MIDTERM EXAMINATION

 
Which of the following components of an entity’s internal control includes development
and use of training policies that communicate prospective roles and responsibilities to
employees? *
1/1

Monitoring of controls
Control environment
 
Control activities
Information and communication

 
The following are components of internal control: *
1/1

Control activities
Control environment
The entity’s risk assessment process
Business risk
 
 
The auditor’s risk assessment procedures should always include the following,
except *
1/1

Inquiries of management and of others within the entity

Analytical procedures
Observation and inspection
Substantive test procedures and tests of controls
 
 
An auditor is planning an audit engagement for a new client in a business that is
unfamiliar to the auditor. Which of the following would be the most useful source of
information for the auditor during the preliminary planning stage, when the auditor is
trying to obtain a general understanding of audit problems that might be
encountered? *
0/1

Client manuals of accounts and charts of accounts.

Industry Audit Guides.
Prior year documentation of the predecessor auditor.
 
Latest annual and interim financial statements issued by the client.

Correct answer
Industry Audit Guides.

 
The auditor’s risk assessment procedures *
1/1

By themselves, do not provide sufficient appropriate audit evidence on which to base the audit
opinion
 
Should not consider information obtained from the auditor’s previous experience with entity
Are designed to detect material misstatement at the assertion level of classes of transactions,
account balances and disclosures
Are designed to test the effectiveness of the entity’s controls

 
Which of the following matters would an auditor most likely consider when establishing
the scope of the audit? *
1/1

The expected audit coverage, including the number and locations of the entity’s components to
be included
 
The entity’s timetable for reporting, such as at interim and final stages
The discussion with the status of audit work throughout the engagement and the expected
deliverables resulting from the audit procedures
Audit areas where there is a higher risk of material misstatement

 
An entity’s management is responsible for the preparation and fair presentation of the
financial statements. Its responsibility includes the following, except *
0/1

Designing, implementing, and maintaining internal control relevant to the preparation and
presentation of financial statements.
 
Making accounting estimates that are reasonable in the circumstances.
Selecting and applying appropriate accounting policies.
Assessing the risks of material misstatement of the financial statements.

Correct answer
Assessing the risks of material misstatement of the financial statements.
 
An auditor’s report on financial statements prepared in accordance with the financial
reporting provisions of a contract (that is, a special purpose framework) to comply with
the provisions of that contract should include all of the following, except *
0/1

An opinion as to whether the financial statements are presented fairly, in all material respects, in
accordance with the financial reporting provisions of the contract.
A statement that indicates the basis of accounting used.
An opinion as to whether the basis of accounting used is appropriate under the circumstances.
Reference to the note to the financial statements that describes the basis of presentation.
 
Correct answer
An opinion as to whether the basis of accounting used is appropriate under the circumstances.

 
In connection with the planning phase of an audit engagement, which of the following
statements is always correct? *
1/1

Final staffing decisions must be made prior to completion of the planning stage
Observation of inventory count should be performed at year-end
A portion of the audit of a continuing audit client can be performed at interim dates
 
An engagement should not be accepted after the client’s financial year-end

 
Audit programs are modified to suit the circumstances of particular engagements. A
complete audit program usually should be developed *
1/1

When the engagement letter is prepared

After obtaining an understanding of the control environment and control activities components of
the entity’s internal control
After the auditor has obtained an understanding of the entity and its environment, including its
internal control and assessed the risks of material misstatement
 
Prior to beginning the actual audit

 
The primary purpose of an auditor's consideration of internal control is to provide a
basis for: *
1/1
Determining whether procedures and records that are concerned with the safeguarding of assets
are reliable.
Constructive suggestions to clients concerning improvements in internal control.
Determining the nature, extent, and timing of audit tests to be applied.
 
To express an opinion.

 
An auditor most likely would assess control risk at the maximum if the payroll
department supervisor is responsible for
1/1

Comparing payroll registers with original batch transmittal data.

Authorizing payroll rate changes for all employees.
 
Examining authorization forms for new employees.
Hiring all subordinate payroll department employees.

 
In reporting on an entity's internal control structure over financial reporting, a
practitioner should include a paragraph that describes the: *
1/1

Inherent limitations of any internal control structure.

 
Documentary evidence regarding the control environment factors.
Changes in the internal control structure since the prior report.
Potential benefits from the practitioner's suggested improvements.

 
A CPA is performing an audit examination of Malfoy, Inc. The CPA has already done
the work necessary to gain a general understanding of the company’s internal control.
The CPA is now looking at the internal control policies and procedures within the
accounting system specifically for accounts receivable. The CPA has decided to
perform test of controls in this area. Which of the following is least likely to be true? *
0/1

The system contains an excess number of possible problems so that testing is required.
The internal control system appears to be well designed.
The CPA hopes to reduce the necessary amount of substantive testing.
The CPA hopes to reduce overall audit time.
 
Correct answer
The system contains an excess number of possible problems so that testing is required.
 
In an audit of financial statements in accordance with generally accepted auditing
standards, an auditor is required to *
0/1

Determine whether control procedures are suitably designed to prevent or detect material
misstatements.
 
Perform tests of controls to evaluate the effectiveness of the entity's accounting system.
Search for significant deficiencies in the operation of the internal control structure.
Document the auditor's understanding of the entity's internal control structure

Correct answer
Document the auditor's understanding of the entity's internal control structure

 
Criteria that are embodied in laws or regulations, or issued by authorized or
recognized bodies of experts that follow a transparent due process are called *
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Suitable criteria
Specifically developed criteria
Established criteria
 
General criteria

 
The overall objectives of the auditor in conducting an audit of financial statements
are: *
0/1

I. To obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatements, whether caused by fraud or error
 
II. To report on the financial statements
 
III. To obtain conclusive rather than persuasive evidence
 
IV. To detect all misstatements, whether due to fraud or error

Correct answer
I. To obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatements, whether caused by fraud or error
II. To report on the financial statements
 
The primary emphasis by auditors by auditor when assessing internal control is on
controls over: *
0/1

Account balances.
Classes of transactions.
Both A and B, because they are equally important.
Both A and B, because they vary from client to client.
 
Correct answer
Classes of transactions.

 
Which of the following statements concerning the management’s expert’s
competence, capabilities and objectivity is correct? *
1/1

Objectivity relates to the ability of the management’s expert to exercise the competence in the
circumstances
Competence relates to the possible effects that bias, conflict of interest or the influence of others
may have on the professional or business judgment of the management’s expert
Capability relates to the nature and level of expertise of the management’s expert
The management’s expert’s competence, capabilities and objectivity are important factors in
relation to the reliability of any information prepared by the management’s expert
 
 
Which of the following procedures would be most effective in reducing attestation
risk? *
0/1

Discussion with responsible individuals.

Examination of evidence.
Inquiries of senior management.
Analytical procedures.
 
Correct answer
Examination of evidence.

 
One of the components of internal control that an independent auditor must come to
understand about each audit client is “information and communication.” What is meant
by this term? *
1/1

The ability of the management of the company to communicate its priorities to the appropriate
staff levels within the organization.
The ability of the accounting system to generate reliable information and convey it in a timely
manner to those parties within the organization that needs it.
 
The ability of employees in a company to warn the independent auditor of fraudulent actions
within the organization.
The ability of the internal auditor to communicate information about the various systems to people
within the organization at an appropriate level of authority

 
Narrative, flowcharts, and internal control questionnaires are three common methods
of: *
1/1

Documenting the auditor's understanding of internal controls.

 
Designing the audit manual and procedures.
Testing the internal controls.
Documenting the auditor's understanding of the client's organizational structure.

 
In obtaining an understanding of a manufacturing entity's internal control concerning
inventory balances, an auditor most likely would: *
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Perform test counts of inventory during the entity's physical count.

Analyze inventory turnover statistics to identify slow-moving and obsolete items.
 
Review the entity's descriptions of inventory policies and procedures.
Analyze monthly production reports to identify variances and unusual transactions.

Correct answer
Review the entity's descriptions of inventory policies and procedures.

 
Which of the following is ordinarily considered a test of controls? *
0/1

Send confirmation letters to banks.

Count and list cash on hand.
Examine signatures on checks.
Obtain or prepare reconciliations of bank accounts as of the balance sheet date.
 
Correct answer
Examine signatures on checks.

 
Risk assessment involves considering threats to the organization’s objectives in the
areas of: *
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Marketing, financial reporting and compliance.

Operations, financial reporting and compliance with laws and regulations.
 
Financial reporting, performance and marketing.
Compliance with laws and regulations, operations and performance.

 
The ultimate purpose of assessing control risk is to contribute to the auditor's
evaluation of the risk that: *
1/1

Material misstatements may exist in the financial statements.

 
Entity policies may be overridden by senior management.
Specified controls requiring segregation of duties may be circumvented by collusion
Tests of controls may fail to identify procedures relevant to assertions.

 
Internal control procedures are strengthened when the quantity of merchandise
ordered is omitted from the copy of the purchase order sent to the: *
1/1

Purchasing agent.
Accounts payable department.
Receiving department.
 
Department that initiated the requisition

 
An auditor assesses inherent risk in an engagement. An auditor assesses control risk
in an engagement. Then, based on those two assessments, the auditor does enough
substantive testing to reduce detection risk so that overall audit risk drops to an
acceptably low level. That is the structure of an audit. In assessing control risk, the
auditor starts by learning the design of the control system and then considers whether
to perform tests of individual controls. If the design of the control system is viewed as
weak, which of the following is most likely to be true? *
0/1

The auditor will be likely to test the controls because of the weakness.
 
The auditor is likely to do additional substantive testing.
The auditor will likely reduce the assessment of inherent risk.
An unqualified opinion cannot be issued.

Correct answer
The auditor is likely to do additional substantive testing.

 
Transaction authorization within an organization may be either specific or general. An
example of a specific transaction authorization is the: *
1/1

Setting of automatic reorder points for material or merchandise.

Approval of a detailed construction budget for a warehouse.
 
Establishment of requirements to be met in determining a customer's credit limits.
Establishment of sales prices for products to be sold to any customer.

 
Statement 1: Test of control is a required audit procedures. Statement 2: Substantive
testing is a required audit procedure. *
0/1

True; True
False; True
False: False
True; False
 
Correct answer
False; True

 
Berto, CPA, discovered an illegal act during the audit of UBE Corporation, a publicly
held company. Accordingly, which of the following would be the best response by
Berto? *
1/1
Berto shall notify the Securities and Exchange Commission regarding the illegal act.
Berto should determine who was responsible for the illegal act.
Berto shall report the act to the audit committee and high level personnel within Ube Corporation.
 
Berto shall intensity the examination to identify all illegal acts.

 
Independent auditors have carried out analytical procedures on an audit client and
determined that the reported liabilities at the end of Year One are significantly lower
than expected. Which of the following is most likely to have created this situation? *
0/1

Purchases received during the last few days of Year One were recorded in Year Two.
Sales made during the first few days of Year Two were recorded in Year One.
Cash payments made during the last few days of Year One were recorded in Year Two.
 
Cash collections made during the first few days of Year Two were recorded in Year One.

Correct answer
Purchases received during the last few days of Year One were recorded in Year Two.

 
Certain management characteristics may heighten the auditor’s concern about the risk
of material misstatements. The characteristic that is least likely to cause concern is
that management *
0/1

Operating and financing decisions are made by numerous individuals.

Commits to unduly aggressive forecasts.
Has an excessive interest in increasing the entity’s stock price through use of unduly aggressive
accounting practices.
In interested in inappropriate methods of minimizing earnings for tax purposes.
 
Correct answer
Operating and financing decisions are made by numerous individuals.

 
The CPA firm of Terry & Francona is auditing the financial statements of Fenway
International Corporation. Fenway owns a number of unique investments where the
market value is difficult to determine. The CPA firm hires a specialist in investment
analysis to help determine the market value of these assets. Which of the following
statements is true? *
1/1
This investment analyst must be independent of the client company.
The hiring of this analyst means that the firm must provide a qualified audit opinion.
The hiring of this analyst means that the firm must add an extra paragraph to the end of the audit
report to alert readers to the work of the specialist.
The firm must assess the qualifications of the specialist as part of the audit process.
 
 
Obtaining an understanding of an entity’s internal control, an auditor is required to
obtain knowledge about the:---------- A. Operating effectiveness of the controls.
-------------------------------B. Design and operation of controls. *
1/1

Yes; Yes
Yes; No
No; Yes
 
No; No

 
Which of the following internal controls most likely would reduce the risk of diversion of
customers’ receipts by an entity's employees? *
0/1

A bank lockbox system.

Pre-numbered remittance advices.
Monthly bank reconciliations.
Daily deposit of cash receipts.
 
Correct answer
A bank lockbox system.

 
Which of the following is an incorrect statement? *
1/1

The amount of audit work should vary inversely with the likelihood of material misstatements
existing in the accounting records.
 
The better the organization’s control structure, the less likely it is that material misstatements will
be present
Complex or unusual transactions are more likely to be recorded in error than recurring or routine
transactions are
If misstatements are likely to occur in the recording process, the auditor should develop
procedures to detect misstatements.
 
The audit risk model consists of: AR = IR X CR X DR. The detection risk is the
dependent variable. What is the acceptable level of detection risk if the assessed level
of Inherent Risk is High and the Control risk is Low? *
0/1

Highest
Lower
Medium
Higher
 
Correct answer
Medium

 
In assessing potential for fraud, the following are either likely or unlikely to increase
risk of misstatements of financial statements. Which of the following combinations best
describes the likelihood of potential for fraud? --- A. Many contentious or difficult
accounting issues are present. B. Significant and unusual related transactions are
present. C. Direction of change in entity’s industry is declining in business. *
1/1

Likely, Unlikely, Likely

Likely, Likely, Likely
 
Unlikely, Unlikely, Likely
Like, Unlikely, Unlikely

 
How do auditing standards consider the auditor’s responsibilities for detecting fraud
and errors? *
1/1

Auditing standards make no distinction between the auditor’s responsibilities for searching for
errors and fraud.
 
The difficulty of detecting fraud changes the auditor’s responsibility from reasonable to limited
assurance.
The auditor should plan to discover material errors and all forms of fraud
Auditing standards provide an implicit responsibility for the auditor to discover material
misstatement due to fraud

 
Which of the following is not one of the three primary objectives of effective internal
control? *
1/1

Reliability of financial reporting.

Efficiency and effectiveness of operations.
Compliance with laws and regulations.
Assurance of elimination of business risk.
 
 
Statement 1: Incompatible functions requires that one person should not be
responsible for all phases of a transaction.----- Statement 2: General controls and
application controls are part of control activities. *
0/1

True; False
True; True
 
False; False
False; True

Correct answer
True; False

 
The framework within which an entity’s activities for achieving its objectives are
planned, executed, controlled and reviewed. Establishing it includes considering key
areas of authority and responsibility and appropriate lines of reporting. *
1/1

Human Resource
Organizational Structure
 
Assignment of Authority and Responsibility
Management’s Philosophy and Operating Style

 
Which of the following is a part of industry factors? *
0/1

Accounting principles and industry specific practices

Legal and political environment
 
Market conditions
Environmental requirements

Correct answer
Market conditions

 
Statement 1: A material internal control weakness is a significant deficiency/weakness
in the design or operation of the internal control which have come to the auditor’s
attention that should be reported to the appropriate level of management such as the
highest official of the company or those charged with governance. Statement 2: A
reportable condition is a condition in which material errors or fraud would ordinarily not
be detected within a timely period by employees in the normal course of performing
their assigned functions. *
1/1

True; False
True; True
False; False
 
False; True

 
It is a description of the auditor's understanding of the system of internal control. It is
more appropriate for less complex structure. *
1/1

Narrative Memoranda
 
Internal Control Checklist
Flowchart
Internal Control questionnaire.

 
It relates to the vision and mission of the entity. *
1/1

Governance
Objectives
 
Strategies
Internal Control

 
A system of internal control, regardless of how carefully designed and implemented,
contains certain inherent limitations. Which of the following errors or irregularities is
not caused by an inherent limitation? *
1/1

The president and chief executive officer, with the assistance of the corporate controller, inflated
earnings by recording fictitious sales at year-end.
A newly-installed electronic data processing system failed to provide for a comparison of sales
order amount with prior customer balance and credit limit. This resulted in numerous sales to
customers who had already exceeded their credit limits.
Numerous recording errors occurred because persons analyzing and recording transactions did
not have the necessary accounting background.
 
A computer programmer and a computer operator conspired to divert funds from the company to
an account controlled by the dishonest employees.

 
Controls that enhance the reliability of the financial statements may be classified as
prevention controls and detection controls. Which of the following is primarily a
detection control? *
1/1

Separation of duties between recording cash receipts and depositing cash.

Bank accounts are reconciled monthly by persons independent of cash recording and cash
custody.
 
The human resources department authorizes the hiring of only those persons for accounting
positions that meet the written job requirements specified by the corporate controller.
An accounting manual, accompanied by a detailed chart of accounts, carefully and clearly
describes each type of transaction affecting the entity

 
If the auditor concludes that there is reasonable justification to change the
engagement and if the audit work performed complies with the PSAs applicable to the
changed engagement, the report issued would be that appropriate for: *
1/1

The original engagement, without reference to the original engagement

The revised terms of engagement, without reference to the original engagement
 
The revised terms of engagement, with reference to the original engagement
The original engagement, with reference to the original engagement

 
Your client, a merchandising concern, has annual sales of P30,000,000 and a 40%
gross profit rate. Tests reveal that 2% of the peso amount of purchases do not get into
inventory because of breakage and inventory pilferage by employees. The company
estimates that these losses could be reduced to 0.5% of purchases by designing and
implementing certain controls costing approximately P350,000. Should the controls be
designed and implemented? *
1/1

Yes, regardless of cost-benefit considerations, because the situation involves employee theft.
Yes, because the ideal system of internal control is the most extensive one.
No, because the cost of designing and implementing the added controls exceeds the projected
savings.
 
Yes, because the expected benefits to be derived exceed the cost of the added controls.

 
Inherent risk is reduced when the likelihood of defalcation is low. This would be true
for an account such as: *
0/1

Property, plant and equipment

Held for trading securities
Cash
Accounts receivable
 
Correct answer
Property, plant and equipment

 
A conceptually logical approach to the auditor's evaluation of internal accounting
control consists of the following four steps. What is the third step? *
0/1

I. Determine whether the necessary procedures are prescribed and are being followed
satisfactorily.
II. Consider the types of errors and fraud that could occur.
 
III. Determine the internal control policies and procedure that should prevent or detect errors and
fraud.
IV. Evaluate any weakness to determine its effect on the nature, timing, or extent of auditing
procedures to be applied and suggestions to be made to the client.

Correct answer
I. Determine whether the necessary procedures are prescribed and are being followed
satisfactorily.

 
The following are benefits of using IT-based controls, except *
1/1

Ability to process large volume of transactions.

Over-reliance on computer-generated reports.
 
Ability to replace manual controls with computer-based controls.
Reduction in misstatements due to consistent processing of transactions.

 
When obtaining an understanding of the accounting and internal control system the
auditor may trace a few transactions through the accounting system. This technique
is: *
1/1

Reperformance
Walk-through
 
Control test
Validity test

 
In performing an acceptance and continuance procedures for a newly accepted
engagement, Ace a new partner in the firm should obtain information relating to *
1/1

I. The integrity of the clients management

 
II. Independence of the firm
 
III. Competency to serve the client appropriately
 
IV. Profitability of the firm.

 
The firm should obtain written confirmation of compliance with its policies and
procedure on independence from all firm personal required to be independent by the
Code of Ethics at least: *
1/1

Monthly
Quarterly
Annually
 
Every 3 years

 
Authorizations can be either general or specific. Which of the following is not an
example of a general authorization? *
1/1

Automatic reorder points for raw materials inventory.

A sales manager’s authorization for a sales return.
 
Credit limits for various classes of transactions.
A sales price list for merchandise.

 
Which of the following statements best describes the phrase, "evaluating the designs
of a control" ? *
1/1

Considering whether the control, individually or in combination with other controls, is capable of
effectively preventing, or detecting and correcting, material misstatements.
 
Determining whether the control exists and that the entity is using it.
Expressing an opinion as to the effectiveness of a control.
Observing the application of specific controls.

 
A procedure that would most likely be used by an auditor in performing tests of control
procedures that involve segregation of functions and that leave no transaction trail is *
1/1

Inspection.
Observation.
 
Reprocessing.
Reconciliation.

 
Which of the following statements concerning materiality is not correct? *
1/1

When establishing the overall audit strategy, the auditor shall determine materiality for the
financial statements as a whole.
If, in the specific circumstances of the entity, there is one or more particular classes of
transactions, account balances or disclosures for which misstatements of lesser amounts than
materiality for the financial statements as a whole could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements, the auditor shall also
determine the materiality level or levels to those particular classes of transactions, account
balances or disclosures.
Determining materiality involves the exercise of professional judgment.
The materiality level for the financial statements as a whole determined in the planning stage of
the audit should not be affected by changes in the circumstances of the engagement.
 
 
Inherent risk is defined as the susceptibility of an account balance or class of
transactions to error that could be material assuming that there were no related
internal controls. Of the following conditions, which one does not increase inherent
risk? *
0/1

The client has entered into numerous related party transactions during the year under audit.
Internal control over shipping, billing, and recording of sales revenue is weak.
The client has lost a major customer accounting for approximately 30% of annual revenue.
 
The board of directors approved a substantial bonus for the president and chief executive officer,
and also approved an attractive stock option plan for themselves.

Correct answer
Internal control over shipping, billing, and recording of sales revenue is weak.

 
Which of the following is a correct statement relating to the theoretical framework of
auditing? *
1/1

The financial data to be audited can be verified.

 
Short-term conflicts do not exist between managers who prepare data and auditors who examine
data.
Auditors do not necessarily need independence.
An audit has a benefit only to the owners.

 
Which of the following might be considered a "red flag" indicating possible fraud in a
large manufacturing company with several subsidiaries? *
1/1

The existence of a financial subsidiary.

A consistent record of above average return on investment for all subsidiaries.
Complex sales transactions and transfers of funds between affiliated companies.
 
Use of separate bank accounts for payrolls by each subsidiary.

 
Which of the following is an incorrect phrase? *
1/1

Auditing is a systematic process.

Auditing subjectively obtains and evaluates evidence.
 
Auditing evaluates evidence regarding assertions.
Auditing communicates results to interested users.

 
Reasonable assurance means: *
1/1

Gathering of all available corroborating evidence for the auditor to conclude that there are no
material misstatements in the financial statements, taken as a whole.
Gathering of the audit evidence necessary for the auditor to conclude that there are no material
misstatements in the financial statements, taken as a whole.
 
Gathering of the audit evidence necessary for the auditor to conclude that the financial
statements, taken as a whole, are free from any misstatements.
Gathering of the audit evidence necessary for the auditor to conclude that the financial
statements are free of material unintentional misstatements.

 
A lawyer’s response to an auditor’s inquiry concerning litigation, claims, and
assessments may be limited to matters that are considered individually or collectively
material to the client’s financial statements. Which parties should reach an
understanding on the limits of materiality for this purpose? *
0/1

The auditor and the client’s management.

 
The client’s audit committee and the lawyer.
The client’s management and the lawyer.
The lawyer and the auditor.

Correct answer
The lawyer and the auditor.

 
Which statement is incorrect regarding the auditor’s consideration of laws and
regulations in an audit of financial statements? *
1/1

Noncompliance refers to acts of omission or commission by the entity being audited which are
contrary to prevailing laws and regulations
Noncompliance includes transactions entered into by, or in the name of, the entity, or on its
behalf, by TCWG, management or employees
Noncompliance includes personal misconduct of the entity’s management or employees though
they are unrelated to the entity’s business activities
 
In the absence of evidence to the contrary, the auditor is entitled to assume the entity is in
compliance with applicable laws and regulations affecting the client

 
Jei Corp. orally engaged Denn & Co., CPAs, to audit its financial statements. The
management of Jei informed Denn that it suspected that the accounts receivable were
materially overstated. Although the financial statements audited by Denn did, in fact,
include a materially overstated accounts receivable balance, Denn issued an
unqualified opinion. Jei relied on the financial statements in deciding to obtain a loan
from City Bank to expand its operations. City relied on the financial statements in
making the loan to Jei. As a result of the overstated accounts receivable balance, Jei
has defaulted on the loan and has incurred a substantial loss. If Jei sues Denn for
negligence in failing to discover the overstatement, Denn's best defense would be
that *
0/1

No engagement letter had been signed by Denn.

 
The audit was performed by Denn in accordance with generally accepted auditing standards.
Denn was not in privity of contract with Jei.
Denn did not perform the audit recklessly or with an intent to deceive.

Correct answer
The audit was performed by Denn in accordance with generally accepted auditing standards.

 
Which of the following is mandatory if the auditor is to comply with generally accepted
auditing standards? *
1/1

Possession by the auditor of adequate technical training.

 
Use of analytical review on audit engagements.
Use of statistical sampling whenever feasible on an audit engagement.
Confirmation by the auditor of material accounts receivable balances.