MULTIPLE CHOICE $-70$ POINTS EXAM $1$ Fall $2024$ Name Ae$+$ Prifie Read each question carefully and record the BEST answer on the Excel Answer Sheet. $1.$ Which of the following types of services is generally provided only by CPA firmer A$.$ Tax audits. B$.$ Financial statement audits. C$.$ Compliance audits. D$.$ Operational audits. $2.$ If planned detection risk is reduced, the amount of evidence the auditor accumulates will: a$.$ increase. b$.$ decrease. c$.$ remain unchanged. d$.$ be indeterminate. $3.$ Operational auditing is primarily oriented toward: A$.$ Future improvements to accomplish the goals of management. B$.$ The accuracy of data reflected in management's financial records. C$.$ The verification that a company's financial statements are fairly presented. D$.$ Past protection provided by existing internal control. $4.$ The Financial Accounting Standards Board employs a "due process" system which a$.$ is an efficient system for collecting dues from members. b$.$ enables interested parties to express their views on issues under consideration. c$.$ identifies the accounting issues that are the most important. d$.$ requires that all accountants must receive a copy of financial standards. $5.$ The auditor faces a risk that the audit will not detect material misstatements in the financial statements. In regard to minimizing this risk, the auditor primarily relies on: a$.$ Substantive procedures b$.$ Tests of controls C$.$ Internal control d$.$ Statistical analysis. $6.$ An audit of the financial statements of a company is referred to as a$($n$)$: A$)$ Financial audit. B$)$ Compliance audit. C$)$ Operational audit. D$)$ Integrated financial audit. $7.$ The auditors of Smith Electronics wish to limit the audit risk of material misstatement in the test of cash to $10$ They believe that inherent risk is $100\%,$ and there is a $50\%$ risk that material misstatement could have by client's system of internal control. What is the maximum detection risk the auditors should specify in their procedures of details of cash? c$.20\%$ a$.10\%.$ b$.12\mathrm{.}5\%.$ d$.50\%$