10 terms

test

STUDY
PLAY
Audit committees should be made up of the most qualified directors regardless of whether they are part of management of the company.
False
LO: 06-02
Topic: Obtaining Clients
Bloom's: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: Medium
2. Analytical procedures are seldom used during the risk assessment stage of an audit engagement because they are substantive procedures.
False
LO: 06-04
Topic: Understanding Client and Environment
Bloom's: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Risk Analysis
Difficulty: Easy
3. Preliminary arrangements with clients should be set forth in the management letter.
False
LO: 06-03
Topic: Planning the Audit
Bloom's: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: Easy
4. An audit plan includes a detailed listing of the audit procedures to be performed in the verification of items in the financial statements.
False
LO: 06-03
Topic: Planning the Audit
Bloom's: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: Medium
5. The auditors' tests of controls are designed to substantiate the fairness of specific financial statement accounts.
False
LO: 06-01
Topic: Audit Process
Bloom's: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: Medium
6. At least a portion of the auditors' consideration of internal control usually is performed at an interim date rather than at the balance sheet date.
True
LO: 06-07
Topic: Assessing Risks and Designing Audit Procedures
Bloom's: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: Medium
7. The substantive approach to an audit is appropriate for many small businesses.
True
LO: 06-08
Topic: Audit Program
Bloom's: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: Medium
8. Confirming a bank account establishes existence but not rights to the cash balance.
False
LO: 06-08
Topic: Audit Program
Bloom's: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: Hard
9. The completeness of recording of assets is generally verified by tracing from the source documents to the recorded entry.
True
LO: 06-08
Topic: Audit Program
Bloom's: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: Hard
10. Vouching the acquisition of assets is an audit procedure that is often performed to establish the valuation of the assets.
True
LO: 06-07
Topic: Assessing Risks and Designing Audit Procedures
Bloom's: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: Hard