AUD Question 1.
AICPA.AICPA.120606AUD
A government internal audit function is presumed to be free from organizational independence impairments for reporting internally when the head of the
organization
A. Is not accountable to those charged with governance.
B. Performs auditing procedures tha...
AUD Question 1. D. None of the above.
AICPA.AICPA.120606AUD AUD QUESTIONS
A government internal audit function is presumed to be free from organizational independence impairments for reporting internally when the head of the
organization AUD Question 6.
A. Is not accountable to those charged with governance. AICPA.130507AUD-SIM
B. Performs auditing procedures that are consistent with generally accepted accounting principles.
C. Is a line-manager of the unit under audit. In AICPA professional standards, the word sho
D. Is removed from political pressure to conduct audits objectively, without fear of political reprisal. Interpretive suggestion that does not constitut
requirement.
AUD Question 2. B. Unconditional requirement with which the
AICPA.120608AUD C. Presumptively mandatory requirement fro
D. Recommendation that has no authoritative
The controller of a small utility company has interviewed audit firms proposing to perform the annual audit of their employee benefit plan.
According to the guidelines of the Department of Labor (DOL), the selected auditor must be A. The firm that proposes the lowest fee for the work AUD Question 7.
required. AICPA.130506AUD-SIM
B. Independent for purposes of examining financial information required to be filed annually with the DOL.
C. Included on the list of firms approved by the DOL. Interpretive publications include all of the follo
D. Independent of the utility company and NOT relying on its services. except for A. Appendices to Statements on Au
Standards.
AUD Question 3. aq.aud.sec.005_2017 B. Articles in the AICPA’s Journal of Accounta
C. Auditing guidance included in AICPA Audit
Which of the following employment relationships does not impair independence under SEC rules? D. Auditing interpretations of the Statements
A. The Badger audit firm audits ABC Co., a publicly traded company. Tam is on Badger’s audit team for the audit. His sister is a direct report of the
CFO of ABC. AUD Question 8.
B. The Otter audit firm audits XYZ Co., a publicly traded company. Tim was on Otter’s audit team for the audit last year, but just a few days after AICPA.070632AUD
last year’s audit was completed, Tim severed all ties with Otter and went to work as the controller at XYZ.
C. The Weasel audit firm audits LMN Co., a publicly traded company. LMN’s audit cycle runs from January 1 to December 31. Tom was on Wea An auditor’s engagement letter most likely wo
sel’s audit team for the 2016 audit. He severed all ties with Weasel on March 1, 2017. Tom went to work in a significant accounting A. Lists potential significant deficiencies disco
position at LMN on January 2, 2019. B. Explains the analytical procedures that the
D. The Possum audit firm audits PQR Co., a publicly traded company. Max is lead partner on the PQR audit team. Max’s sister Estrella is CFO of C. Describes the auditor’s responsibility to ev
PQR. Max and his sister are estranged. D. Limits the auditor’s responsibility to detect
AUD Question 4. aq.sec.exch.com.001_2017 AUD Question 9.
AICPA.900553AUD-AU
Which of the following are “covered persons” for purposes of the SEC’s independence rules?
A. Sarah, a tax partner at her firm. She gave 15 hours of advice to her firm’s audit team regarding the audit of ABC Co. The scope and nature of an auditor’s contractu
B. Tory, the chairman and senior partner at Sarah’s firm. the A. Management letter.
C. Burt, the lead partner for the ABC Co. audit at Sarah’s firm. B. Scope paragraph of the auditor’s report.
D. All of the options.
, AUD QUESTIONS
AUD Question 11. AICPA.111163AUD
AICPA.020419AUD-AU
Which of the following conditions or events m
An auditor discovered that a client’s accounts receivable turnover is substantially lower for the current year than for the prior year. continue as a going concern?
This may indicate that A. Significant related party transactions are p
A. Fictitious credit sales have been recorded during the year. B. Usual trade credit from suppliers is denied
B. Employees have stolen inventory just before the year end. C. Arrearages in preferred stock dividends are
C. The client recently tightened its credit-granting policies. D. Restrictions on the disposal of principal ass
D. An employee has been lapping receivables in both years.
AUD Question 12. AUD Question 17.
AICPA.930517AUD-AU aicpa.aicpa.120606aud
The authority to accept incoming goods in receiving should be based on a(an) A. A government internal audit function is presum
Vendor’s invoice. the head of the organization
2 3
B. Materials requisition. A. Is not accountable to those charged with g
C. Bill of lading. B. Performs auditing procedures that are con
D. Approved purchase order. C. Is a line-manager of the unit under audit.
D. Is removed from political pressure to cond
AUD QUESTIONS
AUD Question 13.
AICPA.920548AUD-AU
AUD Question 18.
Which of the following control procedures would be most likely to assist in reducing control risk related to the existence or occurrence of manufacturing AICPA.921125AUD-AU
transactions?
A. Perpetual inventory records are independently compared with goods on hand. In planning a statistical sample for a test of con
B. Forms used for direct material requisitions are prenumbered and accounted for. rate because of the results of the prior year’s t
C. Finished goods are stored in locked limited-access warehouses.
D. Subsidiary ledgers are periodically reconciled with inventory control accounts. The auditor most likely would then increase th
AUD Question 14. A. Tolerable rate.
AICPA.990525AUD-AU B. Allowance for sampling risk.
C. Risk of assessing control risk too low.
For which of the following matters should an auditor obtain written management representations? A. D. Sample size.
Management’s cost-benefit justifications for not correcting internal control weaknesses.
B. Management’s knowledge of future plans that may affect the price of the entity’s stock. AUD Question 19.
C. Management’s compliance with contractual agreements that may affect the financial statements. AICPA.900543AUD-AU
D. Management’s acknowledgment of its responsibility for employees’ violations of laws.
An auditor is testing internal control procedure
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