1. Which portion of the audit is least likely to be completed before the balance sheet date?...
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Question:
1. Which portion of the audit is least likely to be completed before the balance sheet date?
- Tests of controls.
- Issuance of the engagement letter.
- Substantive procedures.
- Assessment of control risk.
2. Successor auditors should make inquiries to the predecessor auditors regarding:
- The integrity of management.
- Disagreements with management over accounting, auditing, or similarly significant matters.
- The predecessor auditors' understanding about the reasons for the change of auditors.
- All of the above.
3. Individuals who commit fraud are ordinarily able to rationalize the act and also have an:
- Incentive and opportunity.
- Incentive but no opportunity.
- Opportunity but no incentive.
- Neither opportunity nor incentive
4. If the economy is experiencing a recession, an auditor should focus increased attention on which of the following accounts?
- Purchase returns and allowances.
- Allowance for doubtful accounts.
- Common stock.
- Noncontrolling interest of a subsidiary purchased during the year.
5. Which one of the following risk factors is best described as opportunities:
- High vulnerability to rapid changes, such as changes in technology, product obsolescence, or interest rates.
- Operating losses making the threat of bankruptcy, foreclosure, or hostile takeover imminent.
- Significant related party transactions not in the ordinary course of business or with related entities not audited or audited by another firm.
- Rapid growth or unusual profitability especially compared to that of other companies in the same industry.
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
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