Question 1. Which one of the following is among the three components of audit risk?

1. Which one of the following is among the three components of audit risk?

2. The Hochfelder Case is important because it limited auditor liability under:

3. Which of the following is an INCORRECT statement concerning one of the field work standards?

4. An auditor would be most likely to issue a “summary of findings” in connection with which one of the following types of services?

5. Making sure that the detail of and accounts receivable file agrees with the general ledger before the file is used to produce confirmations is an example of which of the following audit procedures?

6. The auditor has some control over:

7. Concerning such matters as the integrity of management, errors, and illegal acts, the auditor should plan the audit with an attitude of:

8. Incompatible duties are those that allow an irregularity to be perpetrated:

9. In making judgments about materiality at the account balance level, the auditor must consider the relationship between it and financial statement materiality. This should lead the auditor to plan the audit to detect misstatements that:

10. Which one of the following is NOT an inherent limitation in an entity’s internal controls?

11. Use of auditor judgment or of a risk matrix is necessary in revising planned detection risk whenever:

12. The auditor has decided to use PPS sampling in the confirmation of individual sales transactions with customers. The population and the logical sampling unit are most likely to be, respectively:

13. Which of the following is NOT considered an access control?

14. Which of the following is NOT an element of a computer-based system?

15. The use of computer systems in accounting creates more areas where errors can occur. Which of the following should be of most concern?

Fill in the Blank

16. Differences exist between the Securities Act of 1933 and 1934. More cases have been brought against auditors under the 1934 Act because it applies to annual filings and…………….

17. The type of risk that is independent of the audit of the financial statements and therefore cannot be changed is…………….

18. Occasionally, employees will work together to conceal fraud. This is known as…………….

19. Sometimes the auditor does not have the book value of the individual items in the sample. In this case, the sampling technique to be used is…………….

20. According to the Sarbanes-Oxley Act of 2002, the establishment and maintenance of internal controls is the responsibility of…………….

True or False

21. The fact that a company’s management does not place a high priority on the entity’s values creates a high-risk condition.

22. The AICPA provides a broad range of services to its members and the accounting profession. Membership into this organization is mandatory for Certified Public Accountants.

23. In order to fully understand the internal controls of an organization, the auditor must consider circumstances and judgment.

24. The steps for assessing the risk of material misstatement in the financial statements include evaluating the types of misstatements that might occur and evaluating the likelihood and magnitude of potential misstatements.

25. Computer abuse and computer fraud essentially mean the same thing.

26. A CPA Risk Advisory service consists of decision makers who are not a member of management or a board of directors.

27. Internal control can provide absolute assurance to a company’s management and board of directors regarding the entity’s ability

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