Exam (elaborations)
PA D251 QUESTIONS AND ANSWERS
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PA D251 QUESTIONS AND ANSWERS
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In which circumstance would an auditor change an audit objective to estimating the
correct value?
a. When the total estimated misstatement exceeds the tolerable misstatement
b. When the expected misstatement is less than the tolerable misstatement
c. When an internal control is not working properly
d. When an account balance reflects an understatement
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, a. When the total estimated misstatement exceeds the tolerable
misstatement
A client made a decision to discontinue a major line of business after the balance
sheet date. How should an auditor treat this type of subsequent event ?
a. Disclose and adjust the year - end financial statements
b. Adjust the year - end financial statements
c. Disclose the information in the notes to the financial statements
d. Adjust but do not disclose the information in the year - end financial statements
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c. Disclose the information in the notes to the financial statements
Which opinion should an auditor use for a situation where there is a departure from
financial reporting framework that is material and pervasive?
a. Unqualified
b. Adverse
c. Disclaimer
d. Qualified
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b. Adverse
Which document should auditors review to determine if a purchase of goods or
services is authorized?
, a. Requisition
b. Bill of lading
c. Invoice
d. Sales order
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a. Requisition
What is a support letter when an auditor is gathering audit evidence in a going
concern evaluation?
a. Working paper documentation prepared by the auditor that management has the
required financial support
b. Working paper documentation prepared by the auditor documenting
management's assertion that bankruptcy will be avoided in the near future
c. Written evidence that management believes bankruptcy will be avoided in the near
future
d. Written evidence that management has the required fina
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d. Written evidence that management has the required financial support
Which activity occurs with the acquisition and payment cycle?
a. Prepare shipping and packing documents
b. Generate backorder
c. Check inventory stock status
d. Create requisition for goods
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