AICPA Released Questions AUD 2015 Difficult

7/25/2019 AICPA Released Questions AUD 2015 Difficult

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2.A practitioner may perform an agreed-upon procedures engagement onprospective financial statements provided that which of the following ismet?

Use of the agreed-upon procedures report is notrestricted.

The practitioner sets the criteria to be used in the determination offindings.

The client agrees that the practitioner will decide appropriateprocedures to be performed.

The prospective financial statements include a summary of significantassumptions.

3.If the predecessor auditor refuses to give the current auditor of anonissuer access to the documentation, what should the current auditordo?

Review the risk assessment of the opening balances of the financialstatements.

Withdraw from the engagement.

Disclaim an opinion due to a scope limitation.

Discuss the matter with the client's legal counsel.


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4.Analytical procedures used in planning an audit should focus on:

Identifying material weaknesses in internal control.

Enhancing the auditor's understanding of the client's business.

Testing individual account balances that depend on accountingestimates.

Evaluating the adequacy of the evidence gathered concerning unusualbalances.

5.If an auditor is obtaining an understanding of an issuer's information andcommunication component of internal control, which of the following factorsshould the auditor assess?

The integrity and ethical values of top management.

The philosophy and operating style of management to promote

effective internal control over financial reporting.

The classes of transactions in the issuer's operations that aresignificant to the issuer's financial statements.

The oversight responsibility over financial reporting and internal controlby the board or audit committee.


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6.Which of the following is not a role of the risk assessment in anintegrated audit of a nonissuer?

Concluding on the effectiveness of a given control.

Selecting controls to test.

Determining significant accounts and relevant assertions.

Determining evidence necessary to conclude on the effectiveness of agiven control.

7.Which of the following situations represents a limitation, rather than a

failure, of internal control?

A jewelry store employee steals a small necklace from a displaycabinet.

A bank teller embezzles several hundred dollars from the cash drawer.

A purchasing employee and an outside vendor participate in a kickbackscheme.

A movie theater cashier sells reduced-price tickets to full-payingcustomers and pockets the difference.


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12.When planning an engagement to examine the effectiveness of the

entity's internal control in an integrated audit of a nonissuer, a practitioner

would least likely consider which of the following factors?

Preliminary judgments about the effectiveness of internal control.

The extent of recent changes in the entity and its operations.

The type of available evidential matter pertaining to the effectiveness ofthe entity's internal control.

The evaluation of the operating effectiveness of the controls.

13.In the audit of a nonissuer, which of the following statements is correctregarding the use of external confirmations to obtain audit evidence?

Management's refusal to allow an auditor to perform externalconfirmation procedures is considered a departure from GAAP sufficient toqualify the opinion.

Negative confirmations provide more persuasive audit evidence thanpositive confirmations.

Negative confirmations should be used only if a very high exceptionrate is expected.

A factor for an auditor to consider when designing confirmationrequests is the assertion being tested.


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14.After performing a compliance audit of an entity that received federalfunds, what conclusion would the auditor draw if the entity does nothaveadequate documentation to support $5 million in operating expenses paidfrom federal program funds?

The entity spent $5 million in operating expenses that were notapproved.

Questioned costs of $5 million for operating expenses have beenidentified.

The entity spent $5 million of government funds for services that were

notrequired.

The entity submitted unauthorized invoices for expenses.

15.An auditor of a nonissuer is most likely to conclude that a misstatement

identified during an audit that is below the quantitative materiality limit is

qualitatively material if it

Changes the company's operating results from a net loss to a netincome.

Arises from a transaction cycle with controls that were determined to beoperating effectively.

Is the first time a misstatement has arisen from the relevant transactioncycle.

Decreases management's incentive compensation for the period.


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18.A nonissuer requests that a CPA change an audit engagement to areview engagement. If the accountant agrees to the change, how, if at all,should the accountant's review report be modified?

The accountant should issue the review report without mentioning thechange in engagement.

The accountant should include in the review report a disclaimer of anaudit opinion.

The accountant should include in the review report the circumstancesthat resulted in the change in engagement.

The accountant should include in the review report a reference to theoriginal engagement but notthe reason for the change.

19.Which of the following procedures regarding notes payable would an

accountant most likely perform during a nonissuer's review engagement?

Confirming the year-end outstanding note payable balance with thelender.

Examining records indicating proper authorization of the notes payable.

Making inquiries of management regarding maturities, interest rate, andcollateral.

Documenting control procedures for payment calculations of the notes'principal and interest.


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22.According to the AICPA Code of Professional Conduct, which of the

following activities results in an act discreditable to the profession?

A CPA solicits recent Uniform CPA Examination questions withoutwritten authorization from the AICPA.

A CPA signs a document containing immaterial false and misleadinginformation, or permits or directs another CPA to do so.

A CPA who is engaged to perform a government audit neglects tofollow certain government auditing requirements and discloses in the auditreport the fact that such requirements were not followed and the reasons

for it.

A CPA fails to give a client copies of the CPA's workpapers related to acompleted and issued work product upon the client's request because theclient has notpaid fees payable to the CPA for the work product.

23.An issuer's auditor is prohibited from providing tax services to which of

the following individuals?

The chair of the board of directors.

The chair of the audit committee.

The CEO.

The CFO of an affiliate of the issuer audited by another firm.


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24.Each of the following is an ethical principle that should guide the workof auditors in the conduct of audits under government auditing standards,except

Materiality.

Integrity.

The public interest.

Proper use of government information.

25.According to the IFAC Code of Ethics for Professional Accountants,

audit teams are required to be independent of the audit client during the

engagement period and during which other period?

The fiscal year following the period covered by the financial statements.

The period covered by the financial statements.

The calendar years that include any part of the period covered by thefinancial statements.

The two years prior to the period covered by the financial statements.


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Answers:

1.Which of the following statements correctly defines the term reasonableassurance?

A substantial level of assurance to allow an auditor to detect a materialmisstatement.

A significant level of assurance to allow an auditor to detect a materialmisstatement.

An absolute level of assurance to allow an auditor to detect a materialmisstatement.

A high, but not absolute, level of assurance to allow an auditor todetect a material misstatement.

2.A practitioner may perform an agreed-upon procedures engagement onprospective financial statements provided that which of the following ismet?

Use of the agreed-upon procedures report is notrestricted.

The practitioner sets the criteria to be used in the determination offindings.

The client agrees that the practitioner will decide appropriateprocedures to be performed.

The prospective financial statements include a summary ofsignificant assumptions.


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3.If the predecessor auditor refuses to give the current auditor of anonissuer access to the documentation, what should the current auditordo?

Review the risk assessment of the opening balances of thefinancial statements.

Withdraw from the engagement.

Disclaim an opinion due to a scope limitation.

Discuss the matter with the client's legal counsel.


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AICPA Released Questions AUD 2015 Difficult