1- The expectation gap is best described as the difference between the expectations of assurance providers and

financial statement users.

accountants.

government.

financial institutions.

2-When professional accountants allow their clients to issue incorrect financial information, they are violating the ethical principle of

professional behaviour.

integrity and due care.

professional competence.

objectivity.

3- Keith Frost, CPA, is feeling an extreme amount of pressure from his client, Shel Incorporated, to reduce audit fees substantially this year. What type of independence threat might this be?

self-interest threat

advocacy threat

intimidation threat

familiarity threat

4- To validate information obtained from the client, the auditor must obtain

collaborative evidence.

collateral evidence.

convincing evidence.

corroborative evidence.

5- Which of the following is true when the auditor determines the client has a low risk of material misstatement?

increased reliance on testing of controls

inherent risk is assessed as high

increased reliance on substantive tests of transactions and account balances

detection risk is assessed as low

6- The risk that an auditor issues a clean opinion when the financial statements are materially misstated is called

audit risk.

control risk.

inherent risk.

detection risk.

7- Which of the following is the least persuasive type of evidence?

supplier statement

bank confirmation

purchase orders

tax assessment

8-

Invoices, bank statements, and minutes of meetings are all examples of

computational evidence.

physical evidence.

verbal evidence.

documentary evidence.

9- What is the risk that the auditors testing procedures will not be effective in finding a material misstatement?

inherent risk

control risk

detection risk

audit risk

10 -When auditors conclude that the financial statements contain a material, but not pervasive misstatement, they will issue a(n)

adverse opinion.

clean opinion.

disclaimer of opinion.

qualified opinion.