Acct 241 part 1

1. The underlying conditions that create demand by users for reliable information include a. transactions that are numerous and complex b. users separated from accounting records by distance and time c. financial decisions that are important to investors and users d. decisions are time-sensitive e. all of the above e. all of the above 2. Information risk refers to the risk that a. the client's financial statements may be materially false and misleading b. the auditor may express an unqualified opinion on financial statements that are material misstated c. the client may not be able to remain in business d. errors and frauds would not be detected by the auditor's procedures a the client's financial statements may be materially false and misleading 3. It is always a good idea for auditors to begin an audit with the professional skepticism characterized by the assumption that: a. a potential conflict of interest always exists between the auditor and the management of the enterprise under audit b. in audits of financial statements, the auditor acts exclusively in the capacity of an auditor c. the professional status of the independent auditor imposes commensurate professional obligations d. financial statements and financial data are verifable a a potential conflict of interest always exists between the auditor and the management of the enterprise under audit 4. According to the AICPA, the objective of an audit of financial statements is: a. an expression of opinion on the fairness with which they present financial position results of operations, and cash flows in conformity with generally accepted accounting principles b. an expression of opinion on the fairness with which they present financial position, results of operations, and cash flows in conformity with accounting standards promulgated by the financial accounting standards board c. an expression of opinion on the fairness with which they present financial position, result of operations, and cash flows in conformity with accounting standards