Which of the following matters relating to an entity’s operations would an auditor most likely consider as an inherent risk factor in planning an audit?a. The entity’s fiscal year ends on June 30.b. The entity enters into significant derivative transactions as hedges.c. The entity’s financial statements are generated at an outside service center.d. The entity’s financial data is available only in computer-readable form.

During an audit of an entity’s stockholders’ equity accounts, the auditor determines whether there are restrictions on retained earnings resulting from loans, agreements, or state law. This audit procedure most likely is intended to verify management’s assertion ofa. Existence or occurrence.b. Completeness.c. Valuation or allocation.d. Presentation and disclosure.

Which of the following may not be included in a typical audit program for auditing Retained Earnings? a. Reference to market quotations for the granting of share options to employees. b. Reference to fair market value of real property declared as property dividends. c. Determination of the effect of a change in policy regarding the use of average cost formula for inventories for the current year, where the entity previously elected the first-in-first-out cost formula.   d. Reference to market quotations for the declaration of a 10% stock dividends.

Which required SEC filing would contain the following content?    "Our auditors identified the following critical audit matter:  Significant judgment may be required by the Company in determining revenue recognition for these customer agreements.   a)  8-K   b)  Proxy   c)  10-K

Which of the following auditing procedures probably would provide the most reliable evidence concerning the entity’s assertion of rights and obligations related to inventories?a. Trace test counts noted during the entity’s physical count to the entity’s summarization of quantities.b. Inspect agreements to determine whether any inventory is pledged as collateral or subject to any liens. c. Select the last few shipping documents used before the physical count and determine whether the shipments were recorded as sales.d. Inspect the open purchase order file for significant commitments that should be considered for disclosure.

Dog

PSA 570 (Going Concern) states that a fundamental principle in the preparation of financial statements is the going concern assumption. Under this assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws and regulations. The responsibility to make an assessment of an entity's ability to continue as a going concern rests with the     Auditor Entity's management SEC Entity's creditors

Based on the reading, (The Auditor’s Consideration of an Entity's Ability to Continue as a Going Concern) analyze the auditor’s responsibility to determine whether a company can continue as a going concern. From your analysis, propose at least two key factors auditors need to consider when determining an entity’s ability to continue as a going concern. Provide your rationale.

The primary purpose for obtaining an understanding of the entity’s environment (including its internal control) in a financial statement audit isa. To determine the nature, timing, and extent of substantive procedures to be performed.b. To make consulting suggestions to the entity’s management.c. To obtain direct sufficient appropriate audit evidence to afford a reasonable basis for an opinion on the financial statements.d. To determine whether the entity has changed any accounting principles

An auditor issues an audit report that expresses three opinions. Which of the following is not one of those opinions?   Question 23 options:   a)  whether management’s assessment of the company’s internal control over its financial reporting is appropriate   b)  whether management’s assessment that the financial statements are based upon the proper use of GAAP   c)  whether the company maintained effective internal control over its financial reporting   d)  whether the company’s financial statements present fairly the results of operations and cash flows in conformity with GAAP

In which of the following circumstances does not require auditors to modify the content of the standard report on the entity's financial statements? The auditors reference component auditors O who examined a subsidiary of group financial statements.

s1: In the absence of significant information to the contrary, an entity is viewed as continuing in operation.    S2: If after evaluating management's plans, the auditor concludes that questions about the entity's continued existence are not resolved, he or she should determine whether adequate disclosures are made in the financial statements.   a. BOTH STATEMENTS ARE TRUE b. BOTH STATEMENTS ARE FALSE c. ONLY S1 IS TRUE d. ONLY S2 IS TRUE

Question 25 Which of the following is not included in the standard unmodified report on financial statements.     An identification  of the financial statements that were audited.     A general description of the audit.     An opinion that the financial statements present fairly the financial position of the company in accordance with GAAP.     An emphasis-matter-paragraph commenting on the effect of economic conditions on the entity.

The auditors include an emphasis-of-matter paragraph in an otherwise unmodified report on the entity's financial statements to emphasize that the entity being reported on had significant transactions with related parties. The inclusifis considered a qualification of the opinion.on of this separate paragraph