Auditing Final Test Bank

Which of the following is the essential purpose of the audit function? A. Detection of fraud. B. Examination of individual transactions to certify their validity. C. Determination of whether the client's financial statement assertions are fairly stated. D. Assurance of the consistent application of correct accounting procedures ANSWERC. Determination of whether the client's financial statement assertions are fairly stated. Which of the following best describes the primary role and responsibility of the independent external auditor? A. Produce a company's annual financial statements and notes. B. Express an opinion on the fairness of a company's annual financial statements an footnotes. C. Provide business consulting advice to audit clients. D. Obtain an understanding of the client's internal control structure and give management report about control problems and deficiencies. ANSWERB. Express an opinion on the fairness of a company's annual financial statements and footnotes. Because of the risk of material misstatement, an audit of financial statements in accordance with generally accepted auditing standards should be planned and performed with an attitude of A. Objective judgment. B. Independent integrity. C. Professional skepticism. D. Impartial conservatism. ANSWERC. Professional skepticism Which of the following best describes assurance services? A. Independent professional services that report on the client's financial statements. B. Independent professional services that improve the quality of information for decision makers. C. Independent professional services that report on specific written management assertions. D. Independent professional services that improve the client's operations. ANSWERB. Independent professional services that improve the quality of information for decision makers.