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Multiple Choice Quiz
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1
What body is responsible for developing standards for the audits of governmental entities?
A)The AICPA Auditing Standards Board.
B)The Public Company Accounting Oversight Board.
C)The U.S. Government Accountability Office.
D)The Federal Auditing Standards Board.
2
Which of the following aspects of an audit examination is not related to the performance principle?
A)Adequately planning the audit and supervising assistants.
B)Conducting the audit using due care.
C)Gathering sufficient appropriate evidence.
D)Obtaining an understanding of the entity, including the risk of material misstatement.
3
A list of procedures auditors need to perform to obtain evidence is called an
A)Audit plan.
B)Audit procedure.
C)Audit standard.
D)Audit budget.
4
To be appropriate, evidence must be all of the following except:
A)Sufficient.
B)Reliable.
C)Relevant.
D)Unbiased.
5
An audit opinion that concludes the financial statements are presented according to GAAP is a(n):
A)Disclaimer of opinion.
B)Adverse opinion.
C)Qualified opinion.
D)Unmodified opinion.
6
Which of the following procedures would provide auditors with the most reliable audit evidence?
A)Inquiries of the entity's internal audit staff held in private.
B)Inspection of prenumbered client purchase orders filed in the vouchers payable department.
C)Analytical procedures performed by auditors on the entity's trial balance.
D)Inspection of bank statements obtained directly from the client's financial institution.
7
Which of the following is not true with respect to the performance principle?
A)The concept of reasonable assurance permits audit teams to make mistakes and misinterpretations in evaluating evidence.
B)The risk of material misstatement is affected by both the susceptibility of the account balance to misstatement as well as the effectiveness of the auditor's procedures in detecting misstatements.
C)The concept of materiality recognizes that auditors should focus on matters that are important to financial statement users.
D)The preparation of an audit plan is an important component of the planning and supervision in an audit.
8
Management's responsibility for the financial statements is
A)Implicitly expressed in the auditors' standard report.
B)Explicitly expressed in the introductory paragraph of the auditors' standard report.
C)Explicitly expressed in the scope paragraph of the auditors' standard report.
D)Explicitly expressed in the opinion paragraph of the auditors' standard report.
9
The auditors' standard report refers to PCAOB Standards and GAAP in which paragraph?

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A)a.
B)b.
C)c.
D)d.
10
Ordinarily, what source of evidence should least affect audit conclusions?
A)Accounts receivable confirmations received directly from customers.
B)Responses to inquiries received from the client's management.
C)An auditor-prepared analysis of the allowance for doubtful accounts balance.
D)Responses to inquires received from the client's legal counsel.





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