Auditing & Attestation Mini Exam 5 — AUD — Auditing & Attestation Mini Exams

Questions in this quiz (10)

1. Upon identifying a significant risk in revenue recognition, what should the auditor do next?

   • Increase sample size only
   • Perform targeted audit procedures responsive to the risk
   • Rely on controls without testing
   • Issue a modified opinion

2. How do AICPA and PCAOB standards differ in application?

   • PCAOB applies to nonpublic entities only
   • AICPA applies only to public companies
   • PCAOB applies to public companies; AICPA to nonpublic entities
   • No difference exists

3. What is the auditor’s role regarding subsequent events?

   • Adjust financial statements for all events
   • Identify events requiring adjustment or disclosure
   • Disclose all events regardless of materiality
   • Ignore events after year-end

4. Which of the following is an example of a control activity?

   • Monitoring financial reporting
   • Risk assessment procedures
   • Authorization and approval of transactions
   • Information and communication systems

5. Which scenario most clearly impairs auditor independence?

   • Auditor communicates with management
   • Auditor performs bookkeeping services for the client
   • Auditor reviews prior audit documentation
   • Auditor performs analytical procedures

6. What is the purpose of audit sampling?

   • Eliminate audit risk entirely
   • Test all transactions in a population
   • Draw conclusions about a population based on a sample
   • Replace professional judgment

7. Which must be true for an unmodified opinion to be issued?

   • Financial statements contain no errors
   • Auditor obtains sufficient appropriate evidence
   • All controls are effective
   • No estimates are used

8. What is required to accept a compilation engagement?

   • Independence
   • Agreement with management on responsibilities
   • Substantive testing
   • Audit committee approval

9. What best distinguishes a review engagement from an audit?

   • Review provides reasonable assurance
   • Review involves detailed testing
   • Review involves inquiry and analytical procedures
   • Review results in an audit opinion

10. What must a PCAOB audit report include for public companies?

    • Critical audit matters
    • Auditor tenure
    • Reference to PCAOB standards
    • All of the above