Auditing and Assurance Services (16th Edition)
16th Edition
ISBN: 9780134065823
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Question
Chapter 2, Problem 13.3MCQ
To determine
Identify the general character of the responsibilities characterized by the Performance principles
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What is the general character of the responsibilities characterized by the Performanceprinciples?(1) The competence, independence, and professional care of persons performingthe audit.(2) Criteria for the content of the auditor’s report on financial statements andrelated footnote disclosures.(3) The criteria of audit planning and evidence gathering.(4) The need to maintain an independence in mental attitude in all matters pertaining to the audit.
Which of the following is most closely related to the responsibilities principle?a. The auditors’ responsibility to issue a report as a result of their examination.b. The requirement that auditors gather sufficient, appropriate evidence upon which to base an opinion on the financial statements.c. The auditors’ compliance with relevant ethical requirements of independence and due care.d. The auditors’ responsibility to plan the audit and properly supervise assistants.
b. The Responsibilities principle underlying AICPA auditing standards includes a
requirement that
(1) field work be adequately planned and supervised.
(2) the auditor's report state whether or not the financial statements conform to
generally accepted accounting principles.
(3) professional judgment be exercised by the auditor.
(4) informative disclosures in the financial statements be reasonably adequate.
c. What is the general character of the responsibilities characterized by the Performance
principles?
(1) The competence, independence, and professional care of persons performing
the audit.
(2) Criteria for the content of the auditor's report on financial statements and
related footnote disclosures.
(3) The criteria of audit planning and evidence gathering.
(4) The need to maintain an independence in mental attitude in all matters per-
taining to the audit.
2-17 (Objective 2-7) The following questions concern quality control standards. Choose
the best response.
a. The nature and…
Chapter 2 Solutions
Auditing and Assurance Services (16th Edition)
Ch. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 9RQCh. 2 - Prob. 10RQ
Ch. 2 - Prob. 11RQCh. 2 - State what is meant by the term peer review. What...Ch. 2 - Prob. 13.1MCQCh. 2 - Prob. 13.2MCQCh. 2 - Prob. 13.3MCQCh. 2 - Prob. 14.1MCQCh. 2 - Prob. 14.2MCQCh. 2 - Prob. 14.3MCQCh. 2 - Prob. 15.1MCQCh. 2 - Prob. 15.2MCQCh. 2 - Prob. 15.3MCQCh. 2 - Prob. 16DQPCh. 2 - Prob. 17DQPCh. 2 - Prob. 18DQPCh. 2 - Prob. 19DQPCh. 2 - Prob. 21DQP
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- In establishing the overall audit strategy, the auditor shall: 1. Identify the characteristics of the engagement that define its scope 2. Ascertain the nature, timing and extent of resources necessary to perform the engagement 3. Ascertain the reporting objective of the engagement to plan the timing of the audit and the naturé of the communication required 4. Consider the factors that, in the auditor's professional judgement are significant in directing the engagement team. 1, 2,3 and 4 3 only 1, 2 and 3 only 1 and 2 only Which one of the following fraudulent activity is an appropriate example for misappropriation of assets? Auditing and C EN 4 小 llarrow_forwardWhich of the following is the most important responsibility of the external auditor? a. To ensure that financial statements comply with applicable financial reporting framework b. To ensure compliance with laws and regulations applicable to the entity c. To design, implement and maintain a system of internal control d. To express an opinion on a true and fair view of the financial statementsarrow_forwardAuditors’ understanding of the internal control in an entity provides information fora. Determining whether members of the audit team have the required competence and capabilities to perform the audit.b. Ascertaining the independence in mental attitude of members of the audit team.c. Planning the professional development courses the audit staff needs to keep up to datewith new auditing standards.d. Planning the nature, timing, and extent of substantive procedures on an auditarrow_forward
- Which of the following aspects are required to be included in the basis for opinion section in the auditor's report? O a. Statement that an auditor is dependent of the entity in accordance with the relevant ethical requirements relating to an audit O b. Statement that the audit was conducted in accordance with Standards on Auditing OC. Statement that the financial statements have been audited O d. Statement whether the management (client) believes that the audit evidence an auditor has obtained is sufficient and appropriate to provide a basis for the auditor's opinionarrow_forwardIdentify which of the major fundamental principles (responsibilities, performance, or reporting) is most closely related to each of thefollowing:a. The need for auditors to consider their financial relationships with prospective clients.b. An auditor has raised some questions with respect to management’s response to various inquiries concerning pending litigation facing the client.c. The auditors’ consideration of the effectiveness of the entity’s internal control on the nature, timing, and extent of substantive procedures.d. The auditors’ evaluation of the magnitude of a misstatement that would impact perceptions of the entity’s profitability. e. The auditors’ issuance of a disclaimer of opinion because of a significant scope limitation.f. Relevant education and experience requirements for CPA licensure.g. The inability of an audit examination to provide absolute assurance with respect to detecting all material misstatements.h. The requirement that auditors possess the skills and…arrow_forwardThe evidence that is gathered by an auditor plays a crucial role in the results of the audit and therecommendations that are provided to management. There are TWO (2) attributes with regard to evidencethat an auditor will need to meet before concluding the audit. What are these attributes and why are theyimportant?arrow_forward
- Terms of auditing and duties and responsibilities of auditors are discussed through a. Letter of acceptance b. Offer letter c. Letter of appointment d. Engagement lettearrow_forwardIdentify the type of evidence the auditor would gather in assessing the integrity of management? What are the sources of each type of evidence?arrow_forwardIdentify how each of the following statements relates to the performance principle by considering which element(s) of the principle are related to that statement. (A statement may be related to more than one element.) Use the following elements in providing your response: Reasonable assurance • Planning and supervision • Materiality ⚫ Risk assessment • Audit evidence a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. b. Obtaining an understanding of the client's business and industry. c. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. d. Obtaining confirmations from the client's customers as to the ending balances in accounts receivable. e. Preparing a written audit plan. f. Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. g. Considering the likelihood that the account balance contains a material…arrow_forward
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