The final step of an audit is issuing the audit __________.

a) Recommendations
b) Engagement
c) Letter
d) Report
e) Risk
Tests of controls are performed to determine whether key controls operate __________.
a) correctly
b) fairly
c) properly
d) effectively
e) efficiently
__________ risk is the risk of material misstatement of an assertion without considering internal
control.
a) Business
b) Substantive
c) Control
d) Inherent
e) Audit
__________ assessment procedures are performed when obtaining an understanding of the
client.
a) Engagement
b) Risk
c) Planning
d) Audit
e) Opinion
Audit __________ begins with determining the requirements for the engagement.
a) strategy
b) reporting
c) planning
d) risk
e) opinions
An audit report indicates that the audit evidence we have obtained is __________ to provide a
basis for the opinion.
a) adequate
b) fair
c) sufficient
d) correct
e) enough
An opinion indicates that the financial statements are presented __________.
 a) fairly
b) reasonably
c) adequately
d) appropriately
e) correctly
An auditor's report includes an introduction, the auditor's and management's responsibility, and
a(n) __________.
a) financial position
b) opinion
c) cash flow
d) communication
e) solution
The auditor's report is the __________ of an audit.
a) byproduct
b) correspondence
c) end product
d) solution
e) starting point
__________ is (are) responsible for the financial statements.
a) The AICPA
b) Auditors
c) The PCAOB
d) Management
e) The Audit Committee
A pro forma financial statement is
a) a financial statement for past periods.
b) a projected or budgeted financial statement.
c) presented for the form but contains no dollar amounts.
d) a statement of planned production.
The FIFO method of process costing will produce the same cost of goods transferred out dollar
amount as the weighted average method when
a) the goods produced are homogeneous.
b) there is no beginning Work in Process Inventory.
c) there is no ending Work in Process Inventory.
d) beginning and ending Work in Process Inventories are each 50 percent complete.