Questions from Auditing and Assurance


Q: Which of the following legal situations would be considered to impair the

Which of the following legal situations would be considered to impair the auditor’s independence? a. An expressed intention by the present management to commence litigation against the auditor, allegi...

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Q: A violation of the profession’s ethical standards is least likely to occur

A violation of the profession’s ethical standards is least likely to occur when a CPA a. Purchases another CPA’s accounting practice and bases the price on a percentage of the fees accruing from enti...

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Q: Rick, an independent CPA, must make an ethical judgment related

Rick, an independent CPA, must make an ethical judgment related to the audit of an entity. If he primarily focuses on whether his decision might yield unfair advantages for some at the expense of othe...

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Q: During the audit of Moon Co., the auditor disagrees with management’s

During the audit of Moon Co., the auditor disagrees with management’s estimation of collectible accounts receivable. The possible misstatement amount is material. Which of the statements below should...

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Q: Without the consent of the entity, a CPA should not disclose

Without the consent of the entity, a CPA should not disclose confidential entity information contained in working papers to a(n) a. Authorized quality control review board. b. Successor CPA firm that...

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Q: The Brant Group reported total interest expense for the year of $

The Brant Group reported total interest expense for the year of $2,000. The table below provides the monthly balance of their long-term debt. Interest is paid monthly on the average daily balance duri...

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Q: One of a CPA firm’s basic objectives is to provide professional services

One of a CPA firm’s basic objectives is to provide professional services that conform with professional standards. Reasonable assurance of achieving this basic objective is provided through a. A syste...

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Q: In connection with the element of engagement performance, a CPA firm’s

In connection with the element of engagement performance, a CPA firm’s system of quality control should ordinarily include procedures covering all of the following except a. Performance evaluation. b....

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Q: Cable Corporation orally engaged Drake & Company, CPAs, to audit

Cable Corporation orally engaged Drake & Company, CPAs, to audit its financial statements. Though the financial statements Drake audited included a materially overstated accounts receivable balance, D...

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Q: Which of the following best describes whether a CPA has met the

Which of the following best describes whether a CPA has met the required standard of care in auditing an entity’s financial statements? a. Whether the client’s expectations are met with regard to the...

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