Name: ______________________________________
Permit No.: ______________
Final Examination
Select and encircle the best answer for each of
the following questions.
1. Broadly defined, the subject matter of any audit
consists of
a)Financial statements
b) Economic data
c) Assertions
d) Operating data
2. The third standard of field work states that
sufficient competent evidential matter may in part
be obtained through the following methods
except
a) Inspection
b) Observation
c) Confirmation
d) Reconciliation
3. If an auditor believes that material error or
fraud exist, the auditor should
a) Consider the implications and discuss the
matter with appropriate levels of management
b) Make the investigation necessary to determine
whether errors or fraud have in fact occurred
c) Request that management investigate whether
errors or fraud have in fact occurred
d) Consider whether errors or fraud where the
result of employee's failure to comply with specific
controls
4. Which of the following is not normally
performed in the pre-planning or pre-engagement
phase?
a) Deciding whether to accept or reject an audit
engagement
b) Inquiring from predecessor auditor
c) Preparing an engagement letter
d) Making a preliminary estimate of materiality
Auditing and Assurance Principles
Date: _____________
5. On the basis of the audit evidence gathered and
evaluated, an auditor decides to increase the
assessed level of control risk from that originally
planned. To achieve an overall audit risk level that
is substantially the same as the planned audit risk
level, the auditor would
a) Decrease substantive testing
b) Increase inherent risk
c) Decrease detection risk
d) Increase materiality levels
6. An effective internal control
a) Cannot be circumvented by management
b) Can reduce the cost of an external audit
c) Can prevent collusion among employees
d) Eliminates risks and potential loss to the
organization
7. In auditing through a computer, the test data
method is used by auditors to test the
a) Accuracy of input data
b) Validity of the output
c) Procedures contained within the program
d) Normalcy of distribution of test data
8. An auditor's working papers will generally be
least likely to include documentation showing how
the
a) Client's schedules were prepared
b) Engagement had been planned
c) Client's system of internal control had been
reviewed and evaluated
d) Unusual matters were resolved
9. Which of the following sampling methods
would be most appropriate in performing tests of
controls over authorization of cash disbursements
a) Attributes
b) Variables
c) Ratio
d) Stratified
10. Analytical procedures used in the overall
review stage of an audit generally include
a) Considering unusual or unexpected account
balances that were not previously identified
b) Performing test of transactions to corroborate
management's financial statement assertions
c) Gathering evidence concerning account
balances that have not changed from the prior
year
d) Re-testing control procedures that appeared to
be ineffective during the assessment of control
risk
11. Results of the financial statement audit are
communicated to users through
a) Financial statement
b) Written management assertion
c) Audit report
d) None of the above
12. What is the primary difference between
financial reporting risk and audit risk?
a) The application of accounting principles
b) Responsibilities of the respective parties
involved
c) Demands of users of financial statements
d) Risks of being sued by third parties
13. Relationship between control risk and
detection risk is ordinarily
a) Parallel
b) Inverse
c) Direct
d) Equal
14. A representation letter issued by a client
a) Is essential for the preparation of the audit
program
b) Is a substitute for testing
c) Does not reduce the auditor's responsibility
d) Reduces the auditor's responsibility only to the
extent that it is relied upon
15. The recruitment of senior management for an
assurance client, such as those in a position to
affect the subject of the assurance engagement
may least likely create
a) Self-interest threat
b) Advocacy threat
c) Intimidation threat
d) Familiarity threat
16. In reviewing the audit work performed, the
engagement partner
a) Must review all audit documentation
b) Need not review all audit documentation, but
may do so
c) Need not review all audit documentation
d) Must ask the staff performing the audit work to
sign the audit report
17. The independent auditor lends credibility to
client’s financial statements by
a) Maintaining a clear-cut distinction between
management’s representations and the auditor’s
representation
b) Testifying under oath about client’s financial
statements
c) Stating in the auditor’s management letter that
the examination was made in accordance with
generally accepted auditing standards
d) Attaching an auditor’s opinion to the client’s
financial statements
18. The most difficult type of misstatement to
detect is fraud based on
a) The over-recording of transactions
b) The non-recording of transactions
c) Recorded transactions in subsidiaries
d) Related party receivables
19. Assuming a recurring audit, in which of the
following situations would the auditor be unlikely
to send a new engagement letter to the client?
a) A recent change in partner and/or staff
involved in the audit engagement
b) A change in the terms of engagement
c) A recent change of client management
d) A significant change in the nature or size of the
client's business
20. When an auditor expresses an adverse opinion
he/she should disclose the substantive reasons for
such an opinion in an explanatory paragraph
a) Within the notes to the financial statements
b) Preceding the opinion paragraph
c) Following the opinion paragraph
d) Preceding the introductory paragraph
21. Tolerable error means
a) An error that arises from an isolated event that
has not recurred other than on specifically
identifiable occasions and is therefore not
representative of errors in the population
b) An error that the auditor expects to be present
in the population
c) The maximum error in a population that the
auditor is willing to accept
d) The possibility that the auditor's conclusion,
based on a sample may be different from the
conclusion reached if the entire population were
subjected to the same audit procedure
22. Examples of events or conditions, which
individually or collectively, may cast significant
doubt about the going concern assumption
include the following except
a) Net liability or net current liability position
b) Change from credit to cash-on-delivery
transactions with suppliers
c) Labor difficulties or shortages of important
supplies
d) Compliance with capital or other statutory
requirements
23. Which of the following procedures is not
included in a review engagement on a nonpublic
entity
a) Inquiries of management
b) Inquiries regarding events subsequent to the
balance sheet date
c) Any procedures designed to identify
relationships among data that appear to be
unusual
d) A study and evaluation of internal control
structure
24. In planning the audit engagement, the auditor
should consider each of the following except
a) The kind of opinion that will likely be given
b) Matters relating to the entity’s business and the
industry in which it operates
c) The entity’s accounting policies and procedures
d) Anticipated levels of control risk and materiality
25. What assurance is provided by the practitioner
in an agreed-upon procedures engagement?
a) Reasonable
b) Absolute
c) Moderate
d) No assurance
26. To test for unsupported entries in the journal,
the direction of audit testing should be from the
a) Journal entries
b) Ledger entries
c) Original source documents
d) Externally generated documents
27. For good internal control, the purchasing
department should not be responsible for
a) Authorizing the acquisition of goods
b) Finding the lowest cost vendor
c) Reviewing the vendors catalog descriptions and
prices for standardized items
d) Designing the purchase order form
28. Involves tracing a few transactions through the
accounting system
a) Test of controls
b) Walk-through test
c) Analytical procedures
d) Substantive procedures
29. This exists, when other information, not
related to matters appearing in the financial
statements, is incorrectly stated or presented
a) Material inconsistency
b) Material misstatement
c) Material misstatement of fact
d) Material error affecting the other information
30. Who appoints the members of the Board of
Accountancy
a) The chairman of BOA
b) The president of the Philippines
c) The chairman of the PRC
d) The president of PICPA
31. An auditor is required to obtain an
understanding of the entity's business, including
business cycles and reasons for business
fluctuations. What is the audit purpose most
directly served by obtaining this understanding?
a) To enable the auditor to accurately identify
significant deficiencies in internal control
b) To assist the auditor in accurately interpreting
information obtained during an audit
c) To allow the auditor to more accurately
perform tests of controls
d) To decide whether it will be necessary to
perform analytical procedures
32. Which of the following is not true about the
report release date?
a) It is defined as the date after which existing
documentation must not be deleted, and additions
to the documentation file must be documented as
such
b) It is often the date on which the report is
delivered to the client
c) It is the date on which the auditor grants the
client permission to use the report
d) It is used to define the beginning of the
retention period
33. An auditor should not issue a report on
a) Quarterly financial information
b) Internal control
c) Management performance
d) The achievability of forecasts
34. Which of the following procedures would an
auditor most likely perform to obtain evidence
about the occurrence of subsequent events?
a) Confirming a sample of material accounts
receivable established after year-end
b) Comparing the financial statements being
reported on with those of the prior period
c) Investigating personnel changes in the
accounting department occurring after year-end
d) Inquiring as to whether any unusual
adjustments were made after year-end
35. To which of the following matters would
materiality limits not apply when obtaining written
client representations?
a) Violations of state labor regulations
b) Disclosure of line-of-credit arrangements
c) Information about related party transactions
d) Instances of fraud involving management
36. Who ultimately determines the scope of the
audit?
a) The auditor
b) The client
c) Both a and b
d) Neither a nor b
37. Financial statements prepared in accordance
with a financial reporting framework designed to
meet the financial information needs of specific
users are referred to as
a) Special purpose financial statements
b) Special purpose framework
c) General purpose financial statements
d) Specific purpose financial statements
38. An auditor plans to apply substantive tests to
the details of asset and liability accounts as of an
interim date rather than as of the balance sheet
date. The auditor should be aware that this
practice
a) Eliminates the use of certain statistical sampling
methods that would otherwise be available
b) Presumes that the auditor will reperform the
tests of the balance sheet date
c) Should be especially considered when there are
rapidly changing economic conditions
d) Potentially increases the risk that errors that
exist at the balance sheet date will not be detected
39. Close family include the following, except
a) Parent
b) Sibling
c) Non-dependent child
d) Spouse
40. A computer-assisted audit technique that is
most likely to be effective in a continuous auditing
environment is
a) Parallel simulation
b) Controlled reprocessing
c) Embedded audit modules
d) Transaction tripping
41. Which of the following is not prohibited by
the Code of Professional Ethics for CPAs?
a) Advertising and solicitation of clients
b) Payment of commissions to obtain a client
c) Receiving a contingent fee on a tax case before
the Bureau of Internal Revenue
d) Offering employment to a staff member of
another CPA without first informing the CPA
42. The management's assessment of the entity's
ability to continue as a going concern covers a
period of
a) Not longer than 12 months from balance sheet
date
b) At least 12 months from the balance sheet date
c) Not longer than 12 months from the date of
audit report
d) At least 12 months from the date of audit
report
43. To obtain evidential matter about control risk,
an auditor selects tests from a variety of
techniques including
a) Inquiry
b) Analytical procedures
c) Calculation
d) Confirmation
44. The need for independent audits of financial
statements can be attributed to all of the following
conditions except
a) Remoteness
b) Consequence
c) Complexity of subject matter
d) Validity
45. After issuing a report an auditor includes that
an auditing procedure considered necessary at the
time of the examination was omitted from the
examination. The auditor should first
a) Undertake to apply the omitted procedure or
alternative procedures that would provide a
satisfactory basis for the auditor's opinion
b) Assess the importance of the omitted
procedure to the auditor's ability to support the
opinion expressed on the financial statements
taken as a whole
c) Notify the audit committee or the board of
directors that the auditor's opinion can no longer
be relied upon
d) Review the results of other procedures that
were applied to compensate for the one omitted
or to make its omission less important
46. This quality control element requires a CPA
firm to establish policies and procedures to
provide it with reasonable assurance that
engagements are performed in accordance with
professional standards and regulatory and legal
requirements, and that the firm or the engagement
partner issue reports that are appropriate in the
circumstances
a) Ethical requirements
b) Engagement performance
c) Monitoring
d) Human resources
47. Communication with a predecessor auditor is
initiated by
a) Management
b) The successor auditor
c) The audit committee of the board of directors
d) The chair of the board of directors
48. In which of the following may confidential
information not be disclosed?
a) To comply with the quality review of a member
body or professional body
b) To submit evidence in the course of legal
proceedings
c) Acquiring information in the course performing
professional services and use that information for
personal advantages
d) When consent to disclose information is given
by the client
49. The auditor should perform the following risk
assessment procedures to obtain an understanding
of the entity and its environment, including its
internal control, except
a) Inquiries of management and others within the
entity
b) Reperformance
c) Analytical procedures
d) Observation and inspection
50. The auditor should determine overall
responses to address the risks of material
misstatement at the financial statement level. Such
responses most likely include
a) Assigning less experienced staff
b) Performing predictable further audit
procedures
c) Performing substantive procedures at an
interim date instead of at period end
d) Emphasizing to the audit team the need to
maintain professional skepticism in gathering and
evaluating audit evidence
51. The need for assurance services arises for all
of the following reason except
a) Potential bias in providing information
b) Closeness between a user and the organization
c) Complexity of the processing systems
d) Remoteness between a user and the
organization
52. Which one of the following is not a key
attribute needed to perform assurance?
a) Subject matter knowledge
b) Independence
c) Established criteria or standards
d) Accounting skills
53. Which one of the following is not part of the
attest process?
a) Providing the accuracy of the books and
records
b) Gathering evidence about assertions
c) Evaluating evidence against objective criteria
d) Communicating the conclusions reached
54. Users of the audit report can reasonably
expect the audited financial statements to be
a) Complete and contain many of the important
financial disclosures
b) Presented fairly according to the substance of
GAAP
c) Free from all errors
d) All of the above
55. Which of the following services is the broadest
and most inclusive
a) Audit
b) Attestation
c) Assurance
d) Compliance
56. One reason why an auditor makes an analytical
review of the client’s operations is to identify
a) Improper separation of accounting and other
financial duties
b) Weakness of a material nature in the system of
internal accounting control
c) Unusual transactions
d) Non-compliance with prescribed control
procedures
57. Analytical procedures used in planning an
audit should focus on identifying
a) Material weaknesses in the internal control
structure
b) The predictability of financial data from
individual transactions
c) The various assertions that are embodied in the
financial statements
d) Areas that may represent specific risk relevant
to audit
58. An integrated test facility (ITF) would be
appropriate when the auditor needs to
a) Trace a complex logic path through an
application system
b) Verify processing accuracy concurrently with
processing
c) Monitor transactions in an application system
continuously
d) Verify load module integrity for production
programs
59. The rotation of senior accounting personnel
can be regarded as a safeguard
a) Created by the profession
b) Within the client’s systems and procedures
c) In the work environment
d) Created within the business community
60. If certain forms are not consecutively
numbered
a) Systematic sampling may be appropriate
b) Selection of a random sample probably is not
possible
c) Stratified sampling should be used
d) Random number tables cannot be used
61. A cash shortage may be concealed by
transporting funds from one location to another
or by converting negotiable assets to cash.
Because of this, which of the following is vital?
a) Simultaneous confirmations
b) Simultaneous bank reconciliations
c) Simultaneous verification
d) Simultaneous surprise cash count
62. Which of the following is most likely to
indicate a significant deficiency relating to a
client's anti-fraud programs?
a) A broad scope of internal audit activities
b) A "whistle-blower" program that encourages
anonymous submissions
c) Audit committee passivity when conducting
oversight functions
d) Lack of performance of criminal background
investigations for likely customers
63. Which of the following is not an attestation
standard?
a) Sufficient evidence shall be obtained to provide
a reasonable basis for the conclusion that is
expressed in the report
b) The report shall identify the subject matter on
the assertion being reported on and state the
character of the engagement
c) The work shall be adequately planned and
assistants, if any, shall be properly supervised
d) A sufficient understanding of internal control
shall be obtained to plan the engagement
64. Proper segregation of functional
responsibilities calls for separation of the
functions of
a) Authorization, execution, and payment
b) Authorization, recording, and custody
c) Custody, execution, and reporting
d) Authorization, payment, and recording
65. Control risk should be assessed in terms of
a) Specific controls
b) Types of potential fraud
c) Financial statement assertions
d) Control environment factors
66. Which of the following is not a step in an
auditor's assessment of control risk?
a) Evaluate the effectiveness of internal control
with tests of controls
b) Obtain an understanding of the entity's
information system and control environment
c) Perform tests of details of transactions to detect
material misstatements in the financial statements
d) Consider whether controls can have a pervasive
effect on financial statement assertions
67. Which of the following procedures would an
auditor ordinarily perform first in evaluating
management's accounting estimates for
reasonableness?
a) Develop independent expectations of
management's estimates
b) Consider the appropriateness of the key factors
or assumptions used in preparing the estimates
c) Test the calculations used by management in
developing the estimates
d) Obtain an understanding of how management
developed its estimates
68. An entity's income statements were misstated
due to the recording of journal entries that
involved debits and credits to an unusual
combination of expense and revenue accounts.
The auditor most likely could have detected this
fraudulent financial reporting by
a) Tracing a sample of journal entries to the
general ledger
b) Evaluating the effectiveness of internal control
c) Investigating the reconciliations between
controlling accounts and subsidiary records
d) Performing analytical procedures designed to
disclose differences from expectations
69. Which of the following is most likely to be
unique to the audit work of CPAs as compared to
work performed by practitioners of other
professions?
a) Due professional care
b) Competence
c) Independence
d) Complex body of knowledge
70. Which of the following would an auditor most
likely use in determining the auditor's preliminary
judgment about materiality?
a) The anticipated sample size of the planned
substantive tests
b) The entity's annualized interim financial
statements
c) The results of the internal control questionnaire
d) The contents of the management
representation letter
71. Which of the following conditions identified
during fieldwork of an audit is most likely to affect
the auditor's assessment of the risk of
misstatement due to fraud?
a) Checks for significant amounts outstanding at
year-end
b) Computer generated documents
c) Missing documents
d) Year-end adjusting journal entries.
72. An auditor ordinarily uses a working trial
balance resembling the financial statements
without footnotes, but containing columns for
a) Cash flow increases and decreases
b) Audit objectives and assertions
c) Reclassifications and adjustments
d) Reconciliations and tick marks
73. The risk that an auditor will conclude, based
on substantive tests, that a material misstatement
does not exist in an account balance when in fact
such misstatement does exist is referred to as
a) Detection risk
b) Sampling risk
c) Non-sampling risk
d) Inherent risk
74. The usefulness of the standard bank
confirmation request may be limited because the
bank employee who completes the form may
a) Be unaware of all the financial relationships that
the bank has with the client
b) Not believe that the bank is obligated to verify
confidential information to a third party
c) Sign and return the form without inspecting the
accuracy of the client's bank reconciliation
d) Not have access to the client's cutoff bank
statement
75. A material weakness is a significant deficiency
(or combination of significant deficiencies) that
results in a reasonable possibility that a
misstatement of at least 'what amount will not be
prevented or detected?
a) An amount greater than zero
b) An amount greater than zero, but at least
inconsequential
c) An amount greater than inconsequential
d) A material amount
76. The existence of audit risk is recognized by the
statement in the auditor's standard report that the
auditor
a) Obtains reasonable assurance about whether
the financial statements are free of material
misstatement.
b) Assesses the accounting principles used and
also evaluates the overall financial statement
presentation.
c) Realizes some matters either individually or in
the aggregate, are important while other matters
are not important.
d) Is responsible for expressing an opinion on the
financial statements, which arc the responsibility
of management.
77. Which of the following services would be
most likely to be structured as an attest
engagement?
a) Advocating a client's position in tax matter.
b) A consulting engagement to develop a new
database system for the revenue cycle.
c) An engagement to issue a report addressing an
entity's compliance with requirements of specified
laws.
d) The compilation of a client's forecast
information.
78. Which of the following is ordinarily
considered to be a fraud risk factor?
a) The company's financial statements include a
number of last minute material adjustments.
b) Management regularly informs investors of
forecast information.
c) The company has experienced increasing
earnings over the previous five years.
d) The company's president is included as a
member of the board of directors.
79. Which is least likely to be a question asked of
client personnel during a walk-through in an audit
of the internal control of an issuer (public)
company?
a) What do you do when you find an error'?
b) Who is most likely to commit fraud among
your coworkers?
c) What kind of errors have you found?
d) Have you ever been asked to override the
process or controls?
80. An auditor who uses the work of a specialist
may refer to and identify the specialist ill the
auditor's report if the
a) Specialist is also considered to be a related
party.
b) Auditor indicates a division of responsibility
related to the work of the specialist.
c) Specialist's work provides the auditor greater
assurance of reliability.
d) Auditor expresses an "except for" qualified
opinion or an adverse opinion related to the work
of the specialist.
81. Which of the following statements concerning
evidential matter is correct?
a) Appropriate evidence supporting management's
assertions should be convincing rather than
merely persuasive.
b) Effective internal control contributes little to
the reliability of the evidence created within the
entity.
c) The cost of obtaining evidence is not an
important consideration to an auditor in deciding
what evidence should be obtained.
d) A client's accounting data cannot be considered
sufficient audit evidence to support the financial
statements.
82. Confirmations of accounts receivable address
which assertion most directly?
a) Completeness
b) Existence
c) Valuation
d) Classification
83. When performing a review of an issuer
company, which is least likely to be included in the
CPA's inquires of management members with
responsibility for financial and accounting
matters?
a) Subsequent events
b) Significant journal entries and other
adjustments
c) Communications with related parties
d) Unusual or complex situations affecting the
financial statements
84. The adverse effects of events causing an
auditor to believe there is substantial doubt about
an entity's ability to continue as a going concern
would most likely be mitigated by evidence
relating to the
a) Ability to expand operations into new product
lines in the future.
b) Feasibility of plans to purchase leased
equipment at Jess than market value.
c) Marketability of assets that management plans
to sell.
d) Committed arrangements to convert preferred
stock to long-term debt.
85. One reason that an auditor only obtains
reasonable, and not absolute, assurance that
financial statements are free from material
misstatement is
a) Comprehensive basis reporting
b) Employee collusion
c) Material misstatements
d) Professional skepticism
86. When an auditor concludes there is substantial
doubt about a continuing audit client's ability to
continue as a going concern for a reasonable
period of time, the auditor's responsibility is to
a) Issue a qualified or adverse opinion, depending
upon materiality, due to the possible effects on the
financial statements.
b) Consider the adequacy of disclosure about the
client's possible inability to continue as a going
concern.
c) Report to the client's audit committee that
management's accounting estimates may need to
be adjusted.
d) Reissue the prior year's auditors report and add
an explanatory paragraph that specifically refers to
"substantial doubt" and "going concern."
87. The accountant who is not independent may
perform which of the following types of
engagements?
a) Audit
b) Agreed-upon procedures
c) Compilation
d) Review
88. Which of the following should an auditor
obtain from the predecessor auditor prior to
accepting an audit engagement?
a) Analysis of balance sheet accounts
b) Analysis of income statement accounts
c) All matters of continuing accounting
significance
d) Facts that might bear on the integrity of
management
89. Which is least likely to be a response when an
auditor has obtained evidence indicating a risk of
material misstatement in the area of inventory?
a) Request inventory counts at the end of each
month.
b) Discuss questions of inventory valuation with
any other auditors involved with the audit.
c) Make oral inquiries of major suppliers in
addition to written confirmations.
d) Perform inventory observations on an
unannounced basis.
90. The independent auditor selects several
transactions in each functional area and traces
them through the entire system, paying special
attention to evidence about whether or not the
controls are in operation. This is an example of
a(n)
a) Application test
b) Test of controls
c) Substantive test
d) Test of a function
91. Accounting control procedures within
computer processing may leave no visible
evidence indicating that the procedures were
performed. In such instances, the auditor should
test these controls by
a) Making corroborative inquiries.
b) Observing the separation of duties of
personnel.
c) Reviewing transactions submitted for
processing and comparing them to related output.
d) Reviewing the run manual.
92. If information is for management's use only,
which of the following forms of CPA association
with financial information is most likely to result
in no report being issued?
a) An agreed-upon procedures engagement
b) An audit
c) A compilation
d) A review
93. In obtaining an understanding of a
manufacturing entity's internal control over
inventory balances, an auditor most likely would
a) Review the entity's descriptions of inventory
policies and procedures.
b) Perform test counts of inventory during the
entity's physical count.
c) Analyze inventory turnover statistics-to identify
slow-moving and obsolete items.
d) Analyze monthly production reports to identify
variances and unusual transactions.
94. When auditing merchandise inventory at year-
end, the auditor performs a purchase cutoff test to
obtain evidence that
a) All goods owned at year-end are included in the
inventory balance.
b) All goods purchased before year-end are
received before the physical inventory count.
c) No goods held on consignment for customers
are included in the inventory balance.
d) No goods observed during the physical count
are pledged or sold.
95. A company has changed its method of
inventory valuation from an unacceptable one to
one in conformity with generally accepted
accounting principles. The auditor's report on the
financial statements of the year of the change
should include
a) No reference to consistency.
b) A reference to a prior period adjustment in the
opinion paragraph.
c) An explanatory paragraph explaining the
change.
d) A justification for making the change and the
impact of the change on reported net income.
96. An abnormal fluctuation in gross profit that
might suggest the need for extended audit
procedures for sales and inventories would most
likely be identified in the planning phase of the
audit by the use of
a) Tests of transactions and balances
b) A preliminary review of internal control
c) Specialized audit programs
d) Analytical procedures
97. Which of the following statements best
describes the ethical standard of the profession
pertaining to advertising and solicitation?
a) All forms of advertising and solicitation are
prohibited.
b) There are no prohibitions regarding the manner
in which CPAs may solicit new business.
c) A CPA may advertise in any manner that is not
false, misleading, or deceptive.
d) A CPA may only solicit new clients through
mass mailings.
98. A note to the financial statements of a bank
indicates that all of the records relating to its
business operations are stored on magnetic disks;
and that there are no emergency back-up systems
or duplicate disks stored since the bank and their
auditors consider the occurrence of a catastrophe
to be remote. Based upon this, one would expect
the auditor's report to express
a) An adverse opinion
b) An "except for" opinion
c) An unqualified opinion
d) A qualified opinion
99. Which of the following is not typically
performed when accountants are performing a
review of the financial statements of a nonissuer?
a) Analytical procedures applied to financial data
b) Inquiries about significant subsequent events
c) Inquiries of the client's attorney about legal
matters
d) Obtaining an understanding of the accounting
principles followed by the client's industry
100. Which of the following is least likely to be a
restricted use report?
a) A report on financial statements prepared
following a comprehensive basis of accounting
other than generally accepted accounting
principles.
b) A report on internal control significant
deficiencies noted in an audit.
c) A required communication with the audit
committee.
d) A report on compliance with aspects of
contractual agreements.