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which is most likely to result in direct misstatement of a financial statement accou 621705

  • The auditor performs audit procedures to detect material misstatements in the account balance.
  • Which is least likely to misstate financial statement amounts?
  • The CPA must understand the business issues of the company and industry.
  • Think about control deficiencies, significant deficiencies, and material weaknesses.
  • What is an indirect financial interest?
  • Which control gives the auditor the best idea about the daily operation of the company?
  • Which area does the auditor have the most control over?
  • Segregate recordkeeping from authorization.
  • Which control helps the client maintain accountability for the cash payments?
  • Obsolete or slow moving inventory may never be sold and so the amount of inventory presented on the balance sheet may be overstated.
  • The client has primary responsibility for the fair presentation of the financial statements.
  • Partner rotation helps assure independence.
  • A requirement for any engagement is for the auditor to understand the environment they are working in.
  • Which fee is contingent?
  • A review engagement provides only limited assurance.
  • Think carefully about the indicators provided by the PCAOB.
  • Mentally “write” an emphasis-of-matter paragraph and consider whether it is likely that these items would be required.
  • The standard audit report should give the reader a clear understanding about responsibilities.
  • The auditor wants to determine a deviation rate for the sample.
  • Which technique places the simulated files into the midst of live transactions?
  • Documentation should be as accurate as possible.
  • One of these is intended to get the audit team “up to speed” in the area.
  • Which procedure may not be practical in some situations?
  • Consider a reply that will provide resources to the company.
  • Client’s are able to change accounting principles.
  • Scope limitations may result in two types of opinion—only one is listed.
  • Which is false, misleading, or deceptive?
  • For both types of association a CPA attempts to avoid misunderstandings.
  • Scope limitation reports are not allowed.
  • Which is most likely to result in direct misstatement of a financial statement account balance?
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