AUDITING+ASSURANCE 12MONTH ACCESS CARD
17th Edition
ISBN: 9780135635131
Author: ARENS
Publisher: WILEY
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Question
Chapter 8, Problem 26.1MCQ
To determine
Identify the circumstances under which an auditor of an issuer would be least likely to reevaluate established materiality levels.
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Students have asked these similar questions
If the auditor verifies a debtor’s account balance, which is comprised of a number of transactions, at the end of the financial period by sending a debtor’s confirmation request, this is an example of a
Select one:
A.
substantive test of transactions
B.
test of controls
C.
substantive analytical procedure
D.
substantive test of balances
Before issuing a report on the compilation of
financial statements of a non-public entity,
the accountant should:
a. Apply analytical procedures to selected
financial data to discover any material
misstatements.
b. Corroborate at least a sample of the
assertions management has embodied in the
financial
statements.
c. Inquire of the client's personnel whether
the financial statements omit substantially all
disclosures.
d. Read the financial statements to consider
whether the financial statements are free
from obvious material errors.
Which of the following statements would most likely appear in an auditor's engagement letter?
a.
Fees for our services are based on our regular per diem rates, plus travel and other out-of-pocket expenses.
b.
The auditor's preliminary assessment of the risk factors relating to misstatements arising from fraudulent financial reporting.
c.
A reminder that management is responsible for illegal acts committed by employees.
d.
After performing our preliminary analytical procedures, we will discuss with you the other procedures we consider necessary to complete the engagement.
e.
Required evidence is needed to issue a qualified opinion.
Chapter 8 Solutions
AUDITING+ASSURANCE 12MONTH ACCESS CARD
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQCh. 8 - Prob. 11RQ
Ch. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Your client, Harper Company, has a contractual...Ch. 8 - Prob. 15RQCh. 8 - Prob. 16RQCh. 8 - Prob. 17RQCh. 8 - Prob. 18RQCh. 8 - Prob. 19RQCh. 8 - Prob. 20RQCh. 8 - Prob. 21RQCh. 8 - Prob. 22RQCh. 8 - Prob. 23.1MCQCh. 8 - Prob. 23.2MCQCh. 8 - Prob. 23.3MCQCh. 8 - Prob. 24.1MCQCh. 8 - Prob. 24.2MCQCh. 8 - Prob. 24.3MCQCh. 8 - Which one of the following statements is correct...Ch. 8 - Prob. 25.2MCQCh. 8 - Prob. 25.3MCQCh. 8 - Prob. 26.1MCQCh. 8 - Prob. 26.2MCQCh. 8 - Prob. 26.3MCQCh. 8 - Prob. 27DQPCh. 8 - Prob. 28DQPCh. 8 - Prob. 32DQPCh. 8 - Prob. 33DQPCh. 8 - Prob. 34DQPCh. 8 - Prob. 35DQP
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- The primary reason auditors request responses to attorney letters is to provide auditorsa. The probable outcome of asserted claims and pending or threatened litigation.b. Corroboration of the information furnished by management about litigation, claims, and assessments.c. The attorney’s opinions of the client’s historical experiences in recent similar litigation.d. A description and evaluation of litigation, claims, and assessments that existed at the date of the financial statements.arrow_forwardSmith CPAs have requested that an audit client add a note disclosure to the financial statements related to their ability to operate as a going concern. The client has refused to do so; citing differences in opinion on some key loans that they believe will be refinanced. What should the auditors do at this point? The auditors should request a meeting with the client's board of directors, and discuss the issue with them. The auditors should consider modifying the opinion for a material departure. The auditors should consider disclaiming an opinion on the financial statements to preserve the reputation of the firm. The auditors should consider issuing a scope limitation, on the basis that management is not willing to make the necessary amendment.arrow_forwardThe main portion of an independent auditor’s work in expressing an opinion on financial statements consists of a. Obtaining and examining sufficient appropriate evidence b. Examining compliance with tax laws c. Studying and evaluating internal control d. Comparing client’s total accountabilities with its actual assets as of the end of the reporting periodarrow_forward
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- After the audit report release date, auditors determine that an important auditing procedure was omitted. Which of the following initial courses of action is most appropriate?a. Perform the omitted procedure or an alternative procedure.b. Notify the board of directors and regulatory agencies that are currently relying on auditor’s reports.c. Determine whether the omitted procedure is important in supporting the auditor’s opinion on the entity’s financial statements.d. Engage another public accounting firm to conduct a quality assurance review.arrow_forwardAn auditor must identify the relevant assertions about each significant financial statement account and disclosure and then gather evidence to conclude whether a material misstatement exists for each assertion. The nature of each financial statement account and disclosure contributes to the likelihood that a material misstatement exists.a. In general, which accounts are most susceptible to overstatement? To understatement?b. Why do you think a company could permit asset accounts to be understated?c. Why do you think a company could permit liability accounts to be overstated?d. Which direction of misstatement is most likely: income overstatement or income understatement?arrow_forwardWhich of the following would not be considered confidential information obtained in thecourse of an engagement for which the client’s consent would be needed for disclosure?a. Information about whether a consulting client has paid the CPA’s fees on time.b. The actuarial assumptions used by a tax client in calculating pension expense.c. Management’s strategic plan for next year’s labor negotiations.d. Information about material contingent liabilities relevant for audited financial statementsarrow_forward
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