Reynolds Audit Quiz 1 review

Flashcard maker : Lily Taylor
According to AU-C 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Generally Accepted Auditing Standards, “presumptively mandatory requirements” in the auditing standards use which word?
Should (The auditor must comply with a presumptively mandatory requirement in all cases in which the requirement is relevant except in rare cases. The standards use the word “should” to indicate this requirement.)
Which of the following statements correctly defines the term “reasonable assurance”?
a high but not absolute level of assurance to allow auditor to detect material misstatements
. Which of the following is a management assertion regarding account balances at the period end?

A. Transactions and events that have been recorded have occurred and pertain to the entity. /react-text

B. Transactions and events have been recorded in the proper accounts. /react-text

C. The entity holds or controls the rights to assets, and liabilities are obligations of the entity. /react-text

D. Amounts and other data related to the transactions and events have been recorded appropriately.

C. The entity holds or controls the rights to assets and liabilities are obligations of the entity.
Which of the following best describes the reason an independent auditor reports on financial statements?
Different interests may exist between the entity preparing the statements and the person using the statements, and thus outside assurance is needed to enhance the credibility of the statements.
Notes that are included with financial statements are the responsibility of the
company management
Which of the following assertions is most closely related to the audit objective to verify that all sales have been recorded?
in testing the existence assertion for an asset, an auditor ordinarily works from the
accounting records of the supporting evidence
Which of the following best characterizes an auditor’s exercise of professional skepticism?
Having an attitude that includes a questioning mind
When a PCAOB auditing standard indicates that an auditor “could” perform a specific procedure, how should the auditor decide whether and how to perform the procedure?
By exercising professional judgment in the circumstances
Who establishes generally accepted auditing standards?
Auditing standards board and the public company accounting oversight board
An independent auditor must have which of the following?
The ability to exercise sound professional judgment
An attest engagement is one in which a CPA is engaged to
Issue an examination, a review, or an agreed-upon procedures report on subject matter, or an assertion about subject matter that is the responsibility of another party.
A financial statement audit is designed to
Obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to fraud or error.
Which of the following statements is true concerning an auditor’s responsibilities regarding financial statements?
An auditor’s responsibilities for audited financial statements are confined to the expression of the auditor’s opinion.
An audit of the financial statements of Camden Corporation is being conducted by an external auditor. The external auditor is expected to
Express an opinion as to the fairness of camdens financial statements

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