Assignment:
1 - In considering materiality for planning purposes, an auditor believes that misstatements aggregating $10,000 would have a material effect on an entity's income statement, but that misstatements would have to aggregate $20,000 to materially affect the balance sheet. Ordinarily, it would be appropriate to design auditing procedures that would be expected to detect misstatements that aggregate
A: $10,000B: $15,000C: $20,000D: $30,000
2 - Following the Professional Standards which of the following is not one of the assertions made by management in financial statements?
A: Completeness
B: Existence or occurrence
C: Presentation and disclosure.
D: Relevance and reliability
3- Those procedures specifically outlined in an audit program are primarily designed to
A: Prevent litigations.
B: Detect all misstatements due to errors or fraud
.C: Test internal structures.
D: Gather evidence.
4 - On the basis of audit evidence gathered and evaluated, an auditor decides to increase the assessed level of control risk from that originally planned. To achieve an overall audit risk level that is substantially the same as the planned audit risk level, the auditor would
A: Increase inherent risk.
B: Increase materiality levels.
C: Decrease substantive testing.
D: Decrease detection risk.
5- After obtaining an understanding of an entity's internal control and assessing control risk, an auditor may
A: Perform tests of controls to verify management's assertions that are embodied in the financial statements.
B: Consider whether evidential matter is available to support a further reduction in the assessed level of control risk.
C: Apply analytical procedures as substantive tests to validate the assessed level of control risk.
D: Evaluate whether the company's controls detected material misstatements in the financial statements.
6- An auditor's decision concerning whether or not to "dual date" the audit report is based upon the auditor's willingness to
A: Extend auditing procedures.
B: Accept responsibility for subsequent events.
C: Permit inclusion of a footnote captioned: event (unaudited) subsequent to the date of the auditor's report.
D: Assume responsibility for events subsequent to the issuance of the auditor's report.