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Corresponds to CLO 7 (b)
The auditor issues a qualified opinion when
the auditor has sufficient appropriate audit evidence and concludes that the misstatements to the financial statements are material, but not pervasive
the auditor is unable to obtain sufficient appropriate evidence, but the auditor concludes that the possible effects of the misstatement could be both material and pervasive
the auditor is unable to obtain sufficient appropriate evidence, but the auditor concludes that the possible effects of the misstatement could be material, but not pervasive
the auditor has reasonable evidence to determine that the financial statements are not free from material misstatement
the auditor has sufficient evidence to determine that the financial statements are not free from material misstatement
both A and C
both B and E
both D and E
Question 2
Corresponds to CLO 2(c)
The population for a substantive test of details consists of
all events in the accounts or class of transactions
all material items in the accounts or class of transactions
all material events in the accounts or class of transactions
all items in the accounts at the end of the year
all transactions in the class of transactions for the entire year
both A and B
both C and D
both D and E
Question 3
Corresponds to CLO 9 (d)
Which of the following is a defense that an auditor might use to defend himself against client lawsuits?
lack of duty
non-negligent connection
lack of damages
contributory negligence
absence of causal performance
both A and D
both B and E
both C and E
Question 4
Corresponds to CLO 9 (a)
Which of the following are principles that establish the basic framework for the professional code of conduct in the U.S.?
responsibility
reliability
relevance
proficiency
due care
both A and E
both B and C
both D and E
Question 5
Corresponds to CLO 4 (b)
Which of the following are management assertions about the accounts in long-term debt and owner's equity process?
existence or occurrence - for both classes of transactions and account balances
completeness - for classes of transactions
valuation and allocation - for account balances
rights and obligations - for both classes of transactions and account balances
accuracy - for account balances
both A and C
both C and E
both D and E
Question 6
Corresponds to CLO 7 (d)
When the auditor issues a qualified or adverse opinion, the auditor
changes the description of the auditor's procedures to state that the auditor believes that the audit evidence the auditor obtained is sufficient and appropriate to provide a basis for the auditor's modified opinion
changes the description of the auditor's responsibility to state that the auditor believes that the audit evidence the auditor obtained is sufficient and appropriate to provide a basis for the auditor's modified opinion
changes only the opinion paragraph and adds a modification paragraph
changes the opinion and introductory paragraphs
Question 7
Corresponds to CLO 7 (d)
When the auditor issues an adverse opinion, the auditor should state in the opinion paragraph, that
in the auditor's opinion, because of the significance of the matter described in the basis for adverse opinion paragraph, the financial statements are not presented fairly in accordance with the applicable reporting framework
because of the significance of the matter described in the basis for adverse opinion paragraph, the auditor has not been able to obtain sufficient appropriate evidence to provide a basis for an audit opinion, and accordingly, the auditor does not express an opinion on the financial statements
except for the effects of the matter described in the basis for modification paragraph, the financial statements are presented fairly, in all material respects, in accordance with the applicable reporting framework
the financial statements are presented fairly, in all material respects, in accordance with the applicable reporting framework
Question 8
Corresponds to CLO 1(d)
When controls "work"
the auditor increases the amount of substantive testing
the auditor reduces the amount of substantive testing
the auditor increases the amount of substantive testing over what would have been done if the control had been effective in preventing or detecting misstatements in the financial statements
the auditor decreases the amount of substantive testing over what would have been done if the control had been effective in preventing or detecting misstatements in the financial statements
the auditor reduces the amount of substantive testing over what would have been done if the control had not been effective in preventing or detecting misstatements in the financial statements
Question 9
Corresponds to CLO 4 (d)
The auditor uses substantive tests of transactions in the long-term debt and owner's equity business process to
test the reliability of transactions during the year
test the reliability of balances at the end of the year
test the recording of balances at the end of the year
test the recording of transactions during the year
Question 10
Corresponds to CLO 5 (d)
From the auditor's point of view, the problem with related party transactions is that
related party transactions may not have oversight in accordance with the applicable reporting framework
related party transactions may not have been classified in accordance with the applicable reporting framework
related party transactions may not have been occurred in accordance with the applicable reporting framework
related party transactions may not have been recorded in accordance with the applicable reporting framework
Question 11
Corresponds to CLO 5 (c)
The requirements for Type I and Type II subsequent events are
Type I events are disclosed in the financial statements
Type II events are disclosed in the financial statements
neither Type I nor Type II events are recorded in the financial statements
Type II events are recorded in the financial statements
Type I events are recorded in the financial statements
both A and B
both B and E
both C and D
Question 12
Corresponds to CLO 5 (c)
Normally, the auditor's work does not extend into the following year. However, the auditing standards require the auditor to consider certain events that occur in the year following the year under audit and determine if any of these events require
disclosure in the financial records for the year under audit
adjustment to the financial statements under audit
disclosure in the prior financial statements
adjustment to the financial records for the year under audit
disclosure in the financial statements under audit
both A and B
both B and E
both C and D
Question 13
Corresponds to CLO 5 (b)
When a contingent liability exists, the likelihood for loss can be evaluated as probable, reasonably possible, or remote. A remote loss is
a loss where the chance of occurrence is slight
a loss that is likely to occur
a loss where the chance of occurrence is moderate
falls between the chance of occurrence is slight and a loss is likely to occur
Question 14
Corresponds to CLO 8 (d)
The auditor must evaluate whether the financial statements are consistent with the requirements of the applicable financial reporting framework for which of the following items?
the financial statements adequately disclose the significant accounting policies used
the accounting policies selected are consistent with management's policies
the accounting estimates made by management are reasonable
the information presented in the accounting records is relevant, reliable, comparable, and understandable
the financial forecasts made by management are accurate
both A and C
both C and E
both D and E
Question 15
Corresponds to CLO 6 (c)
Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?
net liability positions y
positive operating cash flows n
ability to pay creditors on due dates
change from cash-on-delivery to credit transactions with suppliers
loss of key management without replacement
both A and E
both B and C
both D and E
Question 16
Corresponds to CLO 6 (d)
The auditing standards have listed several circumstances that might cause quantitatively immaterial misstatements to be judged material. These include
misstatements that change income into a loss
the effect of the misstatement on loan covenants, contractual agreements and regulatory provisions
the existence of statutory or regulatory reporting requirements that might have an impact on materiality levels
misstatements that have the effect of increasing management's compensation
the effect of misclassifying income between operating and nonrecurring
both A and B
both C and D
both D and E
Question 17
Corresponds to CLO 1 (b)
When an auditor uses sampling for tests of controls to gather evidence, he or she applies which of the following internal control procedures to the sample?
reperformance
recalculation
confirmation
reconciliations
physical controls that limit access to assets
Question 18
Corresponds to CLO 9 (c)
The auditor faces legal liability from which of the following sources?
audit clients
second party liability under common law
civil liability under the federal banking laws
criminal liability
civil liability under state securities laws
both A and D
both B and E
both C and D
Question 19
Corresponds to CLO 8 (c)
The report on the effectiveness of internal control over financial reporting for companies filing reports with the SEC in the U.S. must include which of the following elements?
a statement that management is responsible for maintaining effective internal control over financial reporting and for assessing the effectiveness of the internal control
a statement that the auditor is responsible for expressing an opinion on the effectiveness of internal control over financial reporting based on management's representations
a statement that the audit was conducted in accordance with the standards of the American Institute of Certified Public Accountants
a statement that the standards of the PCAOB require that the auditor plan and perform the audit to obtain reasonable assurance about the effectiveness of internal controls over the financial reporting process
a statement that the auditor certifies the audit provides a reasonable basis for his opinion
both A and D
both B and C
both D and E
Question 20
Corresponds to CLO 1(d)
Which of the following internal control procedures are tested by sampling?
segregation of duties
authorization procedures
documented transaction trails
independent recalculations
physical controls that limit access to assets
both A and C
both B and C
both D and E
Question 21
Corresponds to CLO 4 (c)
In the long-term debt and owner's equity process, the auditor might perform which of the following analytical procedures
Compare the balances in the following accounts for the current year to the prior year: long-term debt, interest expense, capital stock, additional paid in capital, and retained earnings
Calculate the debt to equity ratio for the current year and prior years
Calculate the current ratio for the current year and prior years
Compare the transactions in the following accounts for the current year to the prior year: long-term debt, interest expense, capital stock, additional paid in capital, and retained earnings
Compare the balances in the following accounts for the current year to the prior year: long-term debt, accrued interest expense, accounts payable, capital stock, paid in capital, and retained earnings
both A and B
both C and E
both D and E
Question 22
Corresponds to CLO 1(a)
A random sample for tests of controls is a sample
that is representative of the population
large enough to reduce sampling error to an acceptable level
that includes a monetary amount in the item selected
that will be subject to the internal control system of the client
where every item in the population has an equal chance of selection
both A and C
both A and E
both B and D
Question 23
Corresponds to CLO 2(b)
Which of the following is a statistical audit sampling technique that the auditor may decide to use?
judgmental sampling
haphazard sampling
monetary unit sampling
classical variables sampling
non random number sampling
both A and C
both B and E
both C and D
Question 24
Corresponds to CLO 5 (a)
If the auditor does not assess a risk of material misstatement related to a potential contingent liability,
he is required to contact the external counsel for the audit client and request additional information
he is required to contact the internal counsel for the audit client
he is not required to contact the external counsel for the audit client
he is not required to contact the internal counsel for the audit client and request additional information
Question 25
Corresponds to CLO 9 a)
Which of the following are principles that establish the basic framework for the professional code of conduct in the U.S.?
reliability
the public interest
relevance
proficiency
due care
both A and D
both B and E
both C and E
Question 26
Corresponds to CLO 6 (a)
If the management representation letter is not obtained,
issue the audit report and request that management send the letter as soon as possible
issue the report with an adverse opinion
issue the report with an "except for" opinion
the audit evidence should not be considered complete
Question 27
Corresponds to CLO 2(c)
The auditor must define the sampling unit in a way that is
consistent with the assertion being tested
consistent with the account balance being tested
consistent with the transaction being tested
consistent with the population being tested
Question 28
Corresponds to CLO 5 (a)
The auditor is provided with the evidence needed to determine whether the contingent liability should be recorded, disclosed or ignored from
attorneys hired by the auditor
attorneys hired by the claimant
professional judgment
attorneys hired by the client
Question 29
Corresponds to CLO 1(a)
Auditing sampling is:
the selection of a sample of items from a population so that the auditor expects the sample and evaluation to be representative of the population.
the selection and evaluation of a sample of items from an account so that the auditor expects the sample to be representative of the account.
the selection and evaluation of a sample of items from a population so that the auditor expects the sample to be representative of the population.
the selection and observation of a sample of items from a population so that the auditor expects the sample to be representative of the population.
Question 30
Corresponds to CLO 3(b)
Which of the following are management assertions about the accounts in cash and investment process?
existence or occurrence - for classes of transactions
completeness - for both classes of transactions and account balances
valuation and allocation - for both classes of transactions and account balances
rights and obligations - for both classes of transactions and account balances
accuracy - for both classes of transactions and account balances
Question 31
Corresponds to CLO 3(c)
Management asserts that
the company has the right to the income of cash and investments
all balances related to the investment account have been accurately recorded
all cash and investment transactions that should be presented in the financial statements are included
transactions related to the investment process have been recorded
the investment accounts are valued correctly according to the rules of the applicable financial reporting framework at year-end
both A and B
both C and E
both D and E
Question 32
Corresponds to CLO 8 (a)
The auditor must evaluate whether the financial statements are consistent with the requirements of the applicable financial reporting framework and must also consider
the overall presentation, structure, and content of the financial statements
the accounting policies selected are consistent with management's policies
the accounting estimates made by management are predictable
whether the financial statements, including the footnotes, represent the underlying transactions in a manner that achieves fair presentation
the financial forecasts made by management are accurate
both A and D
both B and C
both D and E
Question 33
Corresponds to CLO 8 (c)
The report on the effectiveness of internal control over financial reporting for companies filing reports with the SEC in the U.S. must include which of the following elements?
a statement that management is responsible for maintaining effective internal control over financial reporting and the auditor is responsible for assessing the effectiveness of the internal control
a statement that the auditor is responsible for expressing an opinion on the effectiveness of internal control over financial reporting based on management's representations
a statement that the audit was conducted in accordance with the standards of the Public Companies Accounting Oversight Board (United States)
a statement that the standards of the AICPA require that the auditor plan and perform the audit to obtain reasonable assurance about the effectiveness of internal controls over the financial reporting process
a statement that the auditor believes the audit provides a reasonable basis for his opinion
both A and B
both C and E
both D and E
Question 34
Corresponds to CLO 2(a)
Sampling methods for substantive samples include
skip random sampling
organized sampling
simple non random sampling
systematic random sampling
haphazard sampling
both A and C
both B and C
both D and E
Question 35
Corresponds to CLO 3(c)
Management asserts that
the company has the right to the assets of cash and investments
all balances related to the investment account have been accurately recorded
all cash and investment transactions that should be presented in the financial statements are relevant
transactions related to the investment process have been properly classified
the investment accounts are reliable according to the rules of the applicable financial reporting framework at year-end
both A and D
both B and C
both D and E
Question 36
Corresponds to CLO 2(a)
Sampling methods for substantive samples include
skip random sampling
organized sampling
simple random sampling
systematic non random sampling
haphazard sampling
both A and B
both C and E
both D and E
Corresponds to CLO 7 (b)
The auditor issues a qualified opinion when
the auditor has sufficient appropriate audit evidence and concludes that the misstatements to the financial statements are material, but not pervasive
the auditor is unable to obtain sufficient appropriate evidence, but the auditor concludes that the possible effects of the misstatement could be both material and pervasive
the auditor is unable to obtain sufficient appropriate evidence, but the auditor concludes that the possible effects of the misstatement could be material, but not pervasive
the auditor has reasonable evidence to determine that the financial statements are not free from material misstatement
the auditor has sufficient evidence to determine that the financial statements are not free from material misstatement
both A and C
both B and E
both D and E
Question 2
Corresponds to CLO 2(c)
The population for a substantive test of details consists of
all events in the accounts or class of transactions
all material items in the accounts or class of transactions
all material events in the accounts or class of transactions
all items in the accounts at the end of the year
all transactions in the class of transactions for the entire year
both A and B
both C and D
both D and E
Question 3
Corresponds to CLO 9 (d)
Which of the following is a defense that an auditor might use to defend himself against client lawsuits?
lack of duty
non-negligent connection
lack of damages
contributory negligence
absence of causal performance
both A and D
both B and E
both C and E
Question 4
Corresponds to CLO 9 (a)
Which of the following are principles that establish the basic framework for the professional code of conduct in the U.S.?
responsibility
reliability
relevance
proficiency
due care
both A and E
both B and C
both D and E
Question 5
Corresponds to CLO 4 (b)
Which of the following are management assertions about the accounts in long-term debt and owner's equity process?
existence or occurrence - for both classes of transactions and account balances
completeness - for classes of transactions
valuation and allocation - for account balances
rights and obligations - for both classes of transactions and account balances
accuracy - for account balances
both A and C
both C and E
both D and E
Question 6
Corresponds to CLO 7 (d)
When the auditor issues a qualified or adverse opinion, the auditor
changes the description of the auditor's procedures to state that the auditor believes that the audit evidence the auditor obtained is sufficient and appropriate to provide a basis for the auditor's modified opinion
changes the description of the auditor's responsibility to state that the auditor believes that the audit evidence the auditor obtained is sufficient and appropriate to provide a basis for the auditor's modified opinion
changes only the opinion paragraph and adds a modification paragraph
changes the opinion and introductory paragraphs
Question 7
Corresponds to CLO 7 (d)
When the auditor issues an adverse opinion, the auditor should state in the opinion paragraph, that
in the auditor's opinion, because of the significance of the matter described in the basis for adverse opinion paragraph, the financial statements are not presented fairly in accordance with the applicable reporting framework
because of the significance of the matter described in the basis for adverse opinion paragraph, the auditor has not been able to obtain sufficient appropriate evidence to provide a basis for an audit opinion, and accordingly, the auditor does not express an opinion on the financial statements
except for the effects of the matter described in the basis for modification paragraph, the financial statements are presented fairly, in all material respects, in accordance with the applicable reporting framework
the financial statements are presented fairly, in all material respects, in accordance with the applicable reporting framework
Question 8
Corresponds to CLO 1(d)
When controls "work"
the auditor increases the amount of substantive testing
the auditor reduces the amount of substantive testing
the auditor increases the amount of substantive testing over what would have been done if the control had been effective in preventing or detecting misstatements in the financial statements
the auditor decreases the amount of substantive testing over what would have been done if the control had been effective in preventing or detecting misstatements in the financial statements
the auditor reduces the amount of substantive testing over what would have been done if the control had not been effective in preventing or detecting misstatements in the financial statements
Question 9
Corresponds to CLO 4 (d)
The auditor uses substantive tests of transactions in the long-term debt and owner's equity business process to
test the reliability of transactions during the year
test the reliability of balances at the end of the year
test the recording of balances at the end of the year
test the recording of transactions during the year
Question 10
Corresponds to CLO 5 (d)
From the auditor's point of view, the problem with related party transactions is that
related party transactions may not have oversight in accordance with the applicable reporting framework
related party transactions may not have been classified in accordance with the applicable reporting framework
related party transactions may not have been occurred in accordance with the applicable reporting framework
related party transactions may not have been recorded in accordance with the applicable reporting framework
Question 11
Corresponds to CLO 5 (c)
The requirements for Type I and Type II subsequent events are
Type I events are disclosed in the financial statements
Type II events are disclosed in the financial statements
neither Type I nor Type II events are recorded in the financial statements
Type II events are recorded in the financial statements
Type I events are recorded in the financial statements
both A and B
both B and E
both C and D
Question 12
Corresponds to CLO 5 (c)
Normally, the auditor's work does not extend into the following year. However, the auditing standards require the auditor to consider certain events that occur in the year following the year under audit and determine if any of these events require
disclosure in the financial records for the year under audit
adjustment to the financial statements under audit
disclosure in the prior financial statements
adjustment to the financial records for the year under audit
disclosure in the financial statements under audit
both A and B
both B and E
both C and D
Question 13
Corresponds to CLO 5 (b)
When a contingent liability exists, the likelihood for loss can be evaluated as probable, reasonably possible, or remote. A remote loss is
a loss where the chance of occurrence is slight
a loss that is likely to occur
a loss where the chance of occurrence is moderate
falls between the chance of occurrence is slight and a loss is likely to occur
Question 14
Corresponds to CLO 8 (d)
The auditor must evaluate whether the financial statements are consistent with the requirements of the applicable financial reporting framework for which of the following items?
the financial statements adequately disclose the significant accounting policies used
the accounting policies selected are consistent with management's policies
the accounting estimates made by management are reasonable
the information presented in the accounting records is relevant, reliable, comparable, and understandable
the financial forecasts made by management are accurate
both A and C
both C and E
both D and E
Question 15
Corresponds to CLO 6 (c)
Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?
net liability positions y
positive operating cash flows n
ability to pay creditors on due dates
change from cash-on-delivery to credit transactions with suppliers
loss of key management without replacement
both A and E
both B and C
both D and E
Question 16
Corresponds to CLO 6 (d)
The auditing standards have listed several circumstances that might cause quantitatively immaterial misstatements to be judged material. These include
misstatements that change income into a loss
the effect of the misstatement on loan covenants, contractual agreements and regulatory provisions
the existence of statutory or regulatory reporting requirements that might have an impact on materiality levels
misstatements that have the effect of increasing management's compensation
the effect of misclassifying income between operating and nonrecurring
both A and B
both C and D
both D and E
Question 17
Corresponds to CLO 1 (b)
When an auditor uses sampling for tests of controls to gather evidence, he or she applies which of the following internal control procedures to the sample?
reperformance
recalculation
confirmation
reconciliations
physical controls that limit access to assets
Question 18
Corresponds to CLO 9 (c)
The auditor faces legal liability from which of the following sources?
audit clients
second party liability under common law
civil liability under the federal banking laws
criminal liability
civil liability under state securities laws
both A and D
both B and E
both C and D
Question 19
Corresponds to CLO 8 (c)
The report on the effectiveness of internal control over financial reporting for companies filing reports with the SEC in the U.S. must include which of the following elements?
a statement that management is responsible for maintaining effective internal control over financial reporting and for assessing the effectiveness of the internal control
a statement that the auditor is responsible for expressing an opinion on the effectiveness of internal control over financial reporting based on management's representations
a statement that the audit was conducted in accordance with the standards of the American Institute of Certified Public Accountants
a statement that the standards of the PCAOB require that the auditor plan and perform the audit to obtain reasonable assurance about the effectiveness of internal controls over the financial reporting process
a statement that the auditor certifies the audit provides a reasonable basis for his opinion
both A and D
both B and C
both D and E
Question 20
Corresponds to CLO 1(d)
Which of the following internal control procedures are tested by sampling?
segregation of duties
authorization procedures
documented transaction trails
independent recalculations
physical controls that limit access to assets
both A and C
both B and C
both D and E
Question 21
Corresponds to CLO 4 (c)
In the long-term debt and owner's equity process, the auditor might perform which of the following analytical procedures
Compare the balances in the following accounts for the current year to the prior year: long-term debt, interest expense, capital stock, additional paid in capital, and retained earnings
Calculate the debt to equity ratio for the current year and prior years
Calculate the current ratio for the current year and prior years
Compare the transactions in the following accounts for the current year to the prior year: long-term debt, interest expense, capital stock, additional paid in capital, and retained earnings
Compare the balances in the following accounts for the current year to the prior year: long-term debt, accrued interest expense, accounts payable, capital stock, paid in capital, and retained earnings
both A and B
both C and E
both D and E
Question 22
Corresponds to CLO 1(a)
A random sample for tests of controls is a sample
that is representative of the population
large enough to reduce sampling error to an acceptable level
that includes a monetary amount in the item selected
that will be subject to the internal control system of the client
where every item in the population has an equal chance of selection
both A and C
both A and E
both B and D
Question 23
Corresponds to CLO 2(b)
Which of the following is a statistical audit sampling technique that the auditor may decide to use?
judgmental sampling
haphazard sampling
monetary unit sampling
classical variables sampling
non random number sampling
both A and C
both B and E
both C and D
Question 24
Corresponds to CLO 5 (a)
If the auditor does not assess a risk of material misstatement related to a potential contingent liability,
he is required to contact the external counsel for the audit client and request additional information
he is required to contact the internal counsel for the audit client
he is not required to contact the external counsel for the audit client
he is not required to contact the internal counsel for the audit client and request additional information
Question 25
Corresponds to CLO 9 a)
Which of the following are principles that establish the basic framework for the professional code of conduct in the U.S.?
reliability
the public interest
relevance
proficiency
due care
both A and D
both B and E
both C and E
Question 26
Corresponds to CLO 6 (a)
If the management representation letter is not obtained,
issue the audit report and request that management send the letter as soon as possible
issue the report with an adverse opinion
issue the report with an "except for" opinion
the audit evidence should not be considered complete
Question 27
Corresponds to CLO 2(c)
The auditor must define the sampling unit in a way that is
consistent with the assertion being tested
consistent with the account balance being tested
consistent with the transaction being tested
consistent with the population being tested
Question 28
Corresponds to CLO 5 (a)
The auditor is provided with the evidence needed to determine whether the contingent liability should be recorded, disclosed or ignored from
attorneys hired by the auditor
attorneys hired by the claimant
professional judgment
attorneys hired by the client
Question 29
Corresponds to CLO 1(a)
Auditing sampling is:
the selection of a sample of items from a population so that the auditor expects the sample and evaluation to be representative of the population.
the selection and evaluation of a sample of items from an account so that the auditor expects the sample to be representative of the account.
the selection and evaluation of a sample of items from a population so that the auditor expects the sample to be representative of the population.
the selection and observation of a sample of items from a population so that the auditor expects the sample to be representative of the population.
Question 30
Corresponds to CLO 3(b)
Which of the following are management assertions about the accounts in cash and investment process?
existence or occurrence - for classes of transactions
completeness - for both classes of transactions and account balances
valuation and allocation - for both classes of transactions and account balances
rights and obligations - for both classes of transactions and account balances
accuracy - for both classes of transactions and account balances
Question 31
Corresponds to CLO 3(c)
Management asserts that
the company has the right to the income of cash and investments
all balances related to the investment account have been accurately recorded
all cash and investment transactions that should be presented in the financial statements are included
transactions related to the investment process have been recorded
the investment accounts are valued correctly according to the rules of the applicable financial reporting framework at year-end
both A and B
both C and E
both D and E
Question 32
Corresponds to CLO 8 (a)
The auditor must evaluate whether the financial statements are consistent with the requirements of the applicable financial reporting framework and must also consider
the overall presentation, structure, and content of the financial statements
the accounting policies selected are consistent with management's policies
the accounting estimates made by management are predictable
whether the financial statements, including the footnotes, represent the underlying transactions in a manner that achieves fair presentation
the financial forecasts made by management are accurate
both A and D
both B and C
both D and E
Question 33
Corresponds to CLO 8 (c)
The report on the effectiveness of internal control over financial reporting for companies filing reports with the SEC in the U.S. must include which of the following elements?
a statement that management is responsible for maintaining effective internal control over financial reporting and the auditor is responsible for assessing the effectiveness of the internal control
a statement that the auditor is responsible for expressing an opinion on the effectiveness of internal control over financial reporting based on management's representations
a statement that the audit was conducted in accordance with the standards of the Public Companies Accounting Oversight Board (United States)
a statement that the standards of the AICPA require that the auditor plan and perform the audit to obtain reasonable assurance about the effectiveness of internal controls over the financial reporting process
a statement that the auditor believes the audit provides a reasonable basis for his opinion
both A and B
both C and E
both D and E
Question 34
Corresponds to CLO 2(a)
Sampling methods for substantive samples include
skip random sampling
organized sampling
simple non random sampling
systematic random sampling
haphazard sampling
both A and C
both B and C
both D and E
Question 35
Corresponds to CLO 3(c)
Management asserts that
the company has the right to the assets of cash and investments
all balances related to the investment account have been accurately recorded
all cash and investment transactions that should be presented in the financial statements are relevant
transactions related to the investment process have been properly classified
the investment accounts are reliable according to the rules of the applicable financial reporting framework at year-end
both A and D
both B and C
both D and E
Question 36
Corresponds to CLO 2(a)
Sampling methods for substantive samples include
skip random sampling
organized sampling
simple random sampling
systematic non random sampling
haphazard sampling
both A and B
both C and E
both D and E
