ACCT 422 Quiz 1 (UMUC)

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ACCT 422 Quiz 1 (UMUC)

MULTIPLE CHOICE.  Choose the one alternative that best completes the statement or answers the question (5 points each).  (30 points)

1) Analytical procedures can be very effective in detecting inventory fraud. Which of the following analytical procedures would not be useful in detecting fraud

2) Which of the following deal with ongoing or periodic assessment of the quality of internal control by management?

3) In order to properly plan and perform an audit, an important fact for both the auditor and the client to understand is that:

4) Confirmation of accounts receivable balances normally provides evidence concerning the:

5) Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called:

6) Three common types of attestation services are:

7) Most auditors believe that financial statements are “presented fairly” when the statements are in accordance with GAAP, and that it is also necessary to:

8) According to the profession’s ethical standards, an auditor would be considered independent in which of the following instances?

9) In the performance of an audit, a CPA:

10) Which of the following is not one of the reasons that auditors provide only reasonable assurance on the financial statements?

Essay:  (10 points) –  Describe the audit risk model and each of its components.  

Problems

(10 points) A CPA is in the audit planning phase of a company.  An understanding needs to be established regarding the responsibilities of the CPA and the company’s management. For each of the task items listed below indicate the responsible party from the list of choices given. Each choice may be used once, more than once or not at all.

Responsible Party:

a. Auditor is responsible

b. Management is responsible

c. Both are responsible

d. Neither are responsible