,Student name:
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1) Control risk is
A) the probability that a material misstatement could not be prevented or detected by
the entity's internal control policies and procedures.
B) the probability that a material misstatement could occur and not be detected by
auditors' procedures.
C) the risk that auditors will not be able to complete the audit on a timely basis.
D) the risk that auditors will not properly control the staff on the audit engagement.
2) The responsibilities principle under generally accepted auditing standards does not
include which of the following?
A) Competence and capabilities.
B) Independent attitude.
C) Due care.
D) Planning and supervision.
3) Which of the following types of auditors' reports does not require additional information
to support the opinion?
A) Unmodified opinion.
B) Adverse opinion.
C) Qualified opinion.
D) Disclaimer of opinion.
,4) Which of the following is an element of a system of quality control that should be
considered by a public accounting firm in establishing its quality control policies and
procedures?
A) Lending credibility to a client's financial statements.
B) Using statistical sampling techniques.
C) Acceptance and continuance of client relationships and specific engagements.
D) Membership in the Center for Public Company Audit Firms.
5) Which of the following presumptions does not relate to the reliability of audit evidence?
A) The more effective the client's internal control, the more assurance it provides about
the accounting data and financial statements.
B) The auditors' opinion, to be economically useful, is formed within reasonable time
and based on evidence obtained at a reasonable cost.
C) Evidence obtained from independent sources outside the entity is more reliable than
evidence secured solely within the entity.
D) The independent auditors' direct personal knowledge, obtained through observation
and inspection, is of higher quality than information obtained indirectly.
6) An important role of the Public Company Accounting Oversight Board is to oversee the
A) issuance of statements by the Financial Accounting Standards Board.
B) preparation and grading of the Uniform CPA Examination.
C) peer review of member firms of the Private Companies Practice Section.
D) regulation of firms that audit issuers.
7) Audit evidence is usually considered sufficient when
, A) it is reliable.
B) there is enough quantity to afford a reasonable basis for an opinion on financial
statements.
C) it has the qualities of being relevant, objective, and free from unknown bias.
D) it has been obtained through random selection methods.
8) Which of the following is not considered a type of audit evidence?
A) The entity's trial balance.
B) Auditors' calculations.
C) Physical observation.
D) Verbal statements made by client personnel.
9) An audit of the financial statements of Camden Corporation is being conducted by
external auditors. The external auditors are expected to:
A) certify the correctness of Camden's financial statements.
B) make a complete examination of Camden's records and verify all of Camden's
transactions.
C) give an opinion on the fair presentation of Camden's financial statements in
conformity with the applicable financial reporting framework (e.g., GAAP, IFRS).
D) give an opinion on the attractiveness of Camden for investment purposes and
critique the wisdom and legality of its business decisions.
10) Auditors try to achieve independence in appearance in order to:
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1) Control risk is
A) the probability that a material misstatement could not be prevented or detected by
the entity's internal control policies and procedures.
B) the probability that a material misstatement could occur and not be detected by
auditors' procedures.
C) the risk that auditors will not be able to complete the audit on a timely basis.
D) the risk that auditors will not properly control the staff on the audit engagement.
2) The responsibilities principle under generally accepted auditing standards does not
include which of the following?
A) Competence and capabilities.
B) Independent attitude.
C) Due care.
D) Planning and supervision.
3) Which of the following types of auditors' reports does not require additional information
to support the opinion?
A) Unmodified opinion.
B) Adverse opinion.
C) Qualified opinion.
D) Disclaimer of opinion.
,4) Which of the following is an element of a system of quality control that should be
considered by a public accounting firm in establishing its quality control policies and
procedures?
A) Lending credibility to a client's financial statements.
B) Using statistical sampling techniques.
C) Acceptance and continuance of client relationships and specific engagements.
D) Membership in the Center for Public Company Audit Firms.
5) Which of the following presumptions does not relate to the reliability of audit evidence?
A) The more effective the client's internal control, the more assurance it provides about
the accounting data and financial statements.
B) The auditors' opinion, to be economically useful, is formed within reasonable time
and based on evidence obtained at a reasonable cost.
C) Evidence obtained from independent sources outside the entity is more reliable than
evidence secured solely within the entity.
D) The independent auditors' direct personal knowledge, obtained through observation
and inspection, is of higher quality than information obtained indirectly.
6) An important role of the Public Company Accounting Oversight Board is to oversee the
A) issuance of statements by the Financial Accounting Standards Board.
B) preparation and grading of the Uniform CPA Examination.
C) peer review of member firms of the Private Companies Practice Section.
D) regulation of firms that audit issuers.
7) Audit evidence is usually considered sufficient when
, A) it is reliable.
B) there is enough quantity to afford a reasonable basis for an opinion on financial
statements.
C) it has the qualities of being relevant, objective, and free from unknown bias.
D) it has been obtained through random selection methods.
8) Which of the following is not considered a type of audit evidence?
A) The entity's trial balance.
B) Auditors' calculations.
C) Physical observation.
D) Verbal statements made by client personnel.
9) An audit of the financial statements of Camden Corporation is being conducted by
external auditors. The external auditors are expected to:
A) certify the correctness of Camden's financial statements.
B) make a complete examination of Camden's records and verify all of Camden's
transactions.
C) give an opinion on the fair presentation of Camden's financial statements in
conformity with the applicable financial reporting framework (e.g., GAAP, IFRS).
D) give an opinion on the attractiveness of Camden for investment purposes and
critique the wisdom and legality of its business decisions.
10) Auditors try to achieve independence in appearance in order to:
