. authenticity - original docs better
c. susceptibility to mgt bias - estimates (mgt's motivation?)
2. relevance of audit evidence
*1. logical connection with assertion - evidence supports assertions,
audit test supports assertion
2. period of time - evidence relevant to time period audited
⩥ to obtain reasonable assurance about audit evidence, conclusion.
