CBS Auditing Principles & Procedures 2

Question 1

Which type of audit opinion is issued when financial statements contain a material misstatement that is pervasive to the statements as a whole?

Accepted Answer

Adverse opinion

Answer

An adverse opinion is issued when misstatements are both material and pervasive, meaning they affect the financial statements as a whole.

Question 2

The concept of 'professional skepticism' in auditing requires auditors to:

Accepted Answer

Maintain a questioning mind and critically assess evidence

Answer

Professional skepticism means maintaining a questioning mind and critically assessing audit evidence rather than blindly accepting management representations.

Question 3

In budget auditing, a 'variance analysis' primarily compares:

Accepted Answer

Budgeted amounts against actual expenditures

Answer

Variance analysis compares budgeted (planned) amounts against actual expenditures to identify deviations that require explanation.

Question 4

Which audit procedure involves independently confirming balances or transactions directly with third parties?

Accepted Answer

Confirmation

Answer

Confirmation involves obtaining representations from independent third parties (e.g., banks, customers) to verify account balances or transactions.

Question 5

A government budget audit that evaluates whether programs achieved their intended outcomes is called a:

Accepted Answer

Performance audit

Answer

A performance audit (also called a program audit) assesses economy, efficiency, and effectiveness—including whether programs met their goals.

(CBS) Certified Budget Specialist Practice Test

(CBS) Certified Budget Specialist Practice Test

CBS Auditing Principles & Procedures 2