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An auditor concludes that a substantive auditing procedure considered necessary during the prior years
audit was omitted and there are persons currently relying on the auditors report. The auditor most likely
would promptly apply the omitted procedure if
The omission of the procedure impairs the auditors present ability to support the previously expressed
opinion
An auditor is considering whether the omission of a substantive procedure considered necessary at the
time of an audit may impair the auditors present ability to support the previously expressed opinion. The
auditor need not apply the omitted procedure if the
Results of other procedures that were applied tend to compensate for the procedure omitted.
An auditor most likely would modify an unqualified opinion if the entitys financial statements include a
note on related party transactions
Stating that a particular related party transaction occurred on terms equivalent to those that would have
prevailed in an arms-length transaction.
An auditor searching for related party transactions should obtain an understanding of each subsidiarys
relationship to the total entity because
The business structure may be deliberately designed to obscure related party transactions.
An auditor who uses the work of a specialist may refer to and identify the specialist in the auditors report
if the
Auditor expresses a qualified opinion or an adverse opinion related to the work of the specialist.
An auditor who uses the work of a specialist may refer to the specialist in the auditors report if the
Auditor adds an explanatory paragraph to an unqualified opinion emphasizing a matter resulting from the
specialists findings.
An internal auditor would least likely provide direct assistance to the auditor in
As part of the audit of fair value measurements and disclosures (FVMD), an auditor may need to test the
entitys significant assumptions. In these circumstances, the auditor should
Evaluate whether the assumptions individually and as a whole form a reasonable basis for the FVMD.
For which of the following judgments may an independent auditor share responsibility with an entitys
internal auditor who is assessed to be both competent and objective?
NO & NO
Hill Corporation has hired Jones, a CPA, to audit its financial statements for year end. Jones, when
searching for related party transactions, should seek information to obtain an understanding about each
of Hills subsidiarys relationships because
Hills business structure might be designed in such a way as to deliberately obscure related party
transactions.
If the independent auditors decide that it is efficient to consider how the work performed by the internal
auditors may affect the nature, timing, and extent of audit procedures, they should assess the internal
auditors
In connection with the audit of financial statements by an independent auditor, the client suggests that
members of the internal audit staff be used to minimize audit costs. For which of the following tasks may
the independent auditor most appropriately request direct assistance from the internal audit staff?
Preparation of schedules for negative accounts receivable responses.
In evaluating an entitys accounting estimates, one of the auditors objectives is to determine whether the
estimates are
Susceptible to bias.
In using the work of a specialist, an auditor may refer to the specialist in the auditors report if, as a result
of the specialists findings, the auditor
Adds an explanatory paragraph to the auditors report to emphasize an unusually important subsequent
event
Six months after expressing an unqualified opinion on audited financial statements, an auditor discovered
that the engagement personnel failed to confirm several of the clients material accounts receivable
balances. The auditor should first
Assess the importance of the omitted procedures to the auditors ability to support the previously
expressed opinion.
Considers that management bases its judgment on both subjective and objective factors.
Under the International Standards on Auditing, when would an auditor seek the permission of a
specialist?
When the work of an expert results in a modified report and there is a reference to the experts work in
the report.
When assessing the competence of the internal auditors, an independent CPA should obtain information
about the
When one party has the ability to significantly influence the management or operating policies of the other
to the extent that one of the transacting parties might be prevented from fully pursuing its separate
interests, the parties are related for purposes of AU 334. Which of the following is not usually regarded as
a party related to a firm?
A governmental unit receiving significant tax payments from the firm.
When using the work of a specialist, an auditor may refer to and identify the specialist in the auditors
report if the
Which of the following events most likely would indicate the existence of related parties?
Which of the following is a false statement about the use of the internal auditors work by the auditor?
The ISAs do not allow the auditor to use the work of the internal auditor.
Which of the following most likely would indicate the existence of related parties?
Which of the following procedures would an auditor ordinarily perform first in evaluating managements
accounting estimates for reasonableness?
The auditors objective is to evaluate whether accounting estimates are reasonable in the circumstances.
Which of the following statements is correct concerning an auditors use of the work of a specialist?
The work of a specialist who is related to the client may be acceptable under certain circumstances.
The audit procedures directed toward identifying related party transactions should include considering
whether transactions are occurring but are not being given proper accounting recognition.