Auditing Chapter Two

(TCO 4) To succeed in an action against the attendee, the client must be able to show that Student swear out the auditor was droolulent. the auditor was grossly negligent. there was a indite hire. there is a close causal connection between the auditors behavior and the damages suffered by the client. teacher Explanation rapscallion 121 Points certain 2 of 2 Comments 2. suspicion (TCO 4) The principal issue to be resolve in cases involving alleged negligence is usually Student arrange the amount of the damages suffered by plaintiff. whether to implement punitive damages on defendant. he level of care exercised by the CPA. whether defendant was involved in fraud. teacher Explanation scallywag 119 Points Received 2 of 2 Comments 3. Question (TCO 4) A third-party beneficiary is hotshot which Student Answer has failed to establish legal standing before the court does not have privity of contract and is unknown to the contracting parties. does not have privity of contract, bu t is known to the contracting parties and intended to benefit infra the contract. whitethorn establish legal standing before the court after a contract has been consummated. instructor Explanation rapscallion 121 Points Received 2 of 2Comments 4. Question (TCO 4) The objective of the ordinary audit of financial statements is the expression of an opinion on Student Answer the fairness of the financial statements. the true statement of the financial statements. the accuracy of the annual report. the accuracy of the annual report. Instructor Explanation Page 142 Points Received 2 of 2 Comments 5. Question (TCO 4) The responsibility for adopting sound accounting policies and maintaining adequate internal control rests with the Student Answer board of directors. corporation management. financial statement auditor. companys internal audit departmentInstructor Explanation Page 143 Points Received 2 of 2 Comments 6. Question (TCO 3) Which of the following statements is most correct regarding errors and fraud? Student Answer An error is unintentional, whereas fraud is intentional. Frauds occur more often than errors in financial statements. Errors are always fraud and frauds are always errors. Auditors have more responsibility for finding fraud than errors. Instructor Explanation Page 145 Points Received 2 of 2 Comments 7. Question (TCO 3) Which of the following is not one of the conditions for fraud depict in SAS No. 99? Student Answer Attitudes/rationalization.Opportunities. Incentives/pressures. Each of the above is a condition for fraud. Instructor Explanation Page 337 Points Received 2 of 2 Comments 8. Question (TCO 3) Fraudulent financial reporting may be accomplished through the manipulation of Student Answer assets. liabilities. revenues. all of the above. Instructor Explanation Page 336 Points Received 2 of 2 Comments 9. Question (TCO 3) Which of the following is a factor that relates to incentives to misappropriate assets? Student Answer Signific ant accounting estimates involving subjective perspicaciousnesss. Significant personal financial obligations.Managements practice of making overly truculent forecasts. High turnover of accounting, internal audit and information technology staff. Instructor Explanation Page 339 Points Received 2 of 2 Comments 10. Question (TCO 3) Auditors may identify conclusions during fieldwork that change or support a judgment about the initial sagacity of fraud risk. Which of the following conditions should alert an auditor about the initial assessment? Student Answer Missing or conflicting evidence. Discrepancies in the accounting records. Unusual relationships between the auditor and management. All of the above.