AUDITING A RISK BASED APPROACH
COMPREHENSIVE EXAM SCRIPT VERIFIED
QUESTIONS AND SOLUTIONS GRADED
APLUS
●● Which of the following factors does not create a demand for external
audit services?
a. Potential bias by management in providing information.
b. Requirements of the state boards of accountancy.
c. Complexity of the accounting processing systems.
d. Remoteness between a user and the organization.
Answer: Requirements of the state boards of accountancy.
●● Audit quality involves which of the following?
a. Performing an audit in accordance with GAAS to provide reasonable
assurance that the audited financial statements and related disclosures
are presented in accordance with GAAP and providing assurance that
those financial statements are not materially misstated whether due to
errors or fraud.
b. Performing an audit in accordance with GAAP to provide reasonable
assurance that the audited financial statements and related disclosures
,are presented in accordance with GAAS and providing assurance that
those financial statements are not materially misstated whether due to
errors or fraud.
c. Performing an audit in accordance with GAAS to provide absolute
assurance that the audited financial statements and related disclosures
are presented in accordance with GAAP and providing assurance that
those financial statements are not materially misstated whether due to
errors or
Answer: Performing an audit in accordance with GAAS to provide
reasonable assurance that the audited financial statements and related
disclosures are presented in accordance with GAAP and providing
assurance that those financial statements are not materially misstated
whether due to errors or fraud.
●● Which of the following factors is not a driver of audit quality as
discussed by the FRC?
a. Audit firm culture.
b. Skills and personal qualities of client management.
c. Reliability and usefulness of audit reporting.
d. Factors outside the control of auditors
Answer: Skills and personal qualities of client management.
●● Which of the following is not a threat to auditor independence?
,a. Self-review threat.
b. Advocacy threat.
c. Adverse interest threat.
d. Regulatory interest threat.
Answer: Regulatory interest threat.
●● Which of the following statements is false?
a. An auditor in public practice shall be independent in the performance
of professional services.
b. In performing audit services, the auditor shall maintain objectivity and
integrity, be free of conflicts of interest, and not knowingly misrepresent
facts or subordinate his or her judgment to others.
c. In performing audit services, the auditor may accept only contingent
fees for publicly traded audit clients.
d. An auditor in public practice shall not seek to obtain clients by
advertising or other forms of solicitation in a manner that is false,
misleading, or deceptive.
Answer: In performing audit services, the auditor may accept only
contingent fees for publicly traded audit clients.
●● Which of the following statements related to rights theory is false?
, a. The highest-order rights include the rights to life, autonomy, and
human dignity.
b. Second-order rights include rights granted by the government, such as
civil rights and legal rights.
c. Third-order rights include social rights, such as the right to higher
education, to good health care, and to earning a living.
d. Fourth-order rights include one's essential interests or personal tastes.
Answer: Fourth-order rights include one's essential interests or personal
tastes.
●● Utilitarianism does not require which of the following actions when
a person considers how to resolve an ethical dilemma?
a. Identification of the potential problem and courses of action.
b. Identification of the potential direct or indirect impact of actions on
each affected party who has an interest in the outcome.
c. Identification of the motivation of the person facing the ethical
dilemma.
d. Assessment of the desirability of each action for each affected party
Answer: Identification of the motivation of the person facing the ethical
dilemma.
●● With regard to client acceptance/continuance decisions, which of the
following is false?
COMPREHENSIVE EXAM SCRIPT VERIFIED
QUESTIONS AND SOLUTIONS GRADED
APLUS
●● Which of the following factors does not create a demand for external
audit services?
a. Potential bias by management in providing information.
b. Requirements of the state boards of accountancy.
c. Complexity of the accounting processing systems.
d. Remoteness between a user and the organization.
Answer: Requirements of the state boards of accountancy.
●● Audit quality involves which of the following?
a. Performing an audit in accordance with GAAS to provide reasonable
assurance that the audited financial statements and related disclosures
are presented in accordance with GAAP and providing assurance that
those financial statements are not materially misstated whether due to
errors or fraud.
b. Performing an audit in accordance with GAAP to provide reasonable
assurance that the audited financial statements and related disclosures
,are presented in accordance with GAAS and providing assurance that
those financial statements are not materially misstated whether due to
errors or fraud.
c. Performing an audit in accordance with GAAS to provide absolute
assurance that the audited financial statements and related disclosures
are presented in accordance with GAAP and providing assurance that
those financial statements are not materially misstated whether due to
errors or
Answer: Performing an audit in accordance with GAAS to provide
reasonable assurance that the audited financial statements and related
disclosures are presented in accordance with GAAP and providing
assurance that those financial statements are not materially misstated
whether due to errors or fraud.
●● Which of the following factors is not a driver of audit quality as
discussed by the FRC?
a. Audit firm culture.
b. Skills and personal qualities of client management.
c. Reliability and usefulness of audit reporting.
d. Factors outside the control of auditors
Answer: Skills and personal qualities of client management.
●● Which of the following is not a threat to auditor independence?
,a. Self-review threat.
b. Advocacy threat.
c. Adverse interest threat.
d. Regulatory interest threat.
Answer: Regulatory interest threat.
●● Which of the following statements is false?
a. An auditor in public practice shall be independent in the performance
of professional services.
b. In performing audit services, the auditor shall maintain objectivity and
integrity, be free of conflicts of interest, and not knowingly misrepresent
facts or subordinate his or her judgment to others.
c. In performing audit services, the auditor may accept only contingent
fees for publicly traded audit clients.
d. An auditor in public practice shall not seek to obtain clients by
advertising or other forms of solicitation in a manner that is false,
misleading, or deceptive.
Answer: In performing audit services, the auditor may accept only
contingent fees for publicly traded audit clients.
●● Which of the following statements related to rights theory is false?
, a. The highest-order rights include the rights to life, autonomy, and
human dignity.
b. Second-order rights include rights granted by the government, such as
civil rights and legal rights.
c. Third-order rights include social rights, such as the right to higher
education, to good health care, and to earning a living.
d. Fourth-order rights include one's essential interests or personal tastes.
Answer: Fourth-order rights include one's essential interests or personal
tastes.
●● Utilitarianism does not require which of the following actions when
a person considers how to resolve an ethical dilemma?
a. Identification of the potential problem and courses of action.
b. Identification of the potential direct or indirect impact of actions on
each affected party who has an interest in the outcome.
c. Identification of the motivation of the person facing the ethical
dilemma.
d. Assessment of the desirability of each action for each affected party
Answer: Identification of the motivation of the person facing the ethical
dilemma.
●● With regard to client acceptance/continuance decisions, which of the
following is false?
