Audit MCQ Practice - 5 comp.Audit MCQ Practice - 5 comp..docVIP

Practice Exam #3 1. Which of the following is not a likely source of information to assess fraud risks? a. Communications among audit team members. b. Inquiries of management. c. Analytical procedures. d. Consideration of fraud risks discovered during recent audits of other clients. 2. When the auditor suspects that fraud may be present, SAS No. 99 requires the auditor to: a. terminate the engagement with sufficient notice given to the client. b. issue an adverse opinion or a disclaimer of opinion. c. obtain additional evidence to determine whether material fraud has occurred. d. all of the above. 3. With whom should the auditor communicate whenever he or she determines that fraud may be present, even if the matter might be considered inconsequential? a. Senior management b. Audit committee c. An appropriate level of management that is at least one level above those involved d. All of the above 4. Management is responsible for: a. identifying and measuring fraud risks. b. taking steps to mitigate identified risks. c. both a and b. d. neither a nor b. 5. For inquiry to be effective, auditors need to be skilled at listening and _______ an interviewee’s response to questions. a. evaluating b. recording c. transcribing d. remembering 6. Auditors may identify conditions during fieldwork that change or support a judgment about the initial assessment of fraud risks. Which of the following conditions should alert an auditor about the initial assessment? a. Missing or conflicting evidence b. Discrepancies in the accounting records c. Unusual relationships between the auditor and management d. All of the above 7. As part of designing and performing procedures to address management override of controls, auditors must perform which of the following procedures? a. Examine journal entries and other adjustments for evidence of possible misstatements due to fraud. b. Review accounting estimates for biases. c. Both a and b. d.