Auditing Final Exam Newest 2026/2027 Questions
and Correct Detailed Answers Already Graded A+
Which of the following is not a broad category of threat to auditor independence?
Familiarity.
Positive work relationship.
Financial self interest.
Undue Influence. - CORRECT ANSWER-Positive work relationship.
An audit report on a public company is least likely to include a paragraph titled:
Auditor responsibility
Basis for Opinion.
Critical Audit Matters.
Opinion on the Financial Statements. - CORRECT ANSWER-Auditor
responsibility
Auditors must communicate internal control "significant deficiencies" to:
The audit committee.
The shareholders.
,The SEC.
The Federal Trade Commission. - CORRECT ANSWER-The audit committee.
In auditing the balance sheet, most revenue and expense accounts are also
audited. Which accounts are most likely to be audited when auditing Accounts
Receivable?
Sales and Cost of Goods Sold.
Interest and Bad Debt Expense.
Sales and Bad Debt Expense.
Interest and Cost of Goods Sold. - CORRECT ANSWER-Sales and Bad Debt
Expense.
Which of the following auditing procedures is ordinarily performed last?
Reading of the minutes of the directors' meetings.
Confirming accounts payable.
Obtaining a management representation letter.
Testing of the purchasing function. - CORRECT ANSWER-Obtaining a
management representation letter.
,Which of the following procedures most likely would assist an auditor in
identifying conditions and events that may indicate substantial doubt about an
entity's ability to continue as a going concern?
Performing cutoff tests of sales transactions with customers with long-standing
receivable balances.
Evaluating the entity's procedures for identifying and recording related party
transactions.
Inspecting title documents to verify whether any real property is pledged as
collateral.
Inquiring of the entity's legal counsel about litigation, claims, and assessments. -
CORRECT ANSWER-Inquiring of the entity's legal counsel about litigation,
claims, and assessments.
When an auditor finds a debit to accounts payable, which of the following
accounts is most likely to be credited?
Accounts Receivable.
Accrued liabilities.
Cash.
Cost of goods sold. - CORRECT ANSWER-Cash.
, The auditor will most likely perform extensive tests for possible understatement
of:
Multiple Choice
Revenues.
Assets.
Liabilities. - CORRECT ANSWER-Liabilities.
Competence as a certified public accountant includes all of the following except:
Having the technical qualifications to perform an engagement.
Possessing the ability to supervise and to evaluate the quality of staff work.
Guaranteeing the accuracy of the work performed.
Consulting others if additional technical information is needed. - CORRECT
ANSWER-Guaranteeing the accuracy of the work performed.
Which of the following would most likely be an appropriate addressee for an
audit report?
The shareholders of the corporation whose financial statements were examined.
A third party who requested that a copy of the audit report be sent to her.
The president of the corporation whose financial statements were examined.
and Correct Detailed Answers Already Graded A+
Which of the following is not a broad category of threat to auditor independence?
Familiarity.
Positive work relationship.
Financial self interest.
Undue Influence. - CORRECT ANSWER-Positive work relationship.
An audit report on a public company is least likely to include a paragraph titled:
Auditor responsibility
Basis for Opinion.
Critical Audit Matters.
Opinion on the Financial Statements. - CORRECT ANSWER-Auditor
responsibility
Auditors must communicate internal control "significant deficiencies" to:
The audit committee.
The shareholders.
,The SEC.
The Federal Trade Commission. - CORRECT ANSWER-The audit committee.
In auditing the balance sheet, most revenue and expense accounts are also
audited. Which accounts are most likely to be audited when auditing Accounts
Receivable?
Sales and Cost of Goods Sold.
Interest and Bad Debt Expense.
Sales and Bad Debt Expense.
Interest and Cost of Goods Sold. - CORRECT ANSWER-Sales and Bad Debt
Expense.
Which of the following auditing procedures is ordinarily performed last?
Reading of the minutes of the directors' meetings.
Confirming accounts payable.
Obtaining a management representation letter.
Testing of the purchasing function. - CORRECT ANSWER-Obtaining a
management representation letter.
,Which of the following procedures most likely would assist an auditor in
identifying conditions and events that may indicate substantial doubt about an
entity's ability to continue as a going concern?
Performing cutoff tests of sales transactions with customers with long-standing
receivable balances.
Evaluating the entity's procedures for identifying and recording related party
transactions.
Inspecting title documents to verify whether any real property is pledged as
collateral.
Inquiring of the entity's legal counsel about litigation, claims, and assessments. -
CORRECT ANSWER-Inquiring of the entity's legal counsel about litigation,
claims, and assessments.
When an auditor finds a debit to accounts payable, which of the following
accounts is most likely to be credited?
Accounts Receivable.
Accrued liabilities.
Cash.
Cost of goods sold. - CORRECT ANSWER-Cash.
, The auditor will most likely perform extensive tests for possible understatement
of:
Multiple Choice
Revenues.
Assets.
Liabilities. - CORRECT ANSWER-Liabilities.
Competence as a certified public accountant includes all of the following except:
Having the technical qualifications to perform an engagement.
Possessing the ability to supervise and to evaluate the quality of staff work.
Guaranteeing the accuracy of the work performed.
Consulting others if additional technical information is needed. - CORRECT
ANSWER-Guaranteeing the accuracy of the work performed.
Which of the following would most likely be an appropriate addressee for an
audit report?
The shareholders of the corporation whose financial statements were examined.
A third party who requested that a copy of the audit report be sent to her.
The president of the corporation whose financial statements were examined.
