ACC 562 EXAM PART 2

ACC 562 EXAM PART 2

  1. The responsibility for designing and maintaining policies and procedures to identify, evaluate, and account for contingencies rests with whom?

Answer

management.

auditor.

audit committee.

client’s attorney.

  1. When a subsequent event provides evidence about conditions that did not exist at the balance sheet date the auditor should do which of the following?

Answer

ensure that any necessary footnote disclosures be included with the statements.

ensure that the financial statements are adjusted to reflect the information, including any necessary footnote disclosures.

give an inappropriate opinion.

provide management with a new engagement letter to document the terms of the revised arrangement.

  1. The driver of audit quality under the Financial Reporting Council’s Audit Quality Framework that relates to audit methodology and tools applied to the audit is which of the following?

Answer

audit firm culture.

reliability and usefulness of audit reporting.

effectiveness of the audit process.

factors outside the control of auditors.

  1. Where would the auditor make mention of issues noted during audit procedures that are not of audit significance?

Answer

Engagement letter.

Management letter.

Representation letter.

Attorney letter.

  1. If the auditor concludes that there may be a going concern problem, the auditor should do which of the following?

Answer

withdraw from the engagement.

issue a qualified or adverse opinion.

identify and assess management’s plan to overcome the problem.

communicate this fact with management one level above the controller.

  1. For registration statements filed with the SEC preparatory to selling securities, the subsequent events review goes from

Answer

the balance sheet date to the date the audit report is issued.

the balance sheet date to the end of field work.

the balance sheet date to the date of subsequent discovery of omitted procedures.

the balance sheet date to the effective date of the registration statement.

  1. Management of Megadile, Inc. refuses to sign the management representation letter given to them in the course of the audit on the grounds that it invades the company’s privacy. Such actions will be considered by the auditors to be

Answer

a violation of full and fair disclosure.

securities law violation.

a scope limitation.

a breakdown in internal controls.

  1. When a subsequent event provides evidence about conditions that existed at the balance sheet date, the auditor should do which of the following?

Answer

assign a specialist.

ensure that the financial statements are adjusted to reflect the information, including any necessary footnote disclosures.

shop for an opinion that fits the desired type of event.

provide management with a new engagement letter to document the terms of the revised arrangement.

  1. A legal concept that is not significant to the doctrine of privity is that of

Answer

negligence.

ultramares.

scienter.

engagement letters.

  1. In a lawsuit brought under the Securities Act of 1933, which of the following must the plaintiff show?

Answer

Reliance on financial statements.

Auditors guilt.

Due diligence.

That a loss was sustained.

  1. Which of the following terms refers to an intentional concealment or misrepresentation of a material fact that causes damage to those deceived?

Answer

gross negligence.

fraud.

ordinary negligence.

breach of contract.

  1. The Securities Exchange Act of 1933 places the burden of proof on which of the following?

Answer

third-party plaintiff.

attorney defendant.

auditor defendant.

client plaintiff.

  1. An example of a case that subjected an auditor to criminal charges is

Answer

the McKesson & Robbins case.

the Citizens Timm case.

the Bily v. Arthur Young & Co. case.

the Equity Funding case.

  1. In order to reduce the auditor’s liability exposure, engagement letters should include which of the following?

Answer

a clearly stated scope of the work to be done.

a statement that a trial by jury is acceptable.

the guaranteed fee structure for the engagement.

a statement that the auditor is not liable to the SEC.

  1. When the client and the auditor are both sued and judgment is rendered against both, the auditor will be required to settle the entire judgment if the client is bankrupt. Which of the following is a representation of the above?

Answer

Private Litigation Reform.

Joint and several liability statutes.

Comparative fraud.

The Securities Acts.

  1. Which aspect of statutory law places the burden of proof onto the auditor?

Answer

Scienter.

Securities Act of 1933.

Joint and Several Liability.

Ultramares.

  1. The court case that established the precedent that an auditor can be held liable to third parties for fraud and gross negligence, but limited auditor liability for ordinary negligence to those who are in privity of contract, is the

Answer

McKesson and Robbins case.

1136 Tenants Corporation case.

CIT Financial Corporation case.

Ultramares Corporation case.

  1. The adjustments arising from the audit that were considered to be material should be informed by the auditor to the:

Answer

audit staff.

management.

audit committee.

internal auditors.

  1. The primary scope of services performed in external auditing (CPA) is:

Answer

risk analysis.

control analysis.

operations analysis.

audit of financial statements.

  1. The primary scope of services performed in external auditing (CPA) is:

Answer

risk analysis.

control analysis.

operations analysis.

audit of financial statements.

  1. The partial or complete outsourcing of internal audit activities is made to public accounting firms or to other specialized firms that perform which of the following types of services?

Answer

primarily risk, control, and audit activities.

attestation services as demanded by market place.

operations analysis and risk analysis.

analytical and substantial procedures.

  1. External assurance over sustainability reports must be provided by which of the following:

Answer

Certified Public Accountants in conjunction with the annual financial audit.

those with competence in the subject matter and assurance practices.

Certified Sustainability Experts.

individuals that are not independent with the company issuing the sustainability report.

  1. Which method focuses on the materiality of current year misstatements and the reversing effect of prior-year misstatements on the income statement?

Answer

Rollover method

Iron curtain method

Percentage approach

Judgmental method

  1. The two general types of assurance that can be provided to sustainability reports include which of the following:

Answer

Reasonable assurance and Limited assurance.

Material assurance and Reasonable assurance.

Limited assurance and material assurance.

Reasonable assurance and Compliance assurance

  1. Which of the following is needed by a client while estimating fair value?

Answer

A systematic process to identify each asset that is subject to realizable value or at cost.

A process to identify relevant historical values.

An analysis of whether the organization has the ability to hold the asset to maturity and whether the decline in value is permanent.

A realistic process to estimate future cash flows to discount back to a present value.

  1. For the same client, SEC prohibits a CPA firm from providing which of the following services?

Answer

tax and external audit services

internal and external audit services.

management letter and audit services.

internal control and financial statement audits.


We are ready to write this paper for you from scratch.
Place an order for this assignment or any other paper with us. We guarantee that the paper will be delivered within the specified deadline. We also have a personalized customer support and you will be able to communicate with your writer throughout the order preparation process. Thank you for choosing us.

order-now-blue

Have troubles with paper writing? You’ve found the right paper writing company! We are the leading essay writing services that provides quality papers for a reasonable price. On our website, you can order various assignments. Our work is 100% original. We write your essay from scratch, according to the exact specifications of your assignment. We guarantee it will pass any plagiarism check

Get Your Papers Completed by Expert Writers

Order essays, term papers, research papers, reaction paper, research proposal, capstone project, discussion, projects, case study, speech/presentation, article, article critique, coursework, book report/review, movie review, annotated bibliography, or another assignment without having to worry about its originality – we offer 100% original content written completely from scratch

PLACE YOUR ORDER

Related Posts

© All Right Reserved