Questions from Auditing and Assurance

Q: Define control risk and explain the role of control risk assessment in

Define control risk and explain the role of control risk assessment in audit planning.

Q: Analytical procedures used when planning an audit should concentrate on a

Analytical procedures used when planning an audit should concentrate on a. Weaknesses in the company’s internal control activities. b. Predictability of account balances based on individual significan...

Q: Auditors are not responsible for accounting estimates with respect to a

Auditors are not responsible for accounting estimates with respect to a. Making the estimates. b. Determining the reasonableness of estimates. c. Determining that estimates are presented in conformity...

Q: An audit strategy memorandum contains a. Specifications of auditing standards

An audit strategy memorandum contains a. Specifications of auditing standards relevant to the financial statements being audited. b. Specifications of procedures the auditors believe appropriate for t...

Q: Under the Private Securities Litigation Reform Act (the Act), independent

Under the Private Securities Litigation Reform Act (the Act), independent auditors are required to first a. Report in writing all instances of noncompliance with the Act to the client’s board of direc...

Q: When evaluating whether accounting estimates made by management are reasonable, auditors

When evaluating whether accounting estimates made by management are reasonable, auditors would be most interested in which of the following? a. Key factors that are consistent with prior periods. b. A...

Q: Martin is considering submitting a proposal to conduct the audit examination of

Martin is considering submitting a proposal to conduct the audit examination of Phillip Inc., a manufacturer and distributor of automotive parts to the large automobile manufacturers. Martin learned o...

Q: An audit committee is a. Composed of internal auditors.

An audit committee is a. Composed of internal auditors. b. Composed of members of the audit team. c. Composed of members of a company’s board of directors who are not involved in the day-to-day operat...

Q: When auditors become aware of noncompliance with a law or regulation committed

When auditors become aware of noncompliance with a law or regulation committed by client personnel, the primary reason that the auditors should obtain a better understanding of the nature of the act i...

Q: Which of the following statements best describes auditors’ responsibility for detecting a

Which of the following statements best describes auditors’ responsibility for detecting a client’s noncompliance with a law or regulation? a. The responsibility for detecting noncompliance exactly par...