Which of the following engagement planning procedures would most likely assist the auditor in identifying related-party transactions

Which of the following engagement planning procedures would most likely assist the auditor in identifying related-party transactions before the balance-sheet date?

a. inspecting communications with the client's legal counsel regarding recorded contingent liabilities
b. scanning the minutes for significant transactions with members of the board of directors
c. reviewing accounting records for recurring transactions occurring near year-end
d. interviewing internal auditors about their reporting responsibilities


Answer: b. scanning the minutes for significant transactions with members of the board of directors

Spreadsheet software would be most useful for which of the following audit activities?

a. drafting a planning memorandum
b. preparing a comparison of current-year expenses with those from the previous year
c. preparing an audit plan
d. testing internal controls over computerised accounting applications


Answer: b. preparing a comparison of current-year expenses with those from the previous year

Which of the following is an advantage of computer-assisted audit techniques (CAATs)?

a. the use of CAATs can be substituted for a relatively large part of the required testing
b. the software can be used for audits of clients that use differing computer equipment and file formats
c. the use of CAATs has reduced the need for the auditor to study input controls for computer-related procedures
d. the CAATs programs are well written in one computer language


Answer: b. the software can be used for audits of clients that use differing computer equipment and file formats

Which of the following communications is most likely to be written before the balance-sheet date?

Which of the following communications is most likely to be written before the balance-sheet date?

a. a report to the audit committee on the results of testing of internal control over cash receipts
b. an attorney's letter regarding contingent liabilities
c. confirmation letters to vendors confirming the amounts they owe to the client
d. an engagement letter


Answer: d. an engagement letter

Prior to accepting a new engagement, a public accounting firm should

a. assess the firm's resources to ensure that they are sufficient to permit them to accept the engagement
b. attempt to contact the predecessor auditors
c. all of the answers are correct
d. evaluate the integrity of management


Answer: c. all of the answers are correct

Which of the following procedures would most likely be performed during planning?

a. performing a search for unrecorded liabilities
b. reporting internal control deficiencies to the audit committee
c. surprise counts of the client's petty cash fund
d. identifying related parties


Answer: d. identifying related parties

When auditing Vandalay Jewelry, Costanza CPA was not familiar with the quality and cut of the company's precious jewel inventory

When auditing Vandalay Jewelry, Costanza CPA was not familiar with the quality and cut of the company's precious jewel inventory. To address this shortcoming, Costanza hired Benes, an expert in jewel valuation, to assist in the inventory valuation. Should Costanza refer to Benes's work in the audit report?

a. the auditors' report should mention that use of a specialist only when the specialist's findings affect the auditors' conclusion
b. the use of a specialist need not be mentioned if the auditors decide to take responsibility for the specialist's findings
c. yes, the auditors' report should mention that fact that a specialist was used
d. the auditors' report should mention the specialist only if Vandalay agrees with specialist's findings


Answer: a. the auditors' report should mention that use of a specialist only when the specialist's findings affect the auditors' conclusion

An audit engagement letter should normally include which of the following matters of agreement between the auditor and the client?

a. methods of statistical sampling the auditor will use
b. schedules and analyses to be prepared by the client's employees
c. client representations about availability of all minutes of meetings of the board of directors
d. specification of litigation in progress against the client


Answer: b. schedules and analyses to be prepared by the client's employees

Which of the following is not a benefit claimed for the practice of determining materiality in the initial planning stage of an audit?

a. avoiding the problem of doing too little work (under-auditing)
b. being able to fine-tune the audit work for effectiveness and efficiency
c. being able to decide early what type of audit opinion to issue
d. avoiding the problem of doing more work than necessary (over-auditing)


Answer: c. being able to decide early what type of audit opinion to issue

When planning an audit, which of the following is not a factor that affects auditors' decisions about the quantity,

When planning an audit, which of the following is not a factor that affects auditors' decisions about the quantity, type, and content of audit documentation?

a. the auditors' judgment about materiality
b. the auditors' judgment about their independence with regard to the client
c. the existence of new sales contracts important for the client's business
d. the auditors' need to document compliance with generally accepted auditing standards


Answer: b. the auditors' judgment about their independence with regard to the client

When initiating communications with predecessor auditors, prospective auditors should expect

a. to take responsibility for obtaining the client's consent for the predecessor to give information about prior audits
b. to obtain copies of some or all of the predecessor auditor's audit documentation
c. to conduct interviews with the partner and manager in charge of the predecessor public accounting firm's engagement
d. all of the answers are correct


Answer: d. all of the answers are correct

Generally accepted auditing standards require that auditors always prepare and use

a. the written time budgets and schedules for performing each audit
b. a written audit plan
c. a written client consent to discuss audit matters with prospective auditors
d. a written planning memorandum explaining the auditors' understanding of the client's business


Answer: b. a written audit plan

What is the Internet of Things?

What is the Internet of Things?

A. It is in accounting firms.
B. It is in factories.
C. Most people have it in their homes.
D. All of the above.
E. None of the above.


Answer: D. All of the above.

What does VPN stand for?

a. Virtual Proxy Network
b. Virtual Private Network
c. Virtual Public Network
d. Verified Private Network


Answer: b. Virtual Private Network

Which of the following is NOT a benefit of using a VPN?

a. Security
b. Vulnerable to hacking
c. Mobile
d. Scalable


Answer: b. Vulnerable to hacking

Which of the following is NOT associated with increased security from using a VPN?

Which of the following is NOT associated with increased security from using a VPN?

a. The tunneling protocol
b. Remote access
c. Required username and password
d. Utilizes the same database and client software


Answer: b. Remote access

What ways do Governments plan to replace lost tax revenue? 

a.Taxing digital blueprints?
b.Taxing intellectual property?
c.Niether A or B
d.Both A and B


Answer: d.Both A and B

What is the internet of things?

A. A networks sales system like ebay or amazon.
B. A from of networked communication to build communities like facebook or twitter
C. Connecting any device with an one or off switch to the internet.
D. None of the above


Answer: C. Connecting any device with an one or off switch to the internet.

How can the internet of things help the accounting profession?

How can the internet of things help the accounting profession?

A. It can provide an increase in efficiency via automation.
B. It can increase awareness in the profession of its obsolescence.
C. The technology can make nonelectric things more efficient.
D. All of the above.
E. None of the above


Answer: A. It can provide an increase in efficiency via automation.

What can you print? 

a. Cars
b. Food
c. Organs
d. All of the Above


Answer: d. All of the Above

What aspect of 3D printing are governments most concerned with? 

a. Taxation
b. Flattening of Supply Chains
c. Production of Counterfeits
d. Lack of Regulation


Answer: a. taxation