10. If materiality is $100,000 for the balance sheet and $15,000 for the income
ID: 2578629 • Letter: 1
Question
10. If materiality is $100,000 for the balance sheet and $15,000 for the income statement, which should be used at the financial statement level?
MULTIPLE CHOICE
a. $15,000
b. $100,000
c. $115,000
d. $85,000
14. What is the purpose of using analytical reviews during the planning stage of an audit?
MULTIPLE CHOICE
a. To test controls
b. to insure duties are segregated.
c. to identify unusual items for further investigation.
d. to insure the audit evidence supports the auditor’s conclusions regarding the financial statements.
16. A CPA's refusal to return client provided records is:
MULTIPLE CHOICE
a. Considered acceptable under the AICPA Code of Professional Conduct.
b. Permissible as a "mechanics" lien under the Uniform Commercial Code.
c. Considered discreditable to the profession
d. A violation of generally accepted auditing standards.
33. Which of the following is not considered a limitation of internal control?
MULTIPLE CHOICE
a. Misunderstanding instructions.
b. Not having an internal audit function.
c. Mistakes of judgment.
d. Carelessness, distraction and/or fatigue.
35. Which of the following is correct concerning evidence provided by specialists on audits?
MULTIPLE CHOICE
a. The use of a specialist is most likely to be appropriate when the auditor's independence is questioned.
b. The auditor must obtain an understanding of the methods used by the specialist to determine whether the findings are suitable to serve as corroborating evidence.
c. The specialist must be independent in fact and appearance.
d. A specialist should not be used to determine the market valuation of inventory.
37. A CPA would ordinarily not ultimately be liable to any party if they perform their services with:
MULTIPLE CHOICE
a. ordinary negligence
b. appropriate supervisory approvals
c. due professional care
d. properly trained personnel
45. An auditor would request a bank cutoff statement primarily in order to:
MULTIPLE CHOICE
a. verify the cash balance reported on the bank confirmation inquiry form.
b. verify reconciling items in the client’s bank reconciliation.
c. detect kiting
d. detect lapping.
51. Auditors are primarily concerned with internal controls that relate to:
MULTIPLE CHOICE
a. Financial statement assertions made by management.
b. Compliance with laws and regulations.
c. Generally accepted auditing standards.
d. Balance sheet accounts.
a. Considered acceptable under the AICPA Code of Professional Conduct.
b. Permissible as a "mechanics" lien under the Uniform Commercial Code.
c. Considered discreditable to the profession
d. A violation of generally accepted auditing standards.
Explanation / Answer
As per Chegg Policy, we can asnwer only 4 MCQ's at a time.
Ans 10 a. $15,000
Income Statement amount is to be considered material.
Ans 16 c. Considered discreditable to the profession
Ans 37 c. due professional care
Ans 45 b. verify reconciling items in the client’s bank reconciliation
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