Could you answer these multiples below

1.A client sells expensive flat screen televisions. The client has limited security and performs only annual inventory counts. Which of the following is true?

-the auditor will likely assess inherent risk as low

-the risk of material misstatement will likely be assessed as low

-a combined audit strategy will likely be chosen

-the auditor will likely assess control risk as high

2.Which of the following key performance indicators (KPIs) would likely be the most important for an entity in the finance industry?

-inventory margins

-risk-weighted assets

-revenue per customer

-inventory turnover

3.Which of the following is an example of a liquidity ratio?

-cost of sales divided by average inventory

-total liabilities divided by total assets

-gross profit divided by net sales

-profit divided by average assets

4.If an entity's earnings per share (EPS) ratio or price-earnings (PE) ratio is declining, auditors will likely consider the possibility that

-shareholders will be looking to invest more money into the company.

-management may be under pressure to manipulate earnings in order to increase earnings.

-the entity will sell off redundant assets to improve profitability.

-management may be under pressure to manipulate earnings in order to decrease earnings.

5.Zain Hakim's client does not have in place appropriate controls for a risk he has identified. What should Zain do?

-conduct few or no tests of controls

-report the weaknesses to those charged with governance

-increase his reliance on substantive tests

-all of the answers are correct

6.An entity has a bank loan with a debt covenant stating that the current asset ratio must be more than 1.5:1. This circumstance will directly impact

-performance materiality.

-specific materiality.

-the basis for determining materiality.

-overall materiality.

7.Analytical procedures involve identifying fluctuations in accounts. For example, if an auditor is aware that the client has issued a significant amount of equity in the previous financial year, the auditor would expect the debt to equity ratio to

-remain unchanged.

-double.

-increase.

-decrease.

8.A client engages in numerous foreign exchange transactions and the auditor considers that there is a risk these transactions are incorrectly stated. During the assessment, the auditor also determines that the internal controls in place help mitigate the possibility that transactions are valued incorrectly. How will the auditor assess inherent and control risk?

-inherent risk as low and control risk as low

-inherent risk as low and control risk as high

-inherent risk as high and control risk as low

-inherent risk as high and control risk as high

9.If there is a risk that management's assertion that recorded inventory exists is not valid, the auditor will

-spend more time testing for the existence of recorded inventory.

-spend more time testing for the completeness of inventory.

-spend less time testing for the existence of recorded inventory.

-not adjust their audit strategy.

10.Moises Alou has reviewed internal controls at a spring training facility in Florida and has deemed control risk to be high. Which kind of audit strategy may be appropriate for Moises?

-combined audit strategy

-substantive audit strategy

-combined audit strategy and substantive audit strategy

-none of the above

11.T. Smith, CPA, is auditing JKJ Jewelry Inc. JKJ Jewelry sells mostly low value cosmetic jewelry. A large amount of inventory would need to be stolen to make a material impact on the financial statements. JKJ requires employees to perform daily inventory counts to ensure all jewelry is accounted for. Which of the following is true? Select all that apply.

-the auditor will likely assess control risk as high

-a substantive audit strategy will likely be chosen

-the auditor will follow a combined audit strategy

-the auditor will likely assess inherent risk as low

-the risk of material misstatement will likely be assessed as low

12. If a client sells valuable goods, inventory is more likely to be stolen. This causes the auditor to consider the risk that inventory is overstated but still recorded on the books. In this circumstance, the auditor will assess inherent risk at the inventory account balance level as

-low.

-high.

-non-existent.

-moderate to low.

13.By assessing control risk as high, an auditor has determined that their client's system of internal controls

-is very strong.

-will eliminate the possibility of material fraud or error.

-is very effective at preventing or detecting material misstatements.

-is unlikely to be effective in mitigating inherent risks identified.

14.If the auditor determines an acceptable audit risk is .05%, and assesses the inherent and control risks both as high, what may the detection risk be set at?

-50%

-0.05%

-0.0005%

-10%

15.An auditor determines overall materiality is $54,000. What amount is likely to be set as performance materiality?

-$35,000

-$52,000

-$15,000

-$63,000

16.If a client's inventory turnover ratio falls sharply in comparison to past years, the auditor may be concerned that inventory

-is undervalued.

-is overvalued.

-is not complete.

-is not disclosed properly on the financial statements.

17.T. Smith, CPA, is auditing JKJ Jewelry Inc. JKJ Jewelry sells mostly low value cosmetic jewelry. A large amount of inventory would need to be stolen to make a material impact on the financial statements. JKJ requires employees to perform daily inventory counts to ensure all jewelry is accounted for. Which of the following is true?

-the risk of material misstatement will likely be assessed as low

-the auditor will likely assess control risk as high

-the auditor will likely assess inherent risk as high

-a substantive audit strategy will likely be chosen

18. Keith Fiorino, a manager at Cox, Durham, & Elliott, CPA's was given the mandate to deal with the following risks: fraud risks, complex transactions, and significant related party transactions. How would you classify these risks?

-significant risk

-control risk

-inherent risk

-audit risk

19.Which of the following would most likely be the most appropriate basis for determining materiality in a non-profit organization?

-gross profit

-total assets

-total liabilities

-net income before tax

20. What is the purpose of the auditor performing analytical procedures during the risk assessment phase?

-assist in the client acceptance decision

-calculate the amount of material misstatement in a specific account balance

-assist in the risk identification process

-assess the accuracy of the financial statements