Auditing & Assurance Flashcards
7 cards from real CGA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Auditing & Assurance flashcards as text
Which type of audit opinion is issued when financial statements are presented fairly in all material respects but contain a departure from GAAP that is not considered pervasive?
Answer: Qualified opinion
A qualified opinion is issued when a material but non-pervasive GAAP departure exists, using 'except for' language.
Under the risk-based audit approach, which component of the audit risk model represents the susceptibility of an assertion to misstatement before considering internal controls?
Answer: Inherent risk
Inherent risk is the susceptibility of an assertion to misstatement due to error or fraud, ignoring related controls.
An auditor discovers that management has restricted access to key documents during the audit. Which modified opinion is most appropriate if the restriction is pervasive?
Answer: Disclaimer of opinion
A disclaimer of opinion is issued when a scope limitation is so pervasive that the auditor cannot express any opinion.
Which assertion is most relevant when an auditor is verifying that all sales transactions that occurred during the period have been recorded?
Answer: Completeness
The completeness assertion addresses whether all transactions that should have been recorded have been included in the financial statements.
The concept of 'professional skepticism' in auditing requires the auditor to:
Answer: Maintain a questioning mind and critically assess audit evidence
Professional skepticism means maintaining a questioning mind and critically evaluating evidence without assuming either honesty or dishonesty.
In an integrated audit required under PCAOB standards, which two opinions does the auditor express?
Answer: Opinions on financial statements and internal control over financial reporting
A PCAOB-required integrated audit results in separate opinions on the financial statements and on the effectiveness of internal control over financial reporting.
Which substantive procedure is most effective for verifying the existence of accounts receivable?
Answer: Sending positive confirmation requests to customers
Positive confirmations require the customer to respond whether or not they agree, providing direct third-party evidence of existence.