LSUS MBA 701 EXAM 1 EXAM SCRIPT 2026
COMPREHENSIVE QUESTIONS AND FULL
SOLUTIONS GRADED A+
⩥ Your audit client is under intense pressure to meet an earnings target.
Which assertion related to classes of transactions are you most
concerned with for transactions within the purchasing process?
a. completeness
b. existence or occurrence
c. presentation
d. accuracy.
Answer: a. completeness
⩥ Assertions.
Answer: Representations, explicit or otherwise, with respect to the
recognition, measurement, presentation, and disclosure of information in
the financial statements, which are inherent in management, representing
that the financial statements are prepared in accordance with the
applicable financial reporting framework. Assertions are used by the
auditor to consider the different types of potential misstatements that
may occur when identifying, assessing, and responding to the risks of
material misstatement.
,⩥ Assurance services.
Answer: independent professional services that improve the quality of
information, or its context, for decision makers. Encompasses attest
services and financial statement audits.
Assurance services not qualify as auditing or attestation.
⩥ Attest services.
Answer: Services provided by a practitioner engaged to issue a report on
subject matter, or an assertion about subject matter, that is the
responsibility of another party. Encompasses financial statement audits.
Auditors can provide numerous types of attest services regarding almost
any subject matter.
⩥ Audit data analytics.
Answer: Using analysis, modeling, and visualization to discover and
analyze patterns, anomalies, and other information in data in the context
of the audit.
⩥ Audit evidence.
Answer: All the information used by the auditor in arriving at the
conclusions on which the audit opinion is based. Audit evidence includes
the information contained in the accounting records underlying the
financial statements, as well as other information.
, ⩥ Audit risk.
Answer: The risk that the auditor expresses an inappropriate audit
opinion when the financial statements are materially misstated.
is the risk that an auditor will issue an unqualified opinion on materially
misstated financial statements
⩥ Auditing.
Answer: A systematic process of objectively obtaining and evaluating
evidence regarding assertions about economic actions and events to
ascertain the degree of correspondence between those assertions and
established criteria and communicating the results to interested users.
⩥ Information asymmetry.
Answer: The concept that the manager generally has more information
about the true financial position and results of operations of the entity
than the absentee owner does.
the manager (insider) running the corporate operations has more
information than majority of the shareholders (absentee owner).
⩥ Information risk.
COMPREHENSIVE QUESTIONS AND FULL
SOLUTIONS GRADED A+
⩥ Your audit client is under intense pressure to meet an earnings target.
Which assertion related to classes of transactions are you most
concerned with for transactions within the purchasing process?
a. completeness
b. existence or occurrence
c. presentation
d. accuracy.
Answer: a. completeness
⩥ Assertions.
Answer: Representations, explicit or otherwise, with respect to the
recognition, measurement, presentation, and disclosure of information in
the financial statements, which are inherent in management, representing
that the financial statements are prepared in accordance with the
applicable financial reporting framework. Assertions are used by the
auditor to consider the different types of potential misstatements that
may occur when identifying, assessing, and responding to the risks of
material misstatement.
,⩥ Assurance services.
Answer: independent professional services that improve the quality of
information, or its context, for decision makers. Encompasses attest
services and financial statement audits.
Assurance services not qualify as auditing or attestation.
⩥ Attest services.
Answer: Services provided by a practitioner engaged to issue a report on
subject matter, or an assertion about subject matter, that is the
responsibility of another party. Encompasses financial statement audits.
Auditors can provide numerous types of attest services regarding almost
any subject matter.
⩥ Audit data analytics.
Answer: Using analysis, modeling, and visualization to discover and
analyze patterns, anomalies, and other information in data in the context
of the audit.
⩥ Audit evidence.
Answer: All the information used by the auditor in arriving at the
conclusions on which the audit opinion is based. Audit evidence includes
the information contained in the accounting records underlying the
financial statements, as well as other information.
, ⩥ Audit risk.
Answer: The risk that the auditor expresses an inappropriate audit
opinion when the financial statements are materially misstated.
is the risk that an auditor will issue an unqualified opinion on materially
misstated financial statements
⩥ Auditing.
Answer: A systematic process of objectively obtaining and evaluating
evidence regarding assertions about economic actions and events to
ascertain the degree of correspondence between those assertions and
established criteria and communicating the results to interested users.
⩥ Information asymmetry.
Answer: The concept that the manager generally has more information
about the true financial position and results of operations of the entity
than the absentee owner does.
the manager (insider) running the corporate operations has more
information than majority of the shareholders (absentee owner).
⩥ Information risk.
