國際雙語審計第三章練習題資料

1、CHAPTER 3 Note to Instructors: Unless otherwise indicated in the text of a question, please assume that a question applies to audits of public and private companies. Questions that relate only to public- company matters will be noted by the phrase (Public) beside the question number.Multiple-Choice

2、Questions1.Auditing standards require that the audit report must be titled and that the title must: easya.include the word “independent.”ab.indicate if the auditor is a CPAc.indicate if the auditor is a proprietorship, partnership, or incorporated.d.not include any discriminatory language.2.easyTo e

3、mphasize the fact that the auditor is independent, the addressee of the audit report is usually not:aa.the companys management.b.the stockholders of the client company.c.the board of directors of the client company.d.either b or c.3.The purpose of the introductory paragraph in the standard unqualifi

4、ed report is: easya.to identify the entity that was audited.db.to identify the financial statements that were audited and the dates and time periods covered by the report.c.to communicate the responsibilities of management in preparing the financial statements and to clarify the respective roles of

5、management and the auditor.d.all of the above.4.The scope paragraph of the standard unqualified audit report states that the audit is designed to: easya.discover all errors and/or irregularities.db.discover material errors and/or irregularities.c.conform to generally accepted accounting principles.d

6、.obtain reasonable assurance whether the statements are free of material misstatement.5.easyWhich of the following is not an essential condition for issuing the standard unqualified audit opinion?ca.All statements are included in the financial statements.b.The general standards have been followed in

7、 all respects.c.The financial statements are prepared in accordance with regulatory principles.d.Sufficient appropriate audit evidence has been accumulated.6.The audit report date on a standard unqualified report indicates:easya.the last day of the fiscal period.db.the date on which the financial st

8、atements were filed with the Securities and Exchange Commission.c.the last date on which users may institute a lawsuit against either client or auditor.d.the last day of the auditors responsibility for the review of significant events that occurred subsequent to the date of the financial statements.

9、7.easy dAs a result of managements refusal to permit the auditor to physically examine inventory, the auditor has not accumulated sufficient appropriate evidence to conclude whether financial statements are stated in accordance with GAAP. The auditor must depart from the unqualified audit report bec

10、ause:a.the financial statements have not been prepared in accordance with GAAP.b.the scope of the audit has been restricted by circumstances beyond either the clients or auditors control.c.the auditor has lost independence.d.the scope of the audit has been restricted.8.An adverse opinion is issued w

11、hen the auditor believes:easya.some parts of the financial statements are materially misstated or misleading.db.the financial statements would be found to be materially misstated if an investigation were performed.c.the auditor is not independent.d.the overall financial statements are so materially

12、misstated that they do not present fairly the financial position or results of operations and cash flows in conformity with GAAP.9.A disclaimer of opinion may be issued in which of the following instances?easya.The auditor has doubts related to an entitys ability to continue as a going concern. db.T

13、here are highly material misstatements in the financial statements.c.The auditors scope has been restricted due to circumstances beyond the clients control.d.A disclaimer may be issued for circumstances discussed in a and c.10.Whenever an auditor issues a standard unqualified audit report, the impli

14、cation is the auditor: easya. does not know if the financial statements are presented fairly in accordance with GAAP. db. does not believe the financial statements are presented fairly in accordance with GAAP.c. believes the financial statements to be presented fairly in accordance with GAAP except

15、for a specific aspect of them.d. believes the financial statements are presented fairly in accordance with GAAP.11.easyIf a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods, it is appropriate to i

16、ssue a(n):ca.adverse opinion.b.qualified opinion.c.unqualified opinion.d.disclaimer of opinion.12. (Public) easyWhenever an auditor issues an audit report for a public company, the auditor can choose to issue a report in which of the following forms?ca.A combined report on financial statements and i

17、nternal control over financial reporting.b.Separate reports on financial statements and internal control over financial reporting.c.Either a or b.d.Neither a nor b.13.easyWhen determining whether an exception is “highly material,” the extent to which the exception affects different elements of the f

18、inancial statements must be considered. This concept is called:ba.materiality.b.pervasiveness.c.financial analysis.d.ratio analysis.14.easyWhen the auditor believes a companys financial statements are misleading because they were not prepared in conformity with GAAP, the auditor must issue a(n):da.q

19、ualified opinion.b.adverse opinion.c.disclaimer of opinion.d.qualified or an adverse opinion, depending on materiality.15. (Public) easyIf an auditor performs an audit of a public company, the scope paragraph should make reference to which standards?ca.Accounting standards.b.Generally accepted audit

20、ing standards.c.Standards issued by the PCAOB (U.S.).d.Any of the above standards.16.easyIf an auditor performs an audit of a private company, the scope paragraph should make reference to which standards?ba.Accounting standards.b.U.S. generally accepted auditing standards.c.Standards issued by the P

21、CAOB (U.S.).d.Any of the above standards.17.easyThe only unqualified opinions which contain modified wording (excluding an explanatory paragraph) relate to:aa.the use of other auditors.b.material uncertainties.c.substantial doubt about continuing as a going concern.d.lack of consistent application o

22、f GAAP.18.easy cThe second standard of reporting requires the auditor to call attention to circumstances in which accounting principles have not been consistently observed in the current period relative to the preceding period. GAAP requires that changes in accounting principles be to a(n):a.more co

23、nservative principle.b.equal or better principle.c.preferable principle.d.principle allowed by the companys auditing firm.19.easyA CPA may wish to emphasize specific matters regarding the financial statements even though she intends to express an unqualified opinion. Normally, such explanatory infor

24、mation is:ca.included in the scope paragraph.b.included in the opinion paragraph.c.included in a separate paragraph in the report.d.included in the introductory paragraph.20.easy d21.mediumAn auditor who issues a qualified opinion because she was unable to obtain sufficient appropriate evidence shou

25、ld describe the limitations in an explanatory paragraph. The auditor should also refer to the limitation in the:ScopeOpinionNotes to theparagraphparagraphfinancial statementsa.YesNoYesb.YesYesYesc.NoYesNod.YesYesNoWhen the auditor evaluates the effect of a change in accounting principle, the materia

26、lity of the change should be evaluated based on:ba.the prior years presented.b.the current year effect of the change.c.whatever basis the auditor considers appropriate.d.the effect on total assets.22.mediumConditions requiring a departure from an unqualified audit report include all but which of the

27、 following?ba. Management refused to allow the auditor to confirm significant accounts receivable for which there were no alternative procedures performed.b. Management decided not to allow the auditor to confirm significant accounts receivable, but the auditor obtained sufficient appropriate eviden

28、ce by examining subsequent cash receipts.c. The audit partners dependent child received a gift of 100 shares of a clients stock for her birthday from a grandparent.d. Management has determined that fixed assets should be reported in the balance sheet at their replacement values rather than historica

29、l costs. The auditors do not concur.23.The introductory paragraph of the standard audit report states that the financial statements are: mediuma.the responsibility of the auditor.bb.the responsibility of management.c.the joint responsibility of management and the auditor.d.none of the above.24.mediu

30、mThe introductory paragraph of the standard audit report states that the financial statements and the opinion expressed about those statements are:da.the responsibility of the auditor.b.the responsibility of management.c.the joint responsibility of management and the auditor.d.none of the above.25.T

31、he introductory paragraph of the standard audit report states that the auditor is: mediuma.responsible for the financial statements and the opinion on them.cb.responsible for the financial statements.c.responsible for the opinion on the financial statements.d.jointly responsible for the financial st

32、atements with management.26. (Public) mediumPCAOB Auditing Standard No. 2 requires the audit of internal control over financial reporting to be integrated with:aa.the audit of the financial statements.b.the quarterly review of financial information.c.the review of annual financial statements.d.none

33、of the above.27.medium dThe audit report indicates that (1) management is responsible for the content of the financial statements and (2) the auditor is responsible for evaluating the appropriateness of the accounting principles chosen by management. Which paragraph contains those statements?a.Both

34、are in the introductory paragraph.b.Both are in the scope paragraph.c.Both are in the opinion paragraph.d.None of the above are true.28.Which of the following is a false statement about the audit report?mediuma.The opinion paragraph is related to the first and fourth reporting standards.cb.The audit

35、or is required to state a conclusion about whether the company followed generally accepted accounting principles.c.The opinion paragraph may follow any form deemed appropriate by the auditor.d.The auditor should express an opinion about the financial statements taken as a whole.29.medium bIf the bal

36、ance sheet of a company is dated December 31, 2007, the audit report is dated February 8, 2008, and both are released on February 15, 2008, this indicates that the auditor has searched for subsequent events that occurred up to:a.December 31, 2007.b.February 8, 2008.c.February 15, 2008.d.none of thes

37、e.30.Both disclaimers and adverse opinions are used:mediuma.only when a condition is highly material.ab.whether the condition affecting the financial statements is material or not.c.regardless of the auditors independence.d.regardless of clients choice of a non-GAAP accounting method.31.The least se

38、vere type of audit report for disclosing departures from GAAP is the: mediuma.adverse opinion.cb.disclaimer of opinion.c.qualified opinion.d.report on unaudited financial statements.32. (Public) mediumA combined report on financial statements and internal control over financial reporting includes al

39、l but which of the following types of paragraphs?ba.Inherent limitations paragraph.b.Description paragraph.c.Opinion paragraph.d.Each of the above paragraphs is included.33.Whenever an auditor issues a qualified opinion, the implication is that the auditor: mediuma.does not know if the financial sta

40、tements are presented fairly.db.does not believe the financial statements are presented fairly.c.believes the financial statements are presented fairly.d.believes the financial statements are presented fairly “except for” a specific aspect of them.34.The necessity to issue a disclaimer of opinion ma

41、y arise because of: mediuma.a severe limitation on the scope of the audit.cb.a lack of independence between the auditor and client.c.either a or b.d.neither a nor b.35.Audit report language may be modified for which of the following conditions? mediuma.Lack of consistent application of GAAP.cb.Subst

42、antial doubt about continuing as a going concern.c.Reports involving other auditors.d.Emphasis of a matter.36.mediumWhen the auditor determines the financial statements are fairly stated and then determines that he is not independent, the auditor should issue:ba.an adverse opinion.b.a disclaimer of

43、opinion.c.either a qualified opinion or an adverse opinion.d.either a qualified opinion or an unqualified opinion with modified wording.37.If the auditor lacks independence, a disclaimer of opinion must be issued: mediuma.if the client requests it.db.only if it is highly material.c.only if it is mat

44、erial but not highly material.d.in all cases.38.mediumMisstatements must be compared with some measurement base before a decision can be made about materiality. A commonly accepted measurement base includes: income.b.total assets.c.working capital.d.all of the above.39.mediumWhen comparing mis

45、statements with a measurement base, the auditor must consider the pervasiveness of the misstatement. An example of a pervasive misstatement is a(n):aa.understatement of inventory.b.understatement of retained earnings caused by a miscalculation of dividends payable.c.misclassification of notes payabl

46、e as a long-term liability when it should be current.d.misclassification of salary expense as a selling expense when it should be allocated equally to both selling and administrative expense.40.mediumThe dollar amount of some misstatements cannot be accurately measured. For example, if the client we

47、re unwilling to disclose an existing lawsuit, the auditor must estimate the likely effect on: income.b.users of the financial statements.c.the auditors exposure to lawsuits.d.managements future decisions.41.mediumOf the two major categories of scope restrictions, those caused by a client and t

48、hose caused by conditions beyond the control of either a client or auditor, the effect on the auditors report is:aa.the same for either.b.more serious for client-imposed restrictions.c.more serious for conditions beyond the control of a client or auditor.d.negligible.42.Whenever there is a scope res

49、triction, the appropriate response is to issue a(n): mediuma.disclaimer of opinion.db.adverse opinion.c.qualified opinion.d.unqualified report, a qualification of scope and opinion, or a disclaimer, depending on materiality.43.mediumWhich of the following is least likely to cause uncertainty about t

50、he ability of an entity to continue as a going concern?aa.A clients lawsuit against another company which claims the other company has infringed on its patent.b.Loss of major customers.c.Significant recurring operating losses.d.Working capital deficiencies.44.medium dThe client has presented all req

51、uired financial statements with the exception of the statement of cash flows. The auditor has completed the audit and is satisfied that all other statements are presented fairly. The auditor:a.may issue either an unqualified or a qualified opinion.b.must issue an adverse opinion with “except for” in

52、 the opinion paragraph.c.may issue an unqualified opinion.d.must issue a qualified opinion with “except for” in the opinion paragraph.45.When a disclaimer is issued because the auditor lacks independence: mediuma.no report title is included on the report.db.a one-paragraph audit report is issued.c.t

53、he only reason cited for issuing the disclaimer is the lack of independence.d.all of the above are correct.46.When an auditor issues a qualified report, an adverse report, or a disclaimer, the auditor: mediuma.has not performed a satisfactory audit.cb.is not satisfied that the financial statements a

54、re presented fairly.c.either a or b.d.none of these.47.medium dWhen a client has not applied GAAP consistently from the prior year to the current year, the auditor does not concur with the appropriateness of the change, and the change in GAAP has a material effect on the financial statements, the au

55、ditor should issue a(n):a.disclaimer.b.adverse opinion.c.unqualified opinion.d.qualified opinion.48.mediumMatters for which an auditor may believe an explanatory paragraph should be added to the audit report include all but which of the following?ba.The existence of significant related party transactions.b.Material uncertainties not disclosed in the footnotes.c.Impor