Aud Theo

An operational audit is designed to * a. Assess the efficiency and O effectiveness of management's operating procedures b Assess the presentation of management's financial statements in accordance with generally accepted accounting principles. c. Determine whether management O has complied with applicable laws and regulations d. Determine whether the audit committee of the board of directors is effectively discharging its responsibility to oversee management's operations.The competence of evidence available to an auditor is least likely to be affected by a. The relevance of such evidence to O the financial statement assertion being investigated b. The relationship of the preparer of O such evidence to the entity being audited. O c. The timeliness of such audit evidence. d. The sampling method employed O by the auditor to obtain a sample of such evidence.In pursuing its quality control objectives with respect to assigning personnel to engagements, a public accounting firm may use policies and procedures such as * a. Rotating employees from O assignment to assignment on a random basis to aid in the staff training effort. b. Requiring timely identification of the staffing requirements of specific O engagements so that enough qualified personnel can be made available c. Allowing staff to select the O assignments of their choice to promote better client relationships. d. Assigning a number of employees to each engagement in excess of O the number required so as not to overburden the staff and interfere with the quality of the audit work performedAn auditor's overall objective in a financial statement audit is to * a. Determine that all individual O accounts and footnotes are fairly presented O b. Employ the audit risk model c. Express an opinion on the fair presentation of the financial O statements in accordance with generally accepted accounting principles. O d. Detect all errors and fraud.Why does an auditor document audit evidence? O a To comply with the requirements of gathering all available evidence b. To provide client reference for all O account balances and correcting entries c. To support audit opinion and to O provide evidence that the audit was carried out in accordance with PSA. d. To document all records of O misstatements noted in the financial statementsThe scope statement of an audit report should A Describe the audit objectives and O tell the reader why the audit was conducted.) B Identify the audited activities and O describe the nature and extent of auditing performed C. Define the standards, measures, O or expectations used in evaluating audit findings. D. Communicate the internal auditor's evaluation of the effect of O the findings on the activities reviewedWhen an independent auditor is approached to perform an audit for the first time, he or she should make inquiries of the predecessor auditor. Inquiries are necessary because the predecessor may be able to provide the successor with information that will assist the successor in determining whether * O a The predecessor's work should be used O b. The company rotates auditors. O c. In the predecessor's opinion, control risk is low d. The engagement should be accepted.Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's a Opinion of any subsequent events O occurring since the predecessor's audit report was issued O b. Understanding as to the reasons for the change of auditors. C. Awareness of the consistency in O the application of GAAP between periods. d. Evaluation of all matters of continuing accounting significance.Which of the following is not a component of assurance engagement risk? O a. Control risk O b. Inherent risk O c. Business risk O d. Detection riskWhich of the following factors affect the form, content and extent of audit documentation: I. The nature and extent of exceptions identified II. Checklist III. The identified risks of material misstatement IV. Correspondence with Chief Finance Officer V. The audit methodology and tools used VI. The significance of the audit evidence obtained O A. I, II, III, IV, V. VI O B. I, III, IV, V, VI C. I, III, V, VI O D. I, II, III, IV