Aud - ME 3 – WMC UPDATED Exam Questions and CORRECT Answers
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Course
WMC
Institution
WMC
Aud - ME 3 – WMC UPDATED Exam
Questions and CORRECT Answers
What could be difficult to determine because electronic evidence may not be retrievable after
a specific period? - Correct Answer- The timing of control and substantive tests
The management of Cain Compant, a nonissuer, engaged Bel...
Aud - ME 3 – WMC UPDATED Exam
Questions and CORRECT Answers
What could be difficult to determine because electronic evidence may not be retrievable after
a specific period? - Correct Answer- The timing of control and substantive tests
The management of Cain Compant, a nonissuer, engaged Bell, CPA, to audit Cain's internal
control. Bell's report described several material weaknesses and potential errors and
irregularities that could occur. Subsequently, management included Bell's report in its annual
report to the Board of Directors with a statement that the cost of correcting the weaknesses
would exceed the benefits. Bell should: - Correct Answer- Disclaim an opinion as to
management's cost-benefit statement
A letter issued on significant deficiencies relating to an entity's internal control observed
during an audit of the financial statements of a non-issuer should include a: - Correct Answer-
restriction on the use of the report
also:
-indicate that the purpose of the audit was not to provide assurance on internal control
-include the definition of significant deficiencies
What question is appropriate to include in an internal control questionnaire concerning the
completeness assertion for purchases? - Correct Answer- Are purchase orders, receiving
reports, and vouchers prenumbered and periodically accounted for?
The likelihood of assessing control risk too high is the risk that the sample selected to test
controls: - Correct Answer- does not support the auditor's planned assessed level of control
risk when the true operating effectiveness of internal control justifies such an assessment
The audit work performed by each assistant should be reviewed to determine whether it was
adequately performed and to evaluate whether the: - Correct Answer- results are consistent
with the conclusions to be presented in the auditor's report
In using the work of a specialist, an auditor of a nonissuer may refer to the specialist in the
auditor's report if, as a result of the specialist's findings, the auditor: - Correct Answer-
modifies the opinion
, aka the findings must result in a change to the auditors report
Reporting on internal control to meet the requirements of Government Auditing Standards
differs from reporting under other generally accepted auditing standards in that Government
Auditing Standards requires a: - Correct Answer- report describing the scope of the auditor's
testing of compliance and of internal control
Does the cost-benefit relationship of obtaining the audit evidence have a direct impact in
determining the sufficiency of evidence gathered during an audit? - Correct Answer- No, but
it may be a reason for or against performing certain procedures
Does the auditor's professional judgment have a direct impact in determining the sufficiency
of evidence gathered during an audit? - Correct Answer- Yes
Which of the following entity level controls is specifically identified in the professional
standards as a control of importance that should be evaluated?
Would an auditor likely use an entity's annualized interim financial statements in determining
the auditor's preliminary judgment about materiality? - Correct Answer- Yes
If an auditor notes several material misstatements in sales caused by a control deficiency and
the client agreed to record corrections of those misstatements, is the auditor likely to issue a
qualified opinion on the financial statements? - Correct Answer- No, as the company agreed
to adjust its financial statements
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