AICPA Auditing and Attestation 2

Question 1

An auditor discovers that a client's internal control over cash disbursements is weak. Which audit response is most appropriate?

Accepted Answer

Increase substantive testing over cash disbursements

Answer

Withdraw from the engagement immediately

Answer

Issue a qualified opinion without further testing

Answer

Rely solely on management's representations

Question 2

Which type of analytical procedure compares current-year financial ratios to prior-year ratios and industry benchmarks?

Accepted Answer

Ratio analysis

Answer

Trend analysis

Answer

Regression analysis

Answer

Reasonableness testing

Question 3

Under PCAOB standards, an integrated audit requires the auditor to express opinions on which two items?

Accepted Answer

Financial statements and internal control over financial reporting

Answer

Financial statements and management's discussion & analysis

Answer

Internal controls and compliance with laws

Answer

Going concern and internal controls

Question 4

When an auditor is unable to obtain sufficient appropriate audit evidence about a material account balance, the appropriate audit report modification is:

Accepted Answer

Qualified opinion or disclaimer of opinion

Answer

Adverse opinion

Answer

Unmodified opinion with an emphasis paragraph

Answer

Compilation report

Question 5

Which sampling method gives every item in a population an equal and nonzero chance of selection?

Accepted Answer

Random sampling

Answer

Haphazard sampling

Answer

Judgmental sampling

Answer

Systematic sampling with a random start

Question 6

The concept of 'audit risk' is best described as the risk that:

Accepted Answer

The auditor expresses an inappropriate opinion on materially misstated financial statements

Answer

The client will commit fraud during the audit period

Answer

Internal controls will fail to prevent errors

Answer

The auditor's report will be misunderstood by users

Question 7

A predecessor auditor's working papers may be reviewed by a successor auditor primarily to obtain information about:

Accepted Answer

Significant accounting policies and prior audit findings

Answer

The client's future business plans

Answer

Management's competence and integrity evaluations

Answer

The client's tax return positions