CPA Exam A2, Audit and Attestation
- CPA Exam A1 Complete And Verified
Study material A Guarantee Pass Exam
Guide ||A+ Confirmed Surebet!!!
Which of the following is required documentation in an audit in accordance with
generally accepted auditing standards? - ANSWER-An audit plan setting forth in detail
the procedures necessary to accomplish the engagement's objectives
After obtaining an understanding of the entity and its environment and assessing the
risk of material misstatement, an auditor decided to perform tests of controls. The
auditor most likely decided that: - ANSWER-it would be efficient to perform tests of
controls that would result in a reduction in planned substantive tests.
Audit programs should be designed so that: - ANSWER-the audit evidence gathered
supports the auditor's conclusions.
In designing a written audit plan, an auditor should establish specific audit objectives
that relate primarily to the: - ANSWER-Financial Statement assertions
The permanent file of an auditor's working papers generally would not include: -
ANSWER-a working trial balance.
In addition to descriptions of the nature, timing, and extent of planned risk assessment
procedures and planned further audit procedures, which of the following additional
pieces of information should be documented in the audit plan? - ANSWER-Other audit
procedures to be performed to comply with generally accepted auditing standards
A written audit plan is required to be prepared by an auditor for: - ANSWER-Every audit
An auditor who performed analytical procedures that compared current-year financial
information to the comparable prior period noted a significant increase in net income.
Given this result, which of the following expectations of recorded amounts would be
unreasonable? - ANSWER-A decrease in retained earnings
An auditor should design the written audit plan so that: - ANSWER-the audit procedures
selected will achieve specific audit objectives.
,Which of the following factors most likely would influence an auditor's determination of
the auditability of an entity's financial statements? - ANSWER-The adequacy of the
accounting records
An accountant was asked by a potential client to perform a compilation of its financial
statements. The accountant is not familiar with the industry in which the client operates.
In this situation, which of the following actions is the accountant most likely to take? -
ANSWER-Accept the engagement and obtain an adequate level of knowledge about
the industry
To compile financial statements, the accountant should possess a general
understanding of the nature of the entity's operations. This most likely will include which
of the following? - ANSWER-Stated qualifications of the entity's accounting personnel
When planning a review of an audit client's interim financial statements, which of the
following procedures should the accountant perform to update the accountant's
knowledge about the entity's business and its internal control? - ANSWER-Consider the
results of audit procedures performed with respect to the current year's financial
statements
Which of the following procedures would an auditor least likely perform in planning a
financial statement audit? - ANSWER-Selecting a sample of vendor invoices for
comparison to receiving reports
In connection with a compilation or review of financial statements, how might an
accountant obtain an understanding of an entity's business, including the stated
qualifications of accounting personnel?
1. Experience with the entity
2. Inquiry of the entity's personnel - ANSWER-Both 1 and 2
If an accountant has no previous experience in the prospective client's industry, he or
she may obtain the required level of knowledge through which of the following?
AICPA guides
Industry publications
Financial statement of other entities in the industry
,All of the ANSWER choices are correct. - ANSWER-All of the above
Which of the following procedures would be generally performed when evaluating the
accounts receivable balance in an engagement to review financial statements in
accordance with the Statements on Standards for Accounting and Review Services
(SSARS)? - ANSWER-Perform a reasonableness test of the balance by computing
days' sales in receivables
Which of the following procedures should an accountant perform during an engagement
to compile prospective financial statements? - ANSWER-Make inquiries about the
accounting principles used in the preparation of the prospective financial statements
When engaged to compile the financial statements of a nonissuer, an accountant is
required to possess a level of knowledge of the entity's accounting principles and
practices. This requirement most likely will include obtaining a general understanding of
the: - ANSWER-stated qualifications of the entity's accounting personnel.
An auditor obtains knowledge about a new client's business and its industry to: -
ANSWER-understand the events and transactions that may have an effect on the
client's financial statements.
The procedure of an accountant obtaining a general level of knowledge of the
accounting principles and practices of the entity's industry is: - ANSWER-Required for a
compilation and a review
A practitioner reporting on pro forma financial information does not possess an
understanding of the client's business and the industry in which the client operates. The
practitioner should take which of the following actions? - ANSWER-Review industry
trade journals
When compiling the financial statements of a nonissuer, an accountant should: -
ANSWER-understand the accounting principles and practices of the entity's industry.
If an accountant has no previous experience in the prospective client's industry, he or
she may obtain the required level of knowledge through all of the following except: -
ANSWER-textbooks and periodicals.
individuals knowledgeable about the industry.
conferences, classes, and workshops.
, The accountant can obtain the required level of knowledge through any of the items
listed.
ANSWER: The accountant can obtain the required level of knowledge through any of
the items listed
To compile financial statements of a nonissuer in accordance with the Statements on
Standards for Accounting and Review Services, an accountant should: - ANSWER-
Obtain a general understanding of the clients business transactions
When reviewing the financial statements of a nonissuer in accordance with the
Statements on Standards for Accounting and Review Services (SSARS), an
accountant's procedures should include: - ANSWER-inquiring into actions taken at
meetings of the board of directors.
In obtaining an understanding of a manufacturing entity's internal control concerning
inventory balances, an auditor most likely would: - ANSWER-review the entity's
descriptions of inventory policies and procedures.
Which of the following procedures is usually the first step in reviewing the financial
statements of a nonissuer? - ANSWER-Obtain a general understanding of the entity's
organization, its operating characteristics, and its products or services.
An auditor reviews a client's accounting policies and procedures when considering
which of the following planning matters? - ANSWER-Understanding the client's
operations and business
In performing interviews and examining documents related to preliminary work in a
financial statement audit of a nonissuer, an auditor identifies a business risk associated
with plans for a new product line. What should the auditor do as a result? - ANSWER-
Analyze the newly identified risk in conjunction with other known business risks and
consider whether there is an immediate consequence for the risk of material
misstatement at various levels of the audit.
Knowledge of the client's "industry, regulatory, and other factors" includes an
understanding of all of the following, except: - ANSWER-the entity's accounting policies
and procedures.
Which of the following is required of an accountant in reviewing a company's financial
statements under the Statements on Standards for Accounting and Review Services
(SSARS)? - ANSWER-Obtain knowledge of the clients industry
- CPA Exam A1 Complete And Verified
Study material A Guarantee Pass Exam
Guide ||A+ Confirmed Surebet!!!
Which of the following is required documentation in an audit in accordance with
generally accepted auditing standards? - ANSWER-An audit plan setting forth in detail
the procedures necessary to accomplish the engagement's objectives
After obtaining an understanding of the entity and its environment and assessing the
risk of material misstatement, an auditor decided to perform tests of controls. The
auditor most likely decided that: - ANSWER-it would be efficient to perform tests of
controls that would result in a reduction in planned substantive tests.
Audit programs should be designed so that: - ANSWER-the audit evidence gathered
supports the auditor's conclusions.
In designing a written audit plan, an auditor should establish specific audit objectives
that relate primarily to the: - ANSWER-Financial Statement assertions
The permanent file of an auditor's working papers generally would not include: -
ANSWER-a working trial balance.
In addition to descriptions of the nature, timing, and extent of planned risk assessment
procedures and planned further audit procedures, which of the following additional
pieces of information should be documented in the audit plan? - ANSWER-Other audit
procedures to be performed to comply with generally accepted auditing standards
A written audit plan is required to be prepared by an auditor for: - ANSWER-Every audit
An auditor who performed analytical procedures that compared current-year financial
information to the comparable prior period noted a significant increase in net income.
Given this result, which of the following expectations of recorded amounts would be
unreasonable? - ANSWER-A decrease in retained earnings
An auditor should design the written audit plan so that: - ANSWER-the audit procedures
selected will achieve specific audit objectives.
,Which of the following factors most likely would influence an auditor's determination of
the auditability of an entity's financial statements? - ANSWER-The adequacy of the
accounting records
An accountant was asked by a potential client to perform a compilation of its financial
statements. The accountant is not familiar with the industry in which the client operates.
In this situation, which of the following actions is the accountant most likely to take? -
ANSWER-Accept the engagement and obtain an adequate level of knowledge about
the industry
To compile financial statements, the accountant should possess a general
understanding of the nature of the entity's operations. This most likely will include which
of the following? - ANSWER-Stated qualifications of the entity's accounting personnel
When planning a review of an audit client's interim financial statements, which of the
following procedures should the accountant perform to update the accountant's
knowledge about the entity's business and its internal control? - ANSWER-Consider the
results of audit procedures performed with respect to the current year's financial
statements
Which of the following procedures would an auditor least likely perform in planning a
financial statement audit? - ANSWER-Selecting a sample of vendor invoices for
comparison to receiving reports
In connection with a compilation or review of financial statements, how might an
accountant obtain an understanding of an entity's business, including the stated
qualifications of accounting personnel?
1. Experience with the entity
2. Inquiry of the entity's personnel - ANSWER-Both 1 and 2
If an accountant has no previous experience in the prospective client's industry, he or
she may obtain the required level of knowledge through which of the following?
AICPA guides
Industry publications
Financial statement of other entities in the industry
,All of the ANSWER choices are correct. - ANSWER-All of the above
Which of the following procedures would be generally performed when evaluating the
accounts receivable balance in an engagement to review financial statements in
accordance with the Statements on Standards for Accounting and Review Services
(SSARS)? - ANSWER-Perform a reasonableness test of the balance by computing
days' sales in receivables
Which of the following procedures should an accountant perform during an engagement
to compile prospective financial statements? - ANSWER-Make inquiries about the
accounting principles used in the preparation of the prospective financial statements
When engaged to compile the financial statements of a nonissuer, an accountant is
required to possess a level of knowledge of the entity's accounting principles and
practices. This requirement most likely will include obtaining a general understanding of
the: - ANSWER-stated qualifications of the entity's accounting personnel.
An auditor obtains knowledge about a new client's business and its industry to: -
ANSWER-understand the events and transactions that may have an effect on the
client's financial statements.
The procedure of an accountant obtaining a general level of knowledge of the
accounting principles and practices of the entity's industry is: - ANSWER-Required for a
compilation and a review
A practitioner reporting on pro forma financial information does not possess an
understanding of the client's business and the industry in which the client operates. The
practitioner should take which of the following actions? - ANSWER-Review industry
trade journals
When compiling the financial statements of a nonissuer, an accountant should: -
ANSWER-understand the accounting principles and practices of the entity's industry.
If an accountant has no previous experience in the prospective client's industry, he or
she may obtain the required level of knowledge through all of the following except: -
ANSWER-textbooks and periodicals.
individuals knowledgeable about the industry.
conferences, classes, and workshops.
, The accountant can obtain the required level of knowledge through any of the items
listed.
ANSWER: The accountant can obtain the required level of knowledge through any of
the items listed
To compile financial statements of a nonissuer in accordance with the Statements on
Standards for Accounting and Review Services, an accountant should: - ANSWER-
Obtain a general understanding of the clients business transactions
When reviewing the financial statements of a nonissuer in accordance with the
Statements on Standards for Accounting and Review Services (SSARS), an
accountant's procedures should include: - ANSWER-inquiring into actions taken at
meetings of the board of directors.
In obtaining an understanding of a manufacturing entity's internal control concerning
inventory balances, an auditor most likely would: - ANSWER-review the entity's
descriptions of inventory policies and procedures.
Which of the following procedures is usually the first step in reviewing the financial
statements of a nonissuer? - ANSWER-Obtain a general understanding of the entity's
organization, its operating characteristics, and its products or services.
An auditor reviews a client's accounting policies and procedures when considering
which of the following planning matters? - ANSWER-Understanding the client's
operations and business
In performing interviews and examining documents related to preliminary work in a
financial statement audit of a nonissuer, an auditor identifies a business risk associated
with plans for a new product line. What should the auditor do as a result? - ANSWER-
Analyze the newly identified risk in conjunction with other known business risks and
consider whether there is an immediate consequence for the risk of material
misstatement at various levels of the audit.
Knowledge of the client's "industry, regulatory, and other factors" includes an
understanding of all of the following, except: - ANSWER-the entity's accounting policies
and procedures.
Which of the following is required of an accountant in reviewing a company's financial
statements under the Statements on Standards for Accounting and Review Services
(SSARS)? - ANSWER-Obtain knowledge of the clients industry
