1
BMGT422
Questions with Detailed Verified Answers (100% Correct
Answers) /Already Graded A+ Auditing
Ans: Process by which a competent, independent person accumulates and
evaluates evidence about measurable information related to a specific
economic entity for the purpose of determining and reporting on the degree of
correspondence between information and established criteria
Auditing Functions
Ans: 1. Obtain and evaluate evidence supporting the F/S
2. Determine fairness of F/S in conformity w/ est. criteria
3. Prepare audit report
Assurance Process
Accounting Functions
Ans: 1. Analyze economic events and transactions
2. Collecting information
3. Measure and record data
4. Classify and summarize data
Creation Process
unqualified (clean) audit report
Ans: Standard Report: All basic F/S are a fair representation and are in
accordance with GAAP in all material respects and GAAS was applied
There can be slight modifications to standard report (emphasis on a matter or
going concern)
adverse audit report
Approved By:
vPretest - Stuvia US
,2
Ans: Material and pervasive departures from GAAP or not a fair
representation of financial position
Qualified (except for) audit report
Ans: Fair representation except for:
Material but not pervasive departures from GAAP
Material but not pervasive material scope limitations
Disclaimer audit report
Ans: Unable to form an opinion b/c:
The auditor is not independent
A material and pervasive scope limitation
A significant uncertainty
AICPA
Ans: Who administers the CPA Exam?
Financial Accounting Process
Ans: Transactions occur and source documents created --> journal entries in
the journal --> post entries to the ledger(s) --> unadjusted TB --> adjusting
entries (including auditor proposed) --> adjusted TB --> f/s --> closing entries -
-> post entries to ledgers --> reversing entries
Sales, cash receipts, general
Ans: Journals included in sales and collection cycle
Acquisitions, cash disbursements, general
Ans: Journals included in acquisition and payment cycle
Payroll and general
Ans: Journals included in Payroll and personnel cycle
Approved By:
vPretest - Stuvia US
,3
Acquisition, sales, general
Ans: Journals included in inventory and warehousing cycle
Acquisition, cash disbursements, general
Ans: Journals included in capital acquisition and repayment cycle
Existence/Occurrence
Completeness
Valuation or Allocation
Rights and Obligations
Ans: PCAOB Management Assertions
Occurrence
Completeness
Accuracy
Classification
Cutoff
Ans: Management Assertions - Transactions and Events
Existence
Completeness
Valuation and Allocation
Rights and Obligations
Ans: Management Assertions - Balances
Occurrence
Completeness
Accuracy
Posting and Summarization
Classification
Approved By:
vPretest - Stuvia US
, 4
Cutoff
Ans: Transaction Related Audit Objectives
Existence
Completeness
Realizable Value
Accuracy
Detail Tie-in
Classification
Cutoff
Rights and Obligations
Ans: Balance Related Audit Objectives
Occurrence (Management Assertion)
Ans: Transactions and events that have been recorded have occurred and
pertain to the entity.
Existence (Management Assertion)
Ans: Assets, liabilities, and equity interests exist.
Completeness (Transaction Management Assertion)
Ans: All transactions and events that should have been recorded have been
recorded.
Completeness (Balance Management Assertion)
Ans: All assets, liabilities, and equity interests that should have been recorded
have been recorded.
Accuracy (Management Assertion)
Ans: Amounts and other data relating to recorded transactions and events
have been recorded appropriately
Approved By:
vPretest - Stuvia US
BMGT422
Questions with Detailed Verified Answers (100% Correct
Answers) /Already Graded A+ Auditing
Ans: Process by which a competent, independent person accumulates and
evaluates evidence about measurable information related to a specific
economic entity for the purpose of determining and reporting on the degree of
correspondence between information and established criteria
Auditing Functions
Ans: 1. Obtain and evaluate evidence supporting the F/S
2. Determine fairness of F/S in conformity w/ est. criteria
3. Prepare audit report
Assurance Process
Accounting Functions
Ans: 1. Analyze economic events and transactions
2. Collecting information
3. Measure and record data
4. Classify and summarize data
Creation Process
unqualified (clean) audit report
Ans: Standard Report: All basic F/S are a fair representation and are in
accordance with GAAP in all material respects and GAAS was applied
There can be slight modifications to standard report (emphasis on a matter or
going concern)
adverse audit report
Approved By:
vPretest - Stuvia US
,2
Ans: Material and pervasive departures from GAAP or not a fair
representation of financial position
Qualified (except for) audit report
Ans: Fair representation except for:
Material but not pervasive departures from GAAP
Material but not pervasive material scope limitations
Disclaimer audit report
Ans: Unable to form an opinion b/c:
The auditor is not independent
A material and pervasive scope limitation
A significant uncertainty
AICPA
Ans: Who administers the CPA Exam?
Financial Accounting Process
Ans: Transactions occur and source documents created --> journal entries in
the journal --> post entries to the ledger(s) --> unadjusted TB --> adjusting
entries (including auditor proposed) --> adjusted TB --> f/s --> closing entries -
-> post entries to ledgers --> reversing entries
Sales, cash receipts, general
Ans: Journals included in sales and collection cycle
Acquisitions, cash disbursements, general
Ans: Journals included in acquisition and payment cycle
Payroll and general
Ans: Journals included in Payroll and personnel cycle
Approved By:
vPretest - Stuvia US
,3
Acquisition, sales, general
Ans: Journals included in inventory and warehousing cycle
Acquisition, cash disbursements, general
Ans: Journals included in capital acquisition and repayment cycle
Existence/Occurrence
Completeness
Valuation or Allocation
Rights and Obligations
Ans: PCAOB Management Assertions
Occurrence
Completeness
Accuracy
Classification
Cutoff
Ans: Management Assertions - Transactions and Events
Existence
Completeness
Valuation and Allocation
Rights and Obligations
Ans: Management Assertions - Balances
Occurrence
Completeness
Accuracy
Posting and Summarization
Classification
Approved By:
vPretest - Stuvia US
, 4
Cutoff
Ans: Transaction Related Audit Objectives
Existence
Completeness
Realizable Value
Accuracy
Detail Tie-in
Classification
Cutoff
Rights and Obligations
Ans: Balance Related Audit Objectives
Occurrence (Management Assertion)
Ans: Transactions and events that have been recorded have occurred and
pertain to the entity.
Existence (Management Assertion)
Ans: Assets, liabilities, and equity interests exist.
Completeness (Transaction Management Assertion)
Ans: All transactions and events that should have been recorded have been
recorded.
Completeness (Balance Management Assertion)
Ans: All assets, liabilities, and equity interests that should have been recorded
have been recorded.
Accuracy (Management Assertion)
Ans: Amounts and other data relating to recorded transactions and events
have been recorded appropriately
Approved By:
vPretest - Stuvia US
