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    Alexander Concepcion
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    This document contains 11 multiple choice questions from Chapter 3 of the textbook "Auditing and Assurance Concepts And Applications" by Concepcion, Alexander A. The questions cover topics like materiality, risk factors, audit procedures, audit programs, and independence. The document provides the questions and answers to test understanding of fundamental auditing concepts.

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    CHAPTER 3

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    This document contains 11 multiple choice questions from Chapter 3 of the textbook "Auditing and Assurance Concepts And Applications" by Concepcion, Alexander A. The questions cover topics like materiality, risk factors, audit procedures, audit programs, and independence. The document provides the questions and answers to test understanding of fundamental auditing concepts.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
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    Download as doc, pdf, or txt
    378 views2 pages

    AUDITING

    Uploaded by

    Alexander Concepcion
    This document contains 11 multiple choice questions from Chapter 3 of the textbook "Auditing and Assurance Concepts And Applications" by Concepcion, Alexander A. The questions cover topics like materiality, risk factors, audit procedures, audit programs, and independence. The document provides the questions and answers to test understanding of fundamental auditing concepts.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    of 2

    Concepcion, Alexander A.

    Auditing and Assurance Concepts And Applications

    BSA 3 – Block 2 MW (1:30 PM – 4:30 PM)

    Chapter 3: Multiple Choice Questions

    1. The concept of materiality will be at least important to the CPA in determining the

    ANSWER: D. Effects of the CPA's direct financial interest in a client upon his or her
    independence

    2. Edison Corporation has a few large accounts receivable that total P1,400,000. Victor Corporation has a
    great number of small accounts receivable that also total P1,400,000. The importance of a misstatement in
    any one account is therefore greater for Edison than for Victor. This is an example of the auditor’s
    concept of

    ANSWER: A. Materiality

    3. Which of the following elements ultimately determines the specific auditing procedures necessary
    under the circumstances to afford a reasonable basis for an opinion?

    ANSWER: A. Auditor judgment

    4. Which of the following statements is not correct about materiality?

    ANSWER: B. An auditor considers materiality for planning purposes in terms of the largest
    aggregate level of misstatements that could be material to anyone of the financial statements.

    5. Inherent risk and control risk differ from planned detection risk in that they

    ANSWER: C. Exist independently of the financial statement audit

    6. In considering materiality for planning purposes, an auditor believes that misstatements aggregating P
    10, 000 would have a material effect on an entity’s income statement, but that misstatements would have
    aggregate P 20,000 to materially affect the balance sheet. Ordinarily, it would be appropriate to design
    auditing procedures what would be expected to detect misstatements that aggregate
    ANSWER: A. P10,000

    7. In planning and performing an audit, auditors are concerned about risk factors for two distinct types of
    fraud: fraudulent financial reporting and misappropriation of assets. Which of the following is a risk
    factor for misappropriation of assets?

    ANSWER: C. An unreliable accounting system

    8. Which portion of an audit is least likely to be completed before the balance sheet date?

    ANSWER: C. Substantive procedure

    9. Which of the following should the auditors obtain from the predecessor before accepting an audit
    engagement?

    ANSWER: D. Facts that might bear in the integrity of management.

    10. Which of the following item would typically not be included in an audit program?

    ANSWER: D. All of the above would typically be included in an audit program.

    11. Which of the following statements describes upper posts of an audit program?

    ANSWER: C. An audit program is useful for monitoring the progress of the audit.

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