1.

Which of the following is not among the characteristics of the procedures performed in
completing the audit?
a.
They are optional since they have only an indirect impact on the opinion to be
expressed.
b.
They involve many subjective judgments by the auditor.
c.
They are performed after the balance sheet date.
d.
They are usually performed by audit managers or other senior members of the audit team
who have extensive audit experience with the client.
e.
They do not pertain to specific transaction cycles or accounts.

2.

Which of the following is not among the specific auditing procedures the auditor performs to
obtain additional audit evidence?
a.
making subsequent events review
b.
reading minutes of meetings
c.
reviewing evidence concerning litigation, claims, and assessments
d.
obtaining client representation letter
e.
performing analytical procedures

3.

By definition, subsequent events occur between:

a.
the interim and balance sheet date.
b.
the balance sheet date and the report date.
c.
the report date and the date the report is issued.
d.
the date the report is approved and the date the report is issued.
e.
the balance sheet date and the date the report is issued.

4.

Which of the following events in a subsequent period is an example of a type 1 subsequent

event?
a.
issuance of long-term bonds
b.
settlement of warranties in excess of recorded amounts
c.
purchase of a business
d.
issuance of preferred stock
e.
casualty loss resulting from a flood

5.

Which of the following events in the subsequent period is an example of a Type 2 subsequent
event?
a.
realization of recorded year-end receivables at a different amount than recorded
b.
settlement of recorded year-end estimated product warranty liabilities at a different
amount than recorded
c.
purchase of a machine
d.
purchase of a business
e.
sale of equipment

6.

Ordinarily, type 1 subsequent events require:

a.
adjustment.
b.
adjustment and disclosure.
c.
a disclaimer.
d.
inclusion as a reportable condition.
e.
Disclosure.

7.

Ordinarily, type 2 subsequent events require:

a.
adjustment.
b.
adjustment and disclosure.
c.
a disclaimer.
d.
inclusion as a reportable condition.
e.
disclosure.

8.

In working with the minutes of meetings of stockholders, board of directors, and its
subcommittees, the auditor should:
a.
read the minutes of all important meetings.
b.
read the minutes of all meetings.
c.
read the significant items in all meetings.
d.
read the minutes of all stockholders meetings.
e.
scan the minutes of all meetings.

9.

Which of the following subsequent events is least likely to be discovered by reading the latest
interim financial statements?
a.
a new bond issue authorization
b.
a major increase in the writeoff of receivables.
c.
a treasury stock purchase made immediately after year-end.
d.
the discontinuance of a product line.
e.
the payment of a cash dividend.

10. Which of the following subsequent events is least likely to be discovered by reading the minutes
of meetings?
a.
a new bond issue authorization
b.
the payment of a cash dividend.
c.
a treasury stock purchase.
d.
the discontinuance of a product line.
e.
a major increase in the writeoff of receivables.
11. The primary source of information about litigation, claims, and assessments is:
a.
the board of directors.
b.
the clients attorneys.
c.
management.
d.
direct confirmation with the other party involved.
e.
the audit committee.
12. A lawyers refusal to respond to a letter of audit inquiry normally requires the auditor to:
a.
issue a qualified opinion or a disclaimer of opinion.
b.
issue an unqualified opinion with an explanatory paragraph.
c.
issue a qualified or adverse opinion.
d.
issue a standard three-paragraph unqualified opinion.
e.
contact the clients in-house attorney for the relevant information.
13. The auditor is required to obtain certain written representations from management in meeting
the:
a.
first standard of field work.
b.
third standard of field work.
c.
third standard of reporting.
d.
second standard of field work.
e.
second standard of reporting.
14. A client has provided a client representation letter to the auditor, but the auditor is not able to
support a management representation that is material to the financial statements. This will
normally require the auditor to:
a.
issue an unqualified opinion with an explanatory paragraph.
b.
issue a qualified opinion or a disclaimer of opinion.
c.
issue a qualified or adverse opinion.
d.
issue a standard three-paragraph unqualified opinion.
e.
withdraw from the engagement.
15. The following steps are taken during the evaluation of the audit findings:
A:
Making technical review of financial statements
B:
Making final review(s) of working papers
C:
Making final assessment of materiality and audit risk
D:
Formulating opinion and drafting audit report
E:
Evaluating whether there is substantial doubt about the entitys ability to continue as a
going concern
The order in which these steps should be performed is:
a.
ABCDE.
b.
CEADB.
c.
EDCAB.
d.
BAECD.
e.
ADCEB.

16. The practice of dual dating is associated with:

a.
subsequent events between the balance sheet date and the report date.
b.
subsequent events between the balance sheet date and the issuance of the report.
c.
subsequent events between the report date and the issuance of the report.
d.
the discovery of omitted procedures.

e.

the discovery of facts existing at the report date.