AT Quiz 2 - B1
AT Quiz 2 - B1
1. This involves developing an overall strategy for the expected conduct and scope of the
examination; the nature, extent, and timing of which vary with the size and complexity, and
experience with and knowledge of the entity.
a. Audit planning
b. Audit procedure
c. Audit program
2. An auditor who accepts an audit engagement and does not possess the industry expertise of the
business entity should
a. engage financial experts familiar with the nature of the business entity.
b. obtain a knowledge of matters that relate to the nature of the entity's business.
c.refer a substantial portion of the audit to another CPA who will act as the principal auditor.
3. A measure of the auditor's assessment of the likelihood that there are material
misstatements in an account before considering the effectiveness of the client's internal control
is
a. control risk
c. statistical risk
d. inherent risk
4. A CPA is conducting the first examination of a client's financial statements. The CPA hopes to
reduce the audit work by consulting with the predecessor auditor and reviewing the predecessor's
working papers. This procedure is
a. Acceptable if the client and the predecessor auditor agree to it.
b. Acceptable if the CPA refers in the audit the predecessor auditor's work.
d. Unacceptable because the CPA should bring an independent viewpoint to a new engagement.
5. In this phase, the primary objective is to minimize the likelihood of being associated to a
client whose management lacks integrity.
a. Pre-engagement
c. Evidence gathering
6. In this phase, the primary objective is to assess and evaluate the quality of the audit
services delivered by the engagement team.
a. Audit planning
c. Post-audit responsibilities
7. In this phase, the primary objective is to assess the different risks associated with the
audit to determine the nature, timing and extent of audit procedures to be performed.
a. Audit planning
c. Post-audit responsibilities
10. The auditor can obtain knowledge of the business thru except
a. Hearsays
b. Review of prior years’ working papers
c. Tour of the client’s facilities
d. Reading relevant books, periodicals and other publications