acc 411 5-2 ntoes

The objective of dual-purpose tests is to: A. Test internal controls as well as transactions and balances using the same test procedures. B. Identify unusual trends or patterns in comparative financial statements. C. Evaluate whether internal controls are operating effectively. D. Detect material misstatements in the financial statements.

Analytical procedures consist of evaluations of financial informationmade by a study of plausible relationships among both financial and nonfinancial data.They range from simple comparisons to the use of complex models involving manyrelationships and elements of data. They involve comparisons of recorded amounts, orratios developed from recorded amounts, to expectations developed by the auditors.a. Describe the broad purposes of analytical procedures.b. When are analytical procedures required during an audit? Explain why auditors useanalytical procedures extensively in all parts of the audit.c. Describe the factors that influence the extent to which an auditor will use the resultsof analytical procedures to reduce detailed tests in meeting audit objectives.*

Analytical procedures consist of evaluating financial information by studying financial and nonfinancial data and looking for plausible or implausible relationships. The procedures can range from making simple comparisons to using complex models involving many relationships and elements of data. They can involve time-series comparisons of recorded amounts and ratios developed from recorded amounts, and they always include comparison to expectations developed by the auditors Describe three purposes of analytical procedures. ) Identify three sources of information from which an auditor develops expectations when performing analytical procedures

Three common types of attestation services are Select one: O a. audits of historical financial information, verifications of historical financial information, and attestations regarding internal controls. b. reviews of historical financial information, verifications of future financial information, and attestations regarding internal controls. audits of historical financial statements, reviews of historical financial statements, and audits of internal control over financial reporting. O d. audits of historical financial information, reviews of controls related to investments, and verifications of historical financial information.

Audit evidence can come in different forms with different degrees of reliability. Which of the following types of evidence is the least reliable?a. Invoices from suppliersb. Bank statements obtained from clientsc. The calculations made by the auditord. Sales invoice unnumbered

8. The essence of the audit function is to: Select one:a. Examine individual transactions so that the auditor may certify as to their validityb. Detect fraudc. Determine whether the client’s financial statements are fairly stated.d. Assure the consistent application of correct accounting procedures.

An independent audit aids in the communication of economic data because the audit ________.         A. Confirms the exact accuracy of the management's financial representations.        B. Lends credibility to the financial statements.        C. Guarantees that the financial data are fairly presented.         D. Assures the readers of financial statements that any fraudulent activity has been corrected.

If the group engagement partner decides that the component auditor cannot access sufficient appropriate audit evidence regarding the component of the financial statements audited, what type of modified opinion will they consider issuing? O modified opinion due to GAAP departure O modified opinion due to scope limitation O adverse opinion O modified opinion due to GAAS departure

Auditors try to identify predictable relationships when using analytical procedures. Relationshiipss involvingtransactions fromwhich of the following accounts most likely would yield the highest level of evidence? a. accounts receivable b. interest expense c. accounts payable d. Travel and entertainment expense

Analytical procedures used in planning an audit should focus on identifying(1) material weaknesses in internal control.(2) the predictability of financial data from individual transactions.(3) the various assertions that are embodied in the financial statements.(4) areas that may represent specific risks relevant to the audit.

Which of the following audit procedures is least appropriate for addressing the assertion of valuation of liabilities?   a. Confirm with creditors b. Test for unrecorded liabilities. c. Perform analytical procedures. d. Verify accounts payable trial balance

Prepare a broad audit plan:1. What material types of transactions and transaction cycles are involved?2. What are the high-risk areas?3. What are the low-risk areas?4. If management faced tremendous pressure regarding the entity’s financial performance, what opportunities might exist for them to engage in fraudulent financial reporting?5. To what extent do you believe it will be appropriate to reduce assessed control risk?6. How will audit effort be allocated among geographical areas?7. What form of auditors’ report do you expect will be issued; what does it mean?8. Indicate as an appendix to the report how the project team was organized and how it functioned on the project and submit appendix with Team Project.

Generally, which of the following audit procedures is the least expensive to perform?   A. Analytical procedures   B. Tests of details of balance   C. Substantive tests of transactions   D. Tests of controls   E. Risk assessment procedures

explain your answer and why other options are not correct also explain

Once risks are identified, auditors assess the risk of material misstatement at the _______ level for these significant classes of transactions and account balances.     A. disclosure   B. financial statement   C. relevant assertion level   D. account

Which is not a Risk Assessment Procedure? a. Ratio Analysis b. Observation of Activities c. Account Receivable confirmations d. Inspection of Documents e. Inquiry of Internal Auditors

Audit standards distinguish auditors’ responsibility for planning procedures for detecting noncompliance with laws and regulations havinga direct effect on financial statements versus planning procedures for detecting noncompliance with laws and regulations that do not have a direct effect on financial statements.Required:a. What are the requirements for auditors to plan procedures to detect direct-effect compliance versus indirect-effect compliance?b. For each of the following instances of noncompliance, explain why they are either directeffect (D) or indirect-effect (I) noncompliance:1. A manufacturer inflates expenses on its corporate tax return.2. A retailer pays men more than women for performing the same job. 3. A coal mining company fails to place proper ventilation in its mines.4. A military contractor inflates the overhead applied to a combat vehicle.5. An insurance company fails to maintain required reserves for losses.6. An exporter pays a bribe to a foreign government…

Tests of controls in a GAAS audit are required fora. Obtaining evidence about the financial statement assertions.b. Accomplishing control over the occurrence of recorded transactions.c. Applying analytical procedures to financial statement balances.d. Obtaining evidence about the operating effectiveness of client control activitie