Auditing & Attestation Mini Exam 7 — AUD — Auditing & Attestation Mini Exams

Questions in this quiz (10)

1. Which of the following would impair auditor independence?

   • Auditor reviews internal controls
   • Auditor prepares financial statements for the client
   • Auditor communicates with management
   • Auditor performs analytical procedures

2. What is the primary purpose of audit sampling?

   • Eliminate audit risk
   • Test all transactions
   • Draw conclusions about a population
   • Replace professional judgment

3. Which must be true for an unmodified audit opinion?

   • No material misstatements exist
   • Sufficient appropriate evidence is obtained
   • Financial statements follow GAAP
   • All of the above

4. What is required to accept a compilation engagement?

   • Independence
   • Agreement with management
   • Internal control testing
   • Audit procedures

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

   • Review provides reasonable assurance
   • Review uses inquiry and analytical procedures
   • Review includes substantive testing
   • Review results in an audit opinion

6. What must a PCAOB audit report include?

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

7. Which is part of internal control over financial reporting?

   • Control environment
   • Risk assessment
   • Monitoring
   • All of the above

8. Which is NOT an audit procedure?

   • Inspection
   • Confirmation
   • Reperformance
   • Assumption

9. When auditing litigation, what is the primary concern?

   • Auditor independence
   • Client reputation
   • Contingent liabilities
   • Fee structure

10. Which of the following best describes detection risk?

    • The risk that internal controls will not prevent misstatements
    • The risk that audit procedures will fail to detect a material misstatement
    • The risk that financial statements are misstated before audit procedures
    • The risk that management overrides controls