ACC 562 Final Exam – Strayer New
ACC 562 Week 11 Final Exam Solved
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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
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