ACC 491 Final Exam

ACC 491
Final Exam

1) If reported sales for 2010 erroneously include sales that occur
in 2011, the assertion violated on the 2010 statements would be

2) The rights and obligations assertion applies to

3) Which of the following assertions is NOT made by management in
placing an item in the financial statements?

4) Section 11 of the Securities Act of 1933 uses the term material
fact to limit the amount of information required. Under the Act, the standard
used to determine an item’s materiality

5) Individuals or entities the auditor knew or should have known
and would rely on the audit report in making business and investment decisions
are

6) Section 18 liability is relatively narrow in scope because it
relates to a false or misleading statement in documents filed with the

7) Within generally accepted auditing standards, general standards
relate primarily to

8) Statements on auditing standards (SAS) are interpretations of
what?

9) Which of the following best describes the relationship that
should exist between the external auditor and the management of the client
company?

10) Statement on Quality Control Standards No. 2 identifies
certain quality control elements that should be considered when performing
which types of services?

11) Internal auditors are primarily involved with

12) The Government Accounting Office reports directly to the

13) With respect to audit objectives, the term validity relates to
which of the assertions below?

14) Which of the following procedures consists of seeking
information from knowledgeable persons throughout or outside the entity?
15) Specific audit objectives are normally

16) The assessment of inherent risk requires considering matters
that have a pervasive effect on assertions for all or many accounts and matters
that may pertain only to assertions for specific accounts. Which of the
following is an example of a pervasive effects matter?

17) The assessment of inherent risk requires considering matters
that have a pervasive effect on assertions for all or many accounts and matters
that may pertain only to assertions for specific accounts. Which of the
following is an example of a specific account matter?

18) The risk that the auditor may unknowingly fail to
appropriately modify his or her opinion on financial statements that are
materially misstated is

19) In accepting an engagement, an auditor takes on professional
responsibilities to

20) In communicating with the previous auditor, the potential
successor should make specific and reasonable inquiries regarding matters that
may affect the decision to accept the engagement. Which of the following items
is least likely to be included in the inquiries?

21) The importance of the accept/reject decision for a particular
client is reflected in the inclusion of acceptance and continuation of clients
as

22) In making preliminary judgments about materiality, the auditor
initially determines the aggregate level of materiality for each statement. For
planning purposes, the auditor should use the

23) Professional standards recognize that a misstatement that is
quantitatively immaterial may be qualitatively material. In regards to these
items, professional standards require the auditor to

24) When setting the level of materiality on a particular
engagement, the auditor must consider

25) The Committee of Sponsoring Organizations (COSO) report
identified five interrelated components of internal control. Since then, a sixth
category has been identified, which is

26) Which of the following is NOT one of the interrelated
components of internal controls identified by the COSO report?

27) Which of the following is NOT one of the fundamental concepts
in the COSO report’s definition of internal control?

28) Which of the following necessary controls would address a
potential misstatement arising from a voucher being paid twice?

29) The nature of tests of controls relates to the type of
evidence obtained. Which of the following is NOT an example of a type of
evidence relevant to tests of controls?

30) Which of the following is one of the four basic functions of
every transaction?

31) To emphasize the importance of integrity and ethical values
among all personnel or an organization, the chief executive officer and other
top managers should do all of the following EXCEPT

32) Which of the following is NOT one of the factors that make up
the control environment?

33) An effective accounting system should identify and record only
the valid transaction of the entity that occurred in the current period, which
relates to the

34) Who is responsible for establishing the process and controls
for preparing accounting estimates?

35) An inaccurate form of the audit risk model would show that

36) Revising the planned level of detection risk will be necessary
whenever

37) PPS sampling would most likely NOT be cost-effective in

38) Which of the following is NOT an advantage of PPS sampling?

39) PPS sampling should NOT be used when

40) Which of the following is NOT a hardware and systems software
control?

41) Which of the following is NOT recognized as a type of general
controls?

42) Which of the following management responsibilities is NOT
established under PCAOB standards?