1.

The basic purpose of a financial statement audit is

to
A. Detect fraud.
B. Examine individual transactions so that the auditor
may certify as to their validity.
C. Provide assurance regarding whether the client's
financial statements are fairly stated.
D. Assure the consistent application of correct
accounting procedures.
2. Assurance services may improve all of the
following except:
A. Relevance.
B. Timeliness.
C. Periodicity.
D. Reliability.
3. Evidence is reliable if it
A. Signals the true state of a management assertion.
B. Applies to the period being audited.
C. Relates to the audit assertion being tested.
D. Is consistent with management's assertions.
4. Which of the following best describes the concept
of audit risk?
A. The risk of the auditor being sued because of
association with an audit client.
B. The risk that the auditor will provide an unqualified
opinion on financial statements that are, in fact,
materially misstated.
C. The overall risk that a material misstatement
exists in the financial statements.
D. The risk that auditors use audit procedures that
are inappropriate.
5. An auditor who accepts an audit engagement and
does not possess expertise with respect to the
business entity's industry, should

A. Engage financial experts familiar with the nature of

the business entity.
B. Obtain a knowledge of matters that relate to the
nature of the entity's business.
C. Refer a substantial portion of the audit to another
CPA, who will act as the principal auditor.
D. First inform management that an unqualified
opinion can not be issued.
6. In the context of agency theory, information
asymmetry refers to the idea that
A. Information can vary in its reliability.
B. Information can vary in its relevance.
C. Management has more information about the
entity's true financial position than do the absentee
owners (i.e. stockholders).
D. Management likely will not act in the best interests
of the absentee owners.
7. The auditor's report is generally addressed to the:
A. Chief operating officer.
B. Securities and Exchange Commission.
C. Stockholders of the company.
D. Chief financial officer.
8. An auditor would issue an adverse opinion if
A. The auditor encounters adverse attitudes toward
the auditor on the part of client management.
B. A qualified opinion cannot be given because the
auditor is not qualified to do so.
C. An immaterial misstatement is present.
D. The statements taken as a whole do not fairly
present the financial condition and results of
operations of the company.
9. Which of the following describes the generally
accepted auditing standard requiring a critical review
of the work done and the judgment exercised by

those assisting
supervision?
A. Proficiency
B. Audit risk
C. Inspection
D. Due care

in

an

audit

at

every

level

of

10. Which of the following best describes the general

character of the three generally accepted auditing
standards that are classified as standards of
fieldwork?
A. The competence, independence, and professional
care of persons performing the audit
B. Criteria for the content of the auditor's report on
financial statements and related footnote disclosures
C. The criteria of audit planning and evidencegathering
D. The need to maintain independence in mental
attitude in all matters relating to the audit
11. The first standard of reporting requires that, "the
report shall state whether the financial statements
are presented in accordance with generally accepted
accounting principles." This passage requires
A. A statement of fact by the auditor
B. An opinion by the auditor
C. An implied measure of fairness
D. An objective measure of compliance
12. Because of the risk of material misstatement, an
audit of financial statements in accordance with
generally accepted auditing standards should be
planned and performed with an attitude of
A. Objective cynicism
B. Independent Integrity
C. Professional skepticism
D. Impartial conservatism
13. Which is not an attribute of an external auditor?

A. Independence
B. Client advocacy
C. Objectivity
D. Concern for the public interest
1. DATRIX, Inc, a Fortune 500 company, has been
experiencing poor performance. Industry analysts
have been issuing negative reports and the
company's stock price has been steadily declining. As
an auditor, what would concern you about the audit
engagement of DATRIX, Inc.
Answer:
An auditor should be concerned because of the
apparent incentive the management of DATRIX may
have to commit financial statement fraud. For
instance, the company's management may be
tempted to change accounting estimates or use other
means to falsely increase the company's book profits.
The auditor should exercise professional skepticism in
this engagement and addresses carefully the risk of
financial statement fraud.
2. Sarah is auditing the sales of a new client. In one
procedure Sarah performs, she begins with the
original sales documents and then searches the
accounting records to find the corresponding entry.
What test is Sarah performing and what management
assertion is she testing?
Answer:
Sarah is tracing, which refers to first selecting an
accounting transaction (a source document) and then
following it into the journal or ledger. The
management assertion being tested is completeness.
Testing in this direction ensures that transactions that
occurred are recorded in the accounting records.

3. For an auditor, how are management assertions

useful?
Answer:
The assertions provide a framework within which the
auditor plans the audit, designs audit procedures,
obtains relevant evidence, and evaluates the
appropriateness and sufficiency of the evidence. The
management assertions help the auditor focus his or
her attention on all the various aspects of
transactions,
account
balances
and
required
disclosures that ought to be considered to ascertain
fair presentation of financial statements to users.

1. DATRIX, Inc, sebuah perusahaan Fortune

500, telah mengalami kinerja yang buruk.
Industri analis telah mengeluarkan laporan
negatif dan harga saham perusahaan telah
terus menurun. Sebagai auditor, apa yang akan
kekhawatiran Anda tentang keterlibatan audit
DATRIX, Inc
Jawaban:
Seorang auditor harus peduli karena insentif
jelas pengelolaan DATRIX mungkin harus
melakukan
penipuan
laporan
keuangan.
Misalnya, manajemen perusahaan mungkin
tergoda untuk mengubah estimasi akuntansi
atau
menggunakan
cara
lain
untuk
meningkatkan
keuntungan
palsu
buku
perusahaan.
Auditor
harus
melaksanakan
skeptisisme profesional dalam keterlibatan ini
dan
membahas
dengan
hati-hati
risiko
penipuan laporan keuangan.

2. Sarah mengaudit penjualan klien baru.

Dalam satu prosedur Sarah melakukan, ia mulai
dengan dokumen penjualan asli dan kemudian
mencari catatan akuntansi untuk menemukan
entri yang sesuai. Tes apa yang Sarah
melakukan dan apa pernyataan manajemen
yang dia pengujian?
Jawaban:
Sarah tracing, yang mengacu pada pertama
memilih transaksi akuntansi (dokumen sumber)
dan kemudian mengikutinya ke dalam jurnal
atau buku besar. Pernyataan manajemen yang
diuji adalah kelengkapan. Pengujian arah ini
memastikan bahwa transaksi yang terjadi
dicatat dalam catatan akuntansi.
3. Untuk auditor, bagaimana pernyataan
manajemen berguna?
Jawaban:
Pernyataan menyediakan kerangka kerja di
mana auditor merencanakan audit, desain
prosedur
audit,
memperoleh
bukti
yang
relevan, dan mengevaluasi kelayakan dan
kecukupan
bukti.
Pernyataan
manajemen
membantu auditor fokus nya perhatian pada
semua
berbagai
aspek
transaksi,
saldo
rekening dan pengungkapan yang diperlukan
yang
harus
dipertimbangkan
untuk
memastikan penyajian wajar laporan keuangan
untuk pengguna.