1. Select possible reason(s) for an audit failure.

Inadequate internal accounting and control systems. An accounting and internal control system that fails to pick up incorrect or fraudulent transactions can be the root cause of financial scandals and audit failures

Existing disclosure rules have loopholes and some questionable financial practices are not disclosed

Auditors can be the source of the problem.

2. Auditors use statistical sampling to check transactions and the records linked with these transactions. Auditors can expand the sample if significant errors are found; doing so can expand the reliability of the conclusions drawn.

Group of answer choices

True

False

3.

Because auditors assess the internal controls of the organization, audited financial statements signify that fraud within the organization is not a concern. Explain your answer.

Group of answer choices

True

False

4.

The detection of fraud and embezzlement is the primary purpose of audits. Explain your answer.

Group of answer choices

True

False

5.

An unqualified opinion means there are major areas of concern.

Group of answer choices

True

False

6.

An adverse opinion means that the financial statements are not presented in accordance with GAAP.

Group of answer choices

True

False

7.

A qualified opinion means that the auditor believes the financial statements are a fair representation of the organization's financial status.

Group of answer choices

True

False

8.

Does this equation describe the periodic inventory system:

Ending Inventory = Beginning Inventory + Units Purchased Units Sold

Group of answer choices

True

False

9.

Specific identification assumes the oldest inventory is used before newer inventory.

Group of answer choices

True

False

10.

The weighted average assumes inventory is commingled and value is based on mean costs.

Group of answer choices

True

False

11.

First-in-first out (FIFO) is where inventory is matched with items of inventory with its specific cost.

Group of answer choices

True

False

12.

Last-in-first-out (LIFO) assumes that newest inventory is used prior to previously acquired inventory.

Group of answer choices

True

False