BYU ACC 406 AUDIT FINAL EXAM QUESTIONS
WITH CORRECT ANSWERS 2025/2026
Phases of an Audit - CORRECT ANSWER -Client Acceptance/Continuance
Preliminary Audit Procedures
Plan the Audit
Consider and Audit Internal Controls
Audit Business Processes and Related Accounts
Complete the Audit
Evaluate Results and Issue the Audit Report
Steps in Planning the Audiit - CORRECT ANSWER -Assess Business Risks
Establish Materiality
Consider Multi-Locations
Assess the need for Specialists
Identify Related Parties
Consider Value-Added Services
The amount by which a set of financial statements could be misstated without affecting the
judgement of a reasonable person. - CORRECT ANSWER -Materiality
The amount of the overall materiality that is used to establish a scope for the audit procedures
for the individual account balance or disclosures. - CORRECT ANSWER -Tolerable Misstatement
Audit Risk Model - CORRECT ANSWER -AR = RMM x DR
, The risk that the auditor expresses an inappropriate audit opinion when the financial
statements are materially misstated. - CORRECT ANSWER -Audit Risk
The pre-audit risk that the entity's financial statements contain a material misstatement
whether caused by error or fraud. - CORRECT ANSWER -Risk of Material Misstatement
the susceptibility of a set of accounts or transactions to significant control problems in the
absence of internal control - CORRECT ANSWER -Inherent Risk
The risk that a material misstatement that could occur in an account will not be prevented or
detected and corrected on a timely basis by internal control. - CORRECT ANSWER -Control Risk
The risk that the procedures performed by the auditor to reduce audit risk to an acceptably low
level will not detect a misstatement that exists and that could be material, either individually or
when aggregated with others. - CORRECT ANSWER -Detection Risk
Management Assertions about classes of transactions and events - CORRECT ANSWER -
Occurrence
Completeness
Authorization
Accuracy
Cutoff
Classification
Presentation
transactions and events that have been recorded have occurred and pertain to the entity -
CORRECT ANSWER -Occurrence
WITH CORRECT ANSWERS 2025/2026
Phases of an Audit - CORRECT ANSWER -Client Acceptance/Continuance
Preliminary Audit Procedures
Plan the Audit
Consider and Audit Internal Controls
Audit Business Processes and Related Accounts
Complete the Audit
Evaluate Results and Issue the Audit Report
Steps in Planning the Audiit - CORRECT ANSWER -Assess Business Risks
Establish Materiality
Consider Multi-Locations
Assess the need for Specialists
Identify Related Parties
Consider Value-Added Services
The amount by which a set of financial statements could be misstated without affecting the
judgement of a reasonable person. - CORRECT ANSWER -Materiality
The amount of the overall materiality that is used to establish a scope for the audit procedures
for the individual account balance or disclosures. - CORRECT ANSWER -Tolerable Misstatement
Audit Risk Model - CORRECT ANSWER -AR = RMM x DR
, The risk that the auditor expresses an inappropriate audit opinion when the financial
statements are materially misstated. - CORRECT ANSWER -Audit Risk
The pre-audit risk that the entity's financial statements contain a material misstatement
whether caused by error or fraud. - CORRECT ANSWER -Risk of Material Misstatement
the susceptibility of a set of accounts or transactions to significant control problems in the
absence of internal control - CORRECT ANSWER -Inherent Risk
The risk that a material misstatement that could occur in an account will not be prevented or
detected and corrected on a timely basis by internal control. - CORRECT ANSWER -Control Risk
The risk that the procedures performed by the auditor to reduce audit risk to an acceptably low
level will not detect a misstatement that exists and that could be material, either individually or
when aggregated with others. - CORRECT ANSWER -Detection Risk
Management Assertions about classes of transactions and events - CORRECT ANSWER -
Occurrence
Completeness
Authorization
Accuracy
Cutoff
Classification
Presentation
transactions and events that have been recorded have occurred and pertain to the entity -
CORRECT ANSWER -Occurrence
