All Related Questions of Reasonable Assurance

Q: Following is the unqualified audit report for the City of Sand Key

Following is the unqualified audit report for the City of Sand Key. The Honorable Mayor Members of the City Commission and City Manager City of Sand Key We have audited the accompanying financial stat...

Q: The following are selected portions of the report of management from a

The following are selected portions of the report of management from a published annual report. REPORT OF MANAGEMENT Management's Report on Internal Control over Financial Reporting The Company's mana...

Q: The following questions concern quality control standards. Choose the best response

The following questions concern quality control standards. Choose the best response. a. A CPA firm is reasonably assured of meeting its responsibility to provide services that conform with professiona...

Q: For each of the following procedures taken from the quality control manual

For each of the following procedures taken from the quality control manual of a CPA firm, identify the applicable element of quality control from Table 2-4. .:. a. Appropriate accounting and auditing...

Q: Patel, CPA, has completed the audit of the financial statements

Patel, CPA, has completed the audit of the financial statements of Bellamy Corporation as of and for the year ended December 31, 2011. Patel also audited and reported on the Bellamy financial statemen...

Q: The following is an auditor's report prepared in accordance with International Standards

The following is an auditor's report prepared in accordance with International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB): INDEPENDENT AUDI...

Q: Following are evidence decisions for the three audits described in Figure 3

Following are evidence decisions for the three audits described in Figure 3-3 Figure 3-3 Audit A Ineffective client internal controls Audit B Very effective client internal controls Audit C Somewhat e...

Q: Define the meaning of the term materiality as it is used in

Define the meaning of the term materiality as it is used in accounting and auditing. What is the relationship between materiality and the phrase obtain reasonable assurance used in the auditor's repor...

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...

Q: Auditing standards do not require auditors of financial statements to a

Auditing standards do not require auditors of financial statements to a. Understand the nature of errors and frauds. b. Assess the risk of occurrence of errors and frauds. c. Design audits to provide...

Q: Sorrell, CPA, is auditing the financial statements of Van Dyke

Sorrell, CPA, is auditing the financial statements of Van Dyke as of December 31, 2017. Sorrell’s substantive procedures and other tests indicated that Van Dyke’s f...

Q: One of an accounting firm’s basic objectives is to provide professional services

One of an accounting firm’s basic objectives is to provide professional services that conform to professional standards. Reasonable assurance of achieving this objective can be obtained by following a...

Q: Define reasonable assurance. How does the audit team provide reasonable assurance

Define reasonable assurance. How does the audit team provide reasonable assurance in the engagement?

Q: C. Marsh, CPA, is the independent auditor for Compufast

C. Marsh, CPA, is the independent auditor for Compufast Corporation, which sells personal computers, peripheral equipment (printers, data storage), and a wide variety of programs for business and game...

Q: The board of directors of Cook Industries Inc. engaged Brown &

The board of directors of Cook Industries Inc. engaged Brown & Brown, CPAs, to audit the financial statements for the year ended December 31, 2017. Required: Identify the deficiencies in the fol...

Q: An assistant drafted the following auditors’ report at the completion of the

An assistant drafted the following auditors’ report at the completion of the audit of Cramdon Inc. on March 5, 2018. The partner in charge of the engagement has decided the opinion o...

Q: Following is Rex Wolf’s report on Bonair Corporation’s financial statements. Bonair

Following is Rex Wolf’s report on Bonair Corporation’s financial statements. Bonair publishes general-purpose financial statements for distribution to owners, credi...

Q: The following auditors’ report was drafted by Quinn Moore, a staff

The following auditors’ report was drafted by Quinn Moore, a staff auditor with Tyler & Tyler, CPAs, at the completion of the audit of the financial statements of Park Publishing...

Q: Internal control systems include policies and procedures designed to provide reasonable assurance

Internal control systems include policies and procedures designed to provide reasonable assurance that the corporation’s objectives are being met in three areas: (a) Effectiveness and efficiency of o...

Q: Internal control systems include policies and procedures designed to provide reasonable assurance

Internal control systems include policies and procedures designed to provide reasonable assurance that the corporation’s objectives are being met in three areas: (a) Effectiveness and efficiency of o...

Q: Select the best answer. 1. Government Auditing Standards

Select the best answer. 1. Government Auditing Standards must be adhered to in all financial audits of a. State and local governments b. Federal agencies c. Federally chartered banks d. All of the ab...

Q: As the company accountant, explain the following ideas to the management

As the company accountant, explain the following ideas to the management of Ortiz Company. (a) The concept of reasonable assurance in internal control. (b) The importance of the human factor in intern...

Q: The management of Sewell Company asks you, as the company accountant

The management of Sewell Company asks you, as the company accountant, to explain (a) the concept of reasonable assurance in internal control and (b) the importance of the human factor in internal cont...

Q: As the company accountant, explain the following ideas to the management

As the company accountant, explain the following ideas to the management of Jurgens Company. (a) The concept of reasonable assurance in internal control. (b) The importance of the human factor in inte...

Q: Following is the audit report for the City of Prairie View.

Following is the audit report for the City of Prairie View. Citizens of Prairie View: Split Responsibility for Financial Statements We have audited the accompanying financial statements of the City of...

Q: As the company accountant, the management of Nickle Company asks you

As the company accountant, the management of Nickle Company asks you to explain (a) the concept of reasonable assurance in internal control and (b) the importance of the human factor in internal con...

Q: As the company accountant, explain the following ideas to the management

As the company accountant, explain the following ideas to the management of Ortiz Company. (a) The concept of reasonable assurance in internal control. (b) The importance of the human factor in intern...

Q: The following excerpt was taken from Alphabet, Inc.’s 10

The following excerpt was taken from Alphabet, Inc.’s 10-K report for its 2016 fiscal year. Alphabet, Inc. is the parent company of Google, Inc. CONTROLS AND PROCEDURES Evaluation of Disclosure Contro...

Q: Select the best answer for each of the following items and give

Select the best answer for each of the following items and give reasons for your choice. a. Which of the following organizations can revoke the right of an individual to practice as a CPA? (1) The Pub...

Q: Casa Royale, Inc., a public company, retains Ying and

Casa Royale, Inc., a public company, retains Ying and Company CPA to audit its financial statements and internal control. Howard Smythe, the partner in charge of the audit, drafted the following unqua...

Q: For each term in the first column, select the partial (

For each term in the first column, select the partial (or complete) definition or illustration. Each partial (or complete) definition or illustration may be used only once.

Q: The existence of audit risk is recognized by the statement in the

The existence of audit risk is recognized by the statement in the auditor’s standard report that the auditor a. Obtains reasonable assurance about whether the financial statements are free of material...

Q: What is meant by the concept of reasonable assurance in terms of

What is meant by the concept of reasonable assurance in terms of internal control? What are the inherent limitations of internal control?

Q: Internal control is a process designed to provide reasonable assurance regarding the

Internal control is a process designed to provide reasonable assurance regarding the achievement of which objective? a. Effectiveness and efficiency of operations. b. Reliability of financial reportin...

Q: SOC 1, Type 2 reports issued by the service organization’s auditor

SOC 1, Type 2 reports issued by the service organization’s auditor typically a. Provide reasonable assurance that their financial statements are free of material misstatements. b. Ensure that the enti...

Q: Which of the following statements best describes management’s and the external auditor’s

Which of the following statements best describes management’s and the external auditor’s respective levels of responsibility for a public company’s financial statements? a. Management and the external...

Q: You are an audit manager for Lipske & Griffin, CPAs,

You are an audit manager for Lipske & Griffin, CPAs, who is completing the audit of Gold City Regional Bank’s ICFR for the year ended December 31, 2018. The report will be submitted to the engagement...

Q: The flowchart shown below depicts the activities relating to the purchasing,

The flowchart shown below depicts the activities relating to the purchasing, receiving, and accounts payable departments of Model Company, Inc. Required: Based only on the flowchart, describe the co...

Q: Auditors should plan and perform their audits to provide reasonable assurance of

Auditors should plan and perform their audits to provide reasonable assurance of detecting material misstatements in financial statements, including those resulting from fraud. Required: a. Distingui...

Q: To establish the existence and rights of a long-term investment

To establish the existence and rights of a long-term investment in the common stock of a publicly traded company, an auditor ordinarily performs a security count or a. Relies on the entity’s internal...

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...

Q: Which of the following is a provision of the Foreign Corrupt Practices

Which of the following is a provision of the Foreign Corrupt Practices Act? a. It is a criminal offense for an auditor to fail to detect and report a bribe paid by an American business entity to a for...

Q: The following auditor’s report was drafted by a staff accountant of Nathan

The following auditor’s report was drafted by a staff accountant of Nathan and Matthew, CPAs, at the completion of the audit of the comparative financial statements of Monterey for the years ended Dec...

Q: Select the best answer for each of the questions below and explain

Select the best answer for each of the questions below and explain fully the reason for your selection. a. To assure accountability for fixed-asset retirements, management should implement an internal...

Q: The auditors’ report that follows was drafted by a staff accountant of

The auditors’ report that follows was drafted by a staff accountant of Williams & Co., CPAs, at the completion of the audit of the financial statements of Lenz Corporation (nonpu...

Q: This simulation, available online, presents a draft of a nonpublic

This simulation, available online, presents a draft of a nonpublic company audit report document and three exhibits. To allow this DRS to stand alone without consideration of other parts of the Keysto...

Q: Match the following definitions (or partial definitions) to the appropriate

Match the following definitions (or partial definitions) to the appropriate term. Each term may be used once or not at all.

Q: Refer to the Under Armour, Inc., Financial Statements in Appendix

Refer to the Under Armour, Inc., Financial Statements in Appendix B and online in the filings section of http://www.sec.gov. Requirements 1. Focus on cash and cash equivalents. Why d...

Q: Delta Ltd has been developing a lightweight automated wheelchair. The research

Delta Ltd has been developing a lightweight automated wheelchair. The research costs written off have been far greater than originally estimated and the equity and preference capital has been eroded a...

Q: Delta Ltd has been developing a lightweight automated wheelchair. The research

Delta Ltd has been developing a lightweight automated wheelchair. The research costs written off have been far greater than originally estimated and the equity and preference capital has been eroded a...

Q: Please match each item on the right with the best item on

Please match each item on the right with the best item on the left.

Q: Ron McLellan established his business, McLellan’s Shoes, in 1980.

Ron McLellan established his business, McLellan’s Shoes, in 1980. Ron keeps records and his wife helps him prepare basic accounting records. As McLellan’s Shoes has no outside owners, Ron has never se...

Q: A sample audit report is provided in figure 1.3 in

A sample audit report is provided in figure 1.3 in this chapter. A sample review engagement report is provided in figure 1.4. Required: a. What is the auditor’s responsibility as de...

Q: You have recently graduated from university and have started work with an

You have recently graduated from university and have started work with an audit firm. You meet an old school friend, Kim, for dinner—you haven’t seen each other for several years. Kim is surprised tha...

Q: What does reasonable assurance mean?

What does reasonable assurance mean?

Q: The following questions concern auditor responsibilities in an audit of financial statements

The following questions concern auditor responsibilities in an audit of financial statements. Choose the best response. a. The auditor’s responsibility regarding material misstatements caused by fraud...

Q: The IAASB recently revised its standards related to audit reporting. ISA

The IAASB recently revised its standards related to audit reporting. ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements, requires the auditor’s report to include the following...

Q: The following questions concern the assessment of the risk of material misstatements

The following questions concern the assessment of the risk of material misstatements. Choose the best response. a. Which of the following circumstances most likely would cause the auditor to suspect t...

Q: The following questions deal with errors and fraud. Choose the best

The following questions deal with errors and fraud. Choose the best response. a. An independent auditor has the responsibility to design the audit to provide reasonable assurance of detecting errors a...

Q: The following questions concern quality control standards. Choose the best response

The following questions concern quality control standards. Choose the best response. a. The nature and extent of a CPA firm’s quality control policies and procedures depend on b. W...

Q: The following questions address fraud risk factors and the assessment of fraud

The following questions address fraud risk factors and the assessment of fraud risk. a. Which action regarding fraud is an activity related to performance of risk assessment procedures? (1) Document t...

Q: Patel, CPA, has completed the audit of the financial statements

Patel, CPA, has completed the audit of the financial statements of Bellamy Corporation as of and for the year ended December 31, 2019. Patel also audited and reported on the Bellamy financial statemen...

Q: The following questions deal with governmental auditing. Choose the best response

The following questions deal with governmental auditing. Choose the best response. a. Although the scope of audits of recipients of federal financial assistance in accordance with federal audit regula...

Q: The amount of subjectivity involved in establishing fair value estimates can be

The amount of subjectivity involved in establishing fair value estimates can be complex for management responsible for making the fair value measurements and disclosures contained in financial stateme...

Q: Auditors must plan and perform an audit to obtain reasonable assurance about

Auditors must plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatements, which may be caused by either error or fraud. Errors a...

Q: The following excerpt was taken from Alphabet, Inc.’s 10

The following excerpt was taken from Alphabet, Inc.’s 10-K report for its 2019 fiscal year. Alphabet, Inc. is the parent company of Google, Inc. CONTROLS AND PROCEDURES Evaluation of Disclosure Contro...

Q: Moncton Developments Ltd. was established in early 20X2. During the

Moncton Developments Ltd. was established in early 20X2. During the first three years, the company followed the policy of expensing its development costs rather than capitalizing and amortizing them....

Q: On September 10, 2019, the Public Company Accounting Oversight Board

On September 10, 2019, the Public Company Accounting Oversight Board (PCAOB) censured Marcum LLP and Alfonse Gregory on the basis of its findings that Marcum repeatedly violated PCAOB rules and standa...

Q: Winners & Losers, Inc. (WLI) is a Nevada

Winners & Losers, Inc. (WLI) is a Nevada corporation with its principal place of business in Las Vegas. Its business model is to provide electronic sports betting in conjunction with a new law tha...

Q: It took a long time but the Securities and Exchange Commission finally

It took a long time but the Securities and Exchange Commission finally acted and held auditors responsible for the fraud that occurred in banks during the financial recession in 2014. Surprisingly to...

Q: In mid-2011, Sino-Forest Corporation was a company

In mid-2011, Sino-Forest Corporation was a company with timber operations in China, including tree plantation (holding of timber for appreciation and/or harvesting), log and wood products trading, and...

Q: John C. Koss started his first company, J.C

John C. Koss started his first company, J.C. Koss Hospital Television Rental Company, in 1953, based in Milwaukee, Wisconsin, but John had greater ambitions. Eventually he partnered with Martin Lange,...

Q: On November 15, 2004, the Securities and Exchange Commission (

On November 15, 2004, the Securities and Exchange Commission (SEC) filed an enforcement action in the Northern Illinois U.S. District Court against Hollinger Inc., a Toronto-based company, and its for...