Wiley CPAexcel Exam Review 2014 Study Guide, Auditing and Attestation

Appendix A: Auditing and Attestation Sample Examination

Testlet 1

1. Which of the following is ordinarily considered to be a fraud risk factor?

a. The company’s financial statements include a number of last minute material adjustments.

b. Management regularly informs investors of forecast information.

c. The company has experienced increasing earnings over the previous five years.

d. The company’s president is included as a member of the board of directors.

2. Which of the following statements best describes the primary purpose of Statements on Auditing Standards?

a. They are guides intended to set forth auditing procedures that are applicable to a variety of situations.

b. They are procedural outlines that are intended to narrow the areas of inconsistency and divergence of auditor opinion.

c. They are authoritative statements, enforced through the Code of Professional Conduct.

d. They are interpretive guidance.

3. Independence is required for which of the following types of engagements?

Agreed-upon procedures	Review
a.	Yes	Yes
b.	Yes	No
c.	No	Yes
d.	No	No

4. Which of the following should an auditor obtain from the predecessor auditor prior to accepting an audit engagement?

a. Analysis of balance sheet accounts.

b. Analysis of income statement accounts.

c. All matters of continuing accounting significance.

d. Facts that might bear on the integrity of management.

5. Which of the following is correct concerning allowing additions and deletions to audit documentation ...