Shopping Cart
Your shopping cart is empty!
Categories
ACC 562 Final Exam Guide
$12.00

ACC 562 Final Exam Guide

This Tutorial was purchased 7 times & rated A+ by student like you.

 

This Tutorial contains following Attachments

  • ACC 562 Final Exam Guide.docx

1.Developing an understanding of the client's business and industry is essential to proficiency as discussed in the general standards of GAAS. (Points: 4)
       True
       False
 
 
2. Ratio analysis only involves a year-to-year comparison of account balances. (Points: 4)
       True
       False
 
 
3. Control is considered to be part of corporate governance. (Points: 4)
       True
       False
 
 
4. When control risk is assessed at a maximum level, the auditor assumes that the internal controls are reliable in preventing or detecting material misstatements. (Points: 4)
       True
       False
 
 
5. Accounting subsystems are accounting cycles composed of one or more accounting applications. (Points: 4)
       True
       False
 
6. Presentation and disclosure assertions imply that all transactions and balances are properly presented, disclosures represent what actually happened, and the footnote disclosures are appropriate and adequate. (Points: 4)
       True
       False
 
 
 
7. Vouching recorded transactions involves taking a sample from the journal and tracing them back to the source documents to ensure they occurred. (Points: 4)
       True
       False
 
8. Audit documentation serves as support for the financial statements. (Points: 4)
       True
       False
 
9. In analysis of the results of audit sampling, an auditor may determine that the sample size must be increased. (Points: 4)
       True
       False
 
10. The revenue cycle considered by auditors includes the sales process but not collections. (Points: 4)
       True
       False
 
11. Inventory is complex and typically considered a high-risk area in audits of service firms. (Points: 4)
       True
       False
 
12. An auditor can utilize a cross-sectional analysis for a client operating in multiple locations to identify areas of further inventory testing. (Points: 4)
       True
       False
 
 
 
13. Legal expenses are reviewed by auditors for possible litigation and related FAS 5 treatment. (Points: 4)
       True
       False
 
 
14. An imprest payroll account will never reach a zero balance. (Points: 4)
       True
       False
 
15. A turnaround document is an effective completeness control because they list essential information for further processing of the collection on account. (Points: 4)
       True
       False
 
16. Auditors will perform an analysis of leases using SFAS 13 criteria and other EITF statements to substantiate the accounting treatment. (Points: 4)
       True
       False
 
17. Contingencies are considered by the auditor in relation to the SFAS No. 5 criteria to determine whether material contingencies exist with the client and, if so, that they are properly accrued or disclosed. (Points: 4)
       True
       False
 
 
 
18. An example of a Type II Subsequent Event includes the settlement two months after year-end of a liability for an amount well in excess of the amount that was accrued at year-end. (Points: 4)
       True
       False
 
 
19. A report on agreed-upon procedures issued by accountants provides the lowest form of attestation assurance. (Points: 4)
       True
       False
 
 
20. The need for assurance services arises for all of the following reasons EXCEPT: (Points: 4)
       potential bias in providing information.
       closeness between a user and the organization.
       complexity of the processing systems.
       remoteness between a user and the organization.
 
 
21. Which one of the following is not part of the attest process? (Points: 4)
       evaluating evidence against objective criteria
       gathering evidence about assertions
       proving the accuracy of the books and records
       communicating the conclusions reached
 
 
 
22. Users can reasonably expect audited financial statements to be (Points: 4)
       complete and contain all important financial disclosures, be free from material misstatements and be presented fairly.
       complete and contain all-important financial disclosures, be free from material misstatements and be presented fairly according to GAAP.
       complete, be accurate and be presented fairly according to GAAP.
       complete and contain all-important financial disclosures, be free from all misstatements and be presented fairly according to the substance of GAAP.
 
23. Which one of the following is not a provider of assurance services? (Points: 4)
       CPAs
       internal auditors
       governmental auditors
       AICPA
 
24. The primary governing board that performs quality reviews on registered CPA firms that audit public companies is the (Points: 4)
       PCAOB
       GAO
       AICPA
       FASB
 
25. Management of an organization has the responsibility for all of the following except: (Points: 4)
       accounting principles used in financial reporting
       engagement of a qualified auditor
       internal control over financial reporting
       financial statements and disclosures
 
26. The financial statement auditor must understand the client's internal control as a component of the fieldwork standards. The one of the reason for this understanding is so that the auditor may (Points: 4)
       provide individual comments on internal control non-compliance.
       become comfortable that the client will pay its audit bills.
       assess materiality.
       assess the risk of possible misstatements in the financial statements.
 
 
27. For an auditor to be independent, he or she must be independent in (Points: 4)
       fact.
       appearance.
       fact and appearance.
       either fact or appearance.
 
 
28. An auditor is concerned with materiality for which of the following reasons? (Points: 4)
       to assess internal control
       to comply with the quality assurance standards of GAAS
       to determine the effects of misstatements on the users of financial information
       to cut down on audit procedures and testing
 
29. A proper system of corporate governance is one that demands (Points: 4)
       decision making by auditors in place of management.
       internal audit representation on the board of directors.
       audit planning to obtain competent and sufficient audit evidence.
       accountability back through the system to the shareholders.
 
 
 
30. In determining the types of activities, engagements and interactions an auditor should have with a client, the CPA and the audit firm must (select the best answer) (Points: 4)
       follow the rules exactly as they are written.
       assess all of their relationships with every client to ensure that independence is intact.
       focus on client satisfaction above all other considerations
       realize that ethics are only guidelines and a matter of personal judgment.
 
 
31. The AICPA Principles of Professional Conduct include (Points: 4)
       due professional care and supervision.
       scope and nature of services and adequate training.
       integrity and independence
       public interest, integrity and objectivity.
 
 
32. A public client is required to report material changes in internal control (Points: 4)
       monthly.
       quarterly.
       annually.
       never.
 
 
33. Programs written to accomplish specific processing tasks, such as computing payroll, are (Points: 4)
       application programs.
       operating system programs.
       Java scripts.
       access control programs.
 
 
 
 
34. The combination of which functions in an information technology environment are not necessarily a control weakness? (Points: 4)
       user and programming functions
       database administrator and data input functions
       programmers and authorization of changes
       users and certain data access
 
35. Backup controls, used to prevent data and software loss would include procedures to: (Points: 4)
       load balance in the event of heavy traffic across the network.
       constantly monitor the network for intrusion and attack.
       provide an alternate form of electricity to the corporate facilities.
       fail-over to a mirrored storage device in the event of interruption or loss.
 
 
36. Which one of the following is an example of an edit test for limits? (Points: 4)
       Only numbers are allowed to be input into the social security number field and dashes are pre-formatted.
       Each sales order is given an identifier that is also tagged to the receipt of goods record, the customer invoice record and the cash receipts record
       The purchasing department may order materials up to $5,000 in total before a second electronic authorization is required.
       Supplies may not be purchased from any vendor not authorized and existing in the vendor table.
 
 
37. The control totals used to ensure the completeness of processing in a batch processing environment include (Points: 4)
       record count.
       control totals.
       hash totals.
       all of the above.
 
 
38. The type of test used to check that no hourly employee is paid more than $400.00 in one week is: (Points: 4)
       an edit test.
       a batch control test.
       an output control test.
       none of the above.
 
 
39. Tagging and tracing might best be used to test which of the following? (Points: 4)
       The number of confirmations returned compared to the number of confirmations sent out.
       The corporate credit card is only being used for business transactions.
       All customer orders shipped were also invoiced and that cash was received.
       Quantities of product F411029 have been accurately counted in the warehouse.
 
40. Which one of the following would be the least persuasive type of evidence? (Points: 4)
       Confirmations returned by bank directly to the auditor.
       Letters of communication from the Securities Exchange Commission.
       Physical examination of perpetual inventory.
       General ledger in a newly developed information system.
 
 
 
41. The primary support of an audit is (are) (Points: 4)
       the financial statements.
       the audit working papers.
       the audit report.
       the confirmation documentation.
 
42. The primary assertion that is satisfied by physically observing the client's count of inventory is (Points: 4)
       existence.
       rights.
       valuation.
       completeness.
 
 
43. The audit team asks the client to pull a sample vendor files and examines the invoices supporting the purchases of inventory items during the year. What is the most probable reason for the use of this evidence? (Points: 4)
       Confirmation of vendors supplying inventory for existence.
       Analytical procedures to determine completeness of inventory.
       Testing for the valuation of inventory using the FIFO cost flow assumption.
       Reading the terms of the arrangements with vendors for disclosure.
 
 
44. The extent of procedures is affected mostly by: (Points: 4)
       the sheer volume of procedures to be applied by the auditor.
       the time of year in which the client takes a physical inventory in the warehouse.
       the auditor's judgment that misstatements are probable in certain balances.
       the availability of the client's staff at or near the balance sheet date.
 
 
45. An audit program is created to specify: (Points: 4)
       the type of audit opinion to be rendered based upon procedures performed.
       the audit procedures that will be performed each year for the client.
       how an auditor should think while performing audit procedures.
       objectives and procedures to be followed during the audit process.
 
 
46. Which one of the following is primary reason for documenting audit work? (Points: 4)
       to prevent litigation by other parties that question the audit performance.
       to provide a stand-alone medium that gives audit conclusions and supports the opinion.
       to supply a point of reference for all auditors performing the work subsequently.
       to supply a point of reference for all auditors performing the work subsequently.
 
 
47. Which of the following would most likely be considered intentional misapplication of accounting principles on financial statements? (Points: 4)
       A capital lease is presented as periodic rent expense rather than interest and depreciation.
       A deferred tax asset is reduced to zero with a valuation allowance.
       A stock option is expensed even though the fair value of the underlying stock on the date of grant was the same as the option's exercise price.
       Revenues for up-front fees are deferred rather than recognized immediately.
 
 
48. The audit of financial statements includes the initial approach of addressing fraud. How must an auditor address fraud in the planning stage? (Points: 4)
       The auditor must test for fraud in the planning stage by sampling accounts.
       The auditor must consider the likelihood of fraud existing in the company in the planning stage.
       The auditor must realize that most people are honest and not automatically assume that fraud exists when planning the audit.
       The auditor must not be aggressive in its initial approach to fraud as trust may be lost by the client.
 
 
49. Which of the following creates an opportunity for fraud to be committed in an organization? (Points: 4)
       Management demands financial success.
       Poor internal control.
       Commitments tied to debt covenants.
       Management is aggressive in its application of accounting rules.
 
 
50. Sam Jones, controller of Mitnikco, spends three days researching the accounting statements to find loopholes in the "rules" and to make a case for recognizing revenue earlier, rather than in later years. In the end, Sam and the other members of management determine that they will reduce the company's deferred revenue accounts and begin accounting for all revenues as agreements are signed. What are the motivations of Mitnikco management based solely on the information above? (Points: 4)
       Pressures
       Opportunity
       Rationalization
       Skepticism
 
 
51. Sampling risk is the risk that (Points: 4)
       the sample will not contain characteristics representative of the population such that inferences made about that population will be incorrect.
       the population will not contain characteristics representative of the sample such that inferences made about that sample will be incorrect.
       Neither A nor B is correct.
       Both A and B are correct.
 
 
52. The sample size varies directly with (Points: 4)
       the expected failure rate.
       the tolerable error rate.
       the allowable risk of assessing control risk too low.
       the nonsampling risk
 
 
53. The steps used in sampling during substantive testing includes the determination of each of the following except (Points: 4)
       the audit objective.
       the method of selecting a sample.
       expected misstatement conditions
       control failure risk.
 
 
54. The design of a PPS sample requires the auditor to determine all of the following except (Points: 4)
       detection risk.
       inherent risk.
       tolerable misstatement.
       expected misstatement in the account balance.
 
 
55. Which of the following is the best example of the control objective in the revenue cycle that all transactions are recorded accurately? (Points: 4)
       Sales are recorded at the invoice price expected to be collected from customers.
       Sales orders have sequential numbering.
       Recorded sales transactions are evidenced by valid invoices and shipping documents.
       Credits to customer accounts are classified as liabilities.
 
 
56. In an audit of financial statements, the risk of the high rate of return of products sold includes that of (Points: 4)
       sales that are recorded improperly.
       an estimate of accrued returns that reduces net income.
       a reduction of net sales for an increase to the sales returns and allowance account.
       consignment goods that are returned and forwarded to third parties.
 
 
57. Confirmations that are sent to select customers asking them to review the current balance due the client as shown on the client's statement and return the letters directly to the auditor indicating whether they agree with the indicated balance, are known as (Points: 4)
       direct confirmations.
       indirect confirmations.
       positive confirmations.
       negative confirmations.
 
 
58. Which of the following is an example of the type of analytics that an auditor would use for inventory? (Points: 4)
       Number of day's sales in receivables compared to industry averages.
       Inventory turnover for the previous five years.
       Number of obsolete units this period compared to last.
       Salaries of marketing personnel as a percent of total inventory.
 
 
59. Which one of the following accounts would an auditor most likely test by performing analytical procedures? (Points: 4)
       Sales commissions expense.
       Legal expenses.
       Repairs and maintenance expense.
       Travel expense.
 
 
60. Operational audits of cash management seek to identify areas in which cash management may be improved to contribute to the overall profitability and effectiveness of the organization. The internal auditor would use which of the following procedures on an operational audit of cash? (Points: 4)
       determine the compliance of treasury activities with company policy
       review procedures for identifying and investing excess funds
       review procedures for handling cash receipts
       all of the above
 
 
 
61. Which represents the most significant risk associated with restructuring liabilities on the financial statements? (Points: 4)
       Future smoothing of income by releasing the reserves.
       Related party transactions that are not recorded at arms-length.
       Understatement of assets in the period of recording the liabilities.
       Payroll liabilities that are not disclosed in the notes.
 
 
62. All of the following are significant issues for consideration when auditing for the impairment of goodwill, except (Points: 4)
       timing of the assessment by management.
       amortization in years of the goodwill.
       clear objective evidence supporting the assessment.
       understanding the client's business and its risks.
 
 
63. Simco's shaving products division was acquired over ten years ago in a purchase transaction by BlizzardCraft. The related goodwill was amortized until 2002 and $4.5 million remained on the books thereafter. In 2008, Simco's production machinery was assessed for impairment as a long-lived asset because of obsolescence issues. What relationship will the auditors most likely make between the facts stated above? (Points: 4)
       BlizzardCraft erroneously treated the acquisition of Simco as a purchase transaction when it should have been a pooling of interests.
       Simco should not have amortized goodwill previous to 2002.
       Simco's goodwill should have been written off when purchased by BlizzardCraft in a one-time transaction.
       The goodwill related to Simco may have been impaired during 2008.
 
 
64. All of the following represent a related entity to an organization except (Points: 4)
       the president's son.
       an affiliate with common ownership.
       customers.
       primary owners.
 
 
65. All of the following represent equity issuance requiring prominent accounting, presentation and disclosure treatment, except (Points: 4)
       stock with beneficial conversion features.
       Warrants issued to a consultant for services performed.
       Preferred stock that is cumulative and par value is $0.50 per share.
       Dividends have not been paid on common stock since inception.
 
66. The auditor will examine proceeds and trace them to recorded amounts of the par value of common stock to determine that (Points: 4)
       shares exist and have valid stock certificates.
       proceeds have been properly distributed between common stock and additional paid-in capital.
       dividends have been issued in accordance with the stock indenture agreement as approved by the board.
       shareholders actually have the rights to shares issued by the company in exchange for subscribed funds.
 
 
67. Which of the following is a tool that is best used by the audit team to determine if the client has included all disclosures? (Points: 4)
       Management representation letter.
       GAAS.
       Inquiry of the CFO.
       Checklists.
 
 
68. The auditor is responsible for evaluating the likelihood of a client continuing as a going concern for a reasonable period of time. A reasonable period of time is (Points: 4)
       one year from the audit report date.
       one year from the last day of field work.
       one year from the balance sheet date.
       two years from the balance sheet date.
 
69. Rock School, Inc. has a matter of material litigation that is threatened, but that has not gone to trial. The auditor's consideration of such a matter will most likely include all of the following except (Points: 4)
       sending a letter to the client's attorneys for more information
       discussions of the matter with the client and the client's insurance adjuster.
       confirmation with the harmed party regarding the amount that will be claimed.
       assessment of proper accrual or disclosure by the client in accordance with SFAS No. 5.
 
70. When the financial statements contain a material departure from GAAP that the auditor believes is justified, justification (Points: 4)
       should appear in a footnote.
       should appear in a paragraph added before the scope paragraph.
       should appear in the opening paragraph.
       should appear in a paragraph added before the opinion paragraph.
 
 
 
 
 

Write a review

Order Id


Order Id will be kept Confidential
Your Name:


Your Review:
Rating:   A   B   C   D   F  

Enter the code in the box below:



Related Tutorials
$2.00

This Tutorial was purchased 8 times & rated No rating by student like you.

Discuss one (1) way in which you anticipate using what you have learned from this course in your current or future career. Provide one (1) specific example to support your response. Speculate on one (1) specific auditing area presented in this course that you believe may be eliminated, added,..
$2.00

This Tutorial was purchased 4 times & rated A+ by student like you.

From the case study, evaluate the quality of REDTOP’s internal audit function. Based on your evaluation, recommend at least two (2) changes that you would make in order to improve the quality of REDTOP’s internal audit function. Provide a rationale to support your response. From the case stud..
$2.00

This Tutorial was purchased 5 times & rated B+ by student like you.

From the case study, determine the main potential ethical dilemmas. Next, use the seven (7) steps in the ethical decision-making framework to recommend one (1) course of action you would take in order to avoid the ethical dilemmas. Provide a rationale to support your recommendation. 1. &..
$2.00

This Tutorial was purchased 4 times & rated B+ by student like you.

From the e-Activity, analyze the auditor’s responsibility to determine if a company can continue as a going concern. From your analysis, propose at least two (2) key factors that the auditor should consider when determining an entity’s ability to continue as a going concern. Provide a rationale t..
$2.00

This Tutorial was purchased 7 times & rated A by student like you.

From the e-Activity, determine the main reasons why several members of top management in Phar-Mor perpetrated the financial statement fraud. Next, recommend one (1) strategy that the auditors might have taken to detect or prevent the fraud. Provide a rationale to support your recommendation. ..
$2.00

This Tutorial was purchased 4 times & rated A by student like you.

From the e-Activity, support or critique the idea that the Committee of Sponsoring Organization of the Treadway Commission (COSO) transition would strengthen internal controls over financial reporting in publicly traded companies. Provide a rationale to support your response.   From ..
$2.00

This Tutorial was purchased 6 times & rated B+ by student like you.

Imagine you work for an auditing firm. Your most recent task is to determine whether or not your firm should bid to perform the auditing services of a public company. Determine the fundamental kind of information that you need in order to make an informed decision as to whether or not to bid on t..
$2.00

This Tutorial was purchased 5 times & rated A+ by student like you.

From the first e-Activity, determine at least two (2) AICPA Professional Conduct principles that are most likely to be violated. Provide a rationale to support your response. •From the second e-Activity, recommend at least two (2) additional responsibilities that the audit committee shou..
$2.00

This Tutorial was purchased 4 times & rated B+ by student like you.

From the case study, use the ethical framework to propose a course of action that you would take concerning the audit. Provide a rationale for your response. Imagine that you work for an audit firm and the firm selected you to assess its auditor independence and the potential threats to ..
$2.00

This Tutorial was purchased 4 times & rated A by student like you.

Analyze the changes made to corporate governance rules since the implementation of the Sarbanes–Oxley Act of 2002. Based on your analysis, formulate an opinion on whether or not these changes are sufficient in preventing financial fraud. Provide a rationale for your response. Debate it! Audit..
$2.00

This Tutorial was purchased 6 times & rated A+ by student like you.

Analyze the need for unbiased financial reporting. Based on your analysis, determine at least two (2) drivers that may cause financial reporting to be biased. Provide a rationale to support your response. Analyze the audit opinion formulation process and suggest at least one (1) improvement t..
$10.00

This Tutorial was purchased 4 times & rated A+ by student like you.

Question 1             CPAs are licensed by the                                 ..
$12.00

This Tutorial was purchased 7 times & rated A+ by student like you.

1.Developing an understanding of the client's business and industry is essential to proficiency as discussed in the general standards of GAAS. (Points: 4)        True        False     2. Ratio analysis only involves a year-to-y..
$12.00

This Tutorial was purchased 11 times & rated A by student like you.

This Tutorial contains 2 Different PPT   Review the Freescale Semiconductor case, located in Chapter 9 of your textbook.   Prepare a twelve to twenty (12-20) slide PowerPoint presentation with speaker notes in which you:   1. Give your opinion as to whether ..
$12.00

This Tutorial was purchased 9 times & rated A+ by student like you.

This Tutorial contains 2 Different Papers   Review the Cardillo Travel Systems case, located in Chapter 6 of your textbook.   Write a four to five (4-5) page paper in which you:   Explain the Securities and Exchange Commission’s rationale to charge Cardillo ..
$12.00

This Tutorial was purchased 12 times & rated A+ by student like you.

This Tutorial contains 2 Different Papers   Determine the regulatory oversight that was in place while the Ponzi scheme was operating, and speculate on the main reasons why they did not discover the scheme. Assume you are an auditor for a firm that had $10 million dollars inve..
Acc562Papers © 2017 All Rights Reserved.Powered by:Webzindagi.