منابع و اطلاعات جامع ازمون کارشناسی ارشد حسابداری, برنامه ريزی,مشاوره ...

مجموعه حاضر حاوی سوالات ازمون ازمایشی برای انتخاب حسابداران رسمی در امریکاست .این مجموعه با هدف تقویت درس زبان تخصصی حسابداری برای داوطلبان ورود به مقطع کارشناسی ارشد ازاد و دکتری تخصصی برای عموم ارایه می گردد.

 

This questions is based on examinations of a CPA preparations in USA KAPLAN CPA inc. according to general needs of accounting students in Iran to knowledge accounting English in Acceptance University, this questions will provide you to answers of azad ma accounting exam.

 

 

Auditing and attestation

Audit Evidence

 

Question 1:


Before applying principal substantive tests to the details of accounts at an interim date prior to the balance sheet date, an auditor should:

 

A. Assess control risk at below the maximum for the assertions embodied in the accounts selected for interim testing.
B. Determine that the accounts selected for interim testing are not material to the financial statements taken as a whole.
C. Consider whether the amounts of the year-end balances selected for interim testing are reasonably predictable.
D. Obtain written representations from management that all financial records and related data will be made available.

 

 

The correct answer is C.

A. Incorrect...
The auditor is not required to assess control risk at below the maximum in order to apply substantive tests at interim. However, the auditor must consider whether the effectiveness of substantive tests over the remaining period would be impaired by an assessment of control risk at maximum. (AU 313)
B. Incorrect...
The auditor would not bother to test accounts at interim unless they were considered material to the financial statements.
C. Correct!
The auditor's objective is to issue an opinion on the financial statements at the balance sheet date. The performance of substantive tests prior to the balance sheet date increases the risk that misstatements may occur at the balance sheet date that the auditor will not detect. As a result, the auditor must consider certain factors carefully before electing to perform such tests. The auditor must consider whether the amounts of the year-end balances selected for interim testing are reasonably predictable with respect to amount, significance, and composition. (AU 313)

D. Incorrect...
The auditor is required to obtain written representations from management that all financial records and related data were made available regardless of whether or not substantive tests are performed at interim. (AU 333)

Question 2:

A lawyer's response to an auditor's inquiry concerning litigation, claims, and assessments may be limited to matters that are considered individually or collectively material to the client's financial statements
Which parties should reach an understanding on the limits of materiality for this purpose?

A. The auditor and the client's management.
B. The client's audit committee and the lawyer.
C. The client's management and the lawyer.
D. The lawyer and the auditor.

 

The correct answer is D.

A. Incorrect...
The lawyer and the auditor must reached an understanding about materiality. This understanding then governs the attorney's response. An understanding about materiality between the auditor and the client is used to limit the request to the attorney to material matters.
B. Incorrect...
The understanding is to be reached by the auditor and the lawyer, not the audit committee and the lawyer.
C. Incorrect...
The understanding is to be reached by the auditor and the lawyer, not the client's management and the lawyer.
D. Correct!
The client's attorney is requested to provide a letter describing and evaluating litigation pending and in process and asserted claims. Immaterial items may be excluded, "provided that the lawyer and the auditor have reached an understanding on the limits of materiality for this purpose" (AU 337.12).

Question3:


Which of the following is an audit procedure that an auditor most likely would perform concerning litigation, claims, and assessments?

A. Request the client's lawyer to evaluate whether the client's pending litigation, claims, and assessments indicate a going concern problem.
B. Examine the legal documents in the client's lawyer's possession concerning litigation, claims, and assessments to which the lawyer has devoted substantive attention.
C. Discuss with management its policies and procedures adopted for evaluating and accounting for litigation, claims, and assessments.
D. Confirm directly with the client's lawyer that all litigation, claims, and assessments have been recorded or disclosed in the financial statements.

 

 

The correct answer is C.

A. Incorrect...
The auditor does not ask the client's lawyer to evaluate the potential for a going concern problem. Responsibility for evaluating going concern belongs to the auditor.
B. Incorrect...
The auditor would not be allowed access to legal documents in the client's lawyer's possession. The auditor should examine legal documents in the client's possession.
C. Correct!
This is the only correct answer. The auditor would discuss with management the controls adopted for identifying, evaluating, and accounting for litigation, claims, and assessments. (AU 337)
D. Incorrect...
The attorney would not necessarily be able to address all litigation, claims, and assessments. The attorney would have knowledge only of those cases that he/she was handling.

Question 4:


Key Co. plans to present comparative financial statements for the years ended December 31, 2004, and 2005, respectively.
Smith, CPA, audited Key's financial statements for both years and plans to report on the comparative financial statements on May 1, 2006. Key's current management team was not present until January 1, 2005.

What period of time should be covered by Key's management representation letter?

 

A. January l, 2004, through December 31, 2005.
B. January 1, 2004, through May 1, 2006.
C. January 1, 2005, through December 31, 2005.
D. January 1, 2005, through May 1, 2006.

 

The correct answer is B.

A. Incorrect...
The period incorrectly stops before the report issuance date.
B. Correct!
The management representation letter should address all periods covered by the auditor's report. Key's management representation letter, therefore, should cover the two periods being audited up through the date of the report, i.e., from January 1, 2004 through May 1, 2006. This requirement exists even if management was not present during all periods covered by the auditor's report.
C. Incorrect...
The period incorrectly includes only one of the two periods being audited and stops before the report issuance date.
D. Incorrect...
The period incorrectly excludes the first period being audited, i.e., 2004.

Question 5:


An auditor may achieve audit objectives related to particular assertions by:

 

A. Performing analytical procedures.
B. Adhering to a system of quality control.
C. Preparing auditor working papers.
D. Increasing the level of detection risk.

 

The correct answer is A.

A. Correct!
This doesn't seem to be worded very well. Audit objectives are RELATED to particular assertions. Nonetheless, audit objectives relating to particular assertions are achieved through the performance of substantive procedures. Substantive procedures include analytical procedures. (AU 326)
B. Incorrect...
The auditor's adherence to a system of quality control ensures that the audit is performed in accordance with generally accepted auditing standards. It does not directly provide evidence to support assertions. It ensures that sufficient competent evidence is gathered to support the opinion. (AU 161)
C. Incorrect...
The preparation of audit working papers documents the performance of substantive auditing procedures to achieve planned audit objectives and the conclusions reached as well as adherence to generally accepted auditing standards. Work papers do not enable the auditor to achieve audit objectives. They document the work performed to achieve audit objectives. (AU 339)
D. Incorrect...
Increasing the level of detection risk will not enable the auditor to achieve audit objectives. Detection risk relates to the auditing procedures selected to achieve audit objectives. Increasing the level of detection risk allows to auditor to perform fewer and/or less extensive tests to achieve the desired audit objectives. (AU 312,319)


END OF QUIZ



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