Author: Anonymous

23.  Under the recursive evidence-driven belief-based risk assessment view of the audit, detection risk – the risk that the auditor will not detect misstatements that could be material individually or when aggregated with other misstatements – is not relevant to the auditor’s planning of the nature, timing and extent of procedures to assess risks of material weaknesses in internal controls.

33.  Which of the following deficiencies alleged by the Securities & Exchange Commission in the Just-for-Feet case would not have involved deficiencies in evidence obtained of and from entity business states (EBS)?

10.  Fraud risk factors (e.g., red flags) are facts, circumstances or other information that suggest the risk of a material unintentional financial statement error may be elevated.

34.  Which of the following is not a standard inquiry required by SAS No. 84 (now AS 2610: Initial Audits—Communications Between Predecessor and Successor Auditors) dealing with predecessor–successor auditor communications .

49.  Which of the following statements is the best description of the auditor’s indirect evidence problem?

35.  Under the Private Securities Litigation Reform Act (PSLRA), recklessness is defined as:

47.  The Sarbanes-Oxley Act of 2002 included a provision in its Section 704 that required the SEC to study the causes of past alleged audit failures.  Which of the following causes of alleged audit failures was not included in the summary of Section 704 findings presented during this course?

45.  Which of the following procedures would not be useful when assessing the appropriateness of management’s conclusion that the legal isolation criterion (i.e., bankruptcy remoteness) has been met for a transfer of financial assets?

31.  Indicate which of the following statements is/are appropriate justification(s) for why all audit procedures are risk assessment procedures.

46.  What is the primary objective that an auditor hopes to accomplish by confirming a client’s accounts receivable using a sample of customer balances included in the account balance being audited?