ACCT 401 Unit 9 fully solved &
updated
A secondary result of the auditor's understanding of internal control
for a nonissuer is that the understanding may
A. Provide a basis for determining the nature, timing, and extent of
audit tests
B. Assure that management's procedures to detect fraud are
properly functioning
C. Bring to the auditor's attention possible control conditions
required to be communicated to the client
D. Develop evidence to support the assessed risks of material
misstatement - answer C. Bring to the auditor's attention possible
control conditions required to be communicated to the client
Which of the following issues related to internal control over
financial reporting are required to be communicated in writing to
management and those charged with governance?
I. Deficiencies in internal control
II. Significant deficiencies
III. Material weaknesses
A. I, II, III
B. II and III only
C. III only
D. None - answer B. II and III only
Which of the following best describes the responsibility of an
auditor of a private entity with respect to significant deficiencies
,and material weaknesses under AU-C 265, Communication of
Internal Control Related Matters Identified in an Audit?
A. The auditor need not report the conditions if those charged with
governance know of them
B. The auditor must exercise due diligence in searching for
significant deficiencies and material weaknesses
C. The communication by the auditor must be in writing
D. The auditor's report is general-use report and may be distributed
to the shareholders - answer C. The communication by the auditor
must be in writing
When communicating significant deficiencies in internal control
noted in financial statement audit of a nonissuer, the
communication should indicate that
A. Fraud or errors may occur and not be detected because of the
inherent limitations of internal control
B. The expression of an unmodified opinion on the financial
statements may be dependent on corrective follow-up action
C. The deficiencies noted were not detected within a timely period
by employees in the normal course of performing their assigned
functions
D. The purpose of the audit was to report on the financial
statements, not to provide assurance on internal control - answer D.
The purpose of the audit was to report on the financial statements,
not to provide assurance on internal control
Which of the following statements about an auditor's
communication of internal control related matters identified in an
audit of a nonissuer is true?
A. The auditor may issue a written report to management and those
charged with governance that no significant deficiencies were noted
, B. Significant deficiencies or material weaknesses need not be
recommunicated each year if the audit committee has
acknowledged its understanding of such deficiencies
C. Significant deficiencies or material weaknesses may not be
communicated in a document that contains suggestions regarding
activities that concern other topics such as business strategies or
administrative efficiencies
D. The auditor should communicate significant internal control
related matters no later than 60 days after the report release date -
answer D. The auditor should communicate significant internal
control related matters no later than 60 days after the report
release date
Under the AICPA's auditing standards, which of the following
statements about an auditor's communication of significant control
deficiencies is true?
A. A significant control deficiency previously communicated during
the prior year's audit that remains uncorrected causes a scope of
limitation
B. An auditor should perform test of controls on significant control
deficiencies before communicating them to the client
C. An auditor's report on significant control deficiencies should
include a restriction on the use of the report
D. An auditor should communicate significant control deficiencies
after tests of controls, but before commencing substantive tests -
answer C. An auditor's report on significant control deficiencies
should include a restriction on the use of the report
Which of the following representations should not be included in a
written report on internal control related matters identified in an
audit under the AICPA's auditing standards?
A. Significant deficiencies related to the design of internal control
exist, but none are deemed to be material weaknesses
updated
A secondary result of the auditor's understanding of internal control
for a nonissuer is that the understanding may
A. Provide a basis for determining the nature, timing, and extent of
audit tests
B. Assure that management's procedures to detect fraud are
properly functioning
C. Bring to the auditor's attention possible control conditions
required to be communicated to the client
D. Develop evidence to support the assessed risks of material
misstatement - answer C. Bring to the auditor's attention possible
control conditions required to be communicated to the client
Which of the following issues related to internal control over
financial reporting are required to be communicated in writing to
management and those charged with governance?
I. Deficiencies in internal control
II. Significant deficiencies
III. Material weaknesses
A. I, II, III
B. II and III only
C. III only
D. None - answer B. II and III only
Which of the following best describes the responsibility of an
auditor of a private entity with respect to significant deficiencies
,and material weaknesses under AU-C 265, Communication of
Internal Control Related Matters Identified in an Audit?
A. The auditor need not report the conditions if those charged with
governance know of them
B. The auditor must exercise due diligence in searching for
significant deficiencies and material weaknesses
C. The communication by the auditor must be in writing
D. The auditor's report is general-use report and may be distributed
to the shareholders - answer C. The communication by the auditor
must be in writing
When communicating significant deficiencies in internal control
noted in financial statement audit of a nonissuer, the
communication should indicate that
A. Fraud or errors may occur and not be detected because of the
inherent limitations of internal control
B. The expression of an unmodified opinion on the financial
statements may be dependent on corrective follow-up action
C. The deficiencies noted were not detected within a timely period
by employees in the normal course of performing their assigned
functions
D. The purpose of the audit was to report on the financial
statements, not to provide assurance on internal control - answer D.
The purpose of the audit was to report on the financial statements,
not to provide assurance on internal control
Which of the following statements about an auditor's
communication of internal control related matters identified in an
audit of a nonissuer is true?
A. The auditor may issue a written report to management and those
charged with governance that no significant deficiencies were noted
, B. Significant deficiencies or material weaknesses need not be
recommunicated each year if the audit committee has
acknowledged its understanding of such deficiencies
C. Significant deficiencies or material weaknesses may not be
communicated in a document that contains suggestions regarding
activities that concern other topics such as business strategies or
administrative efficiencies
D. The auditor should communicate significant internal control
related matters no later than 60 days after the report release date -
answer D. The auditor should communicate significant internal
control related matters no later than 60 days after the report
release date
Under the AICPA's auditing standards, which of the following
statements about an auditor's communication of significant control
deficiencies is true?
A. A significant control deficiency previously communicated during
the prior year's audit that remains uncorrected causes a scope of
limitation
B. An auditor should perform test of controls on significant control
deficiencies before communicating them to the client
C. An auditor's report on significant control deficiencies should
include a restriction on the use of the report
D. An auditor should communicate significant control deficiencies
after tests of controls, but before commencing substantive tests -
answer C. An auditor's report on significant control deficiencies
should include a restriction on the use of the report
Which of the following representations should not be included in a
written report on internal control related matters identified in an
audit under the AICPA's auditing standards?
A. Significant deficiencies related to the design of internal control
exist, but none are deemed to be material weaknesses
