Description

ACC 544 Final Exam – Free Download

1) Which is NOT one of the AICPA’s Code of Professional Conduct principles acc 544 final exam ?

1. The public interest
2. Integrity
3. Quality control
4. Scope and nature of service

2) The ethical philosophy that considers the consequences of similar persons acting under similar circumstances is called

1. utilitarian principle.
2. imperative principle.
3. categorical imperative.
4. generalization argument

3) The fundamental issues in independence require that the auditor avoid

1. financial connections with the client and financial connections with the client’s competitors.
2. acting as management and representing the shareholder’s interests.
3. responsibility for the client’s internal control and subordinating judgment concerning audit issues.
4. financial connections with the firm and acting as management.

4) Auditors have greater liability under the Securities Act of 1933. Which is the reason that this greater liability exists?

A).The auditor is liable for treble damages under the Securities Act of 1933.

B). The plaintiff does not have to prove that the financial statements were misstated.

C). The plaintiff does not have to prove that they relied on the financial statements.

D). The plaintiff does not have to prove that there were damages.

5) The legal doctrine that states that a successful plaintiff may recover the full amount of damages from any defendant that has the ability to pay is called

1. A) Joint and several liability.
2. B) Proportionate liability.
3. C) Complete liability.
4. D) Total liability.

6) The SEC regulation that governs disclosures in annual reports other than financial statements is the acc 544 final exam

A). Securities Act of 1933.

B). Securities Exchange Act of 1934.

C). Regulation S-X.

D). Regulation S-K.

7) Inspection of tangible assets provides evidence for which assertion?

1. Existence and occurrence
2. Completeness
3. Rights and obligations
4. Presentation and disclosure

8) The risk that the auditor may provide an inappropriate opinion based on their review of materially misstated financial statements is referred to as

1. audit risk.
2. detection risk.
3. information risk.
4. business risk

9) Auditors perform the steps in which order?

1. Determine audit risk; assess control risk; determine detection risk; and set materiality.
2. Set materiality; determine audit risk; assess control risk; and determine detection risk.
3. Set materiality; assess control risk; determine detection risk; and determine audit risk.
4. Determine audit risk; set materiality; assess control risk; and determine detection risk.

10) An internal control questionnaire (ICQ) contains the question: “Does a single individual receive and list ca to sales and general ledgers?” acc 544 final exam What action must an auditor take if the manager of accounting responds yes to the

1. No action is required because yes responses on an ICQ indicate the presence of good control.
2. Statistically sample the response along with all other yes responses to verify their accuracy.
3. Treat it as a potential control weakness and perform appropriate testing.
4. Include it with other reportable findings in the next audit report.

11) In addition to gaining an understanding of the internal controls, an external auditor, at minimum, is expect

1. evaluate the internal auditors’ work as an important part of the accounting system element of the inter
2. observe client employees to determine the extent of their compliance with quality control standards.
3. trace a few transactions through the control process to obtain evidence that the controls have been pla
4. study organization charts to obtain an understanding of the informal lines of communication.

12) Which method provides the auditor with the best visual grasp of a system and a means for analyzing complex operations?

1. A flowcharting approach
2. A matrix approach
3. A questionnaire approach
4. A detailed narrative approach

13) Which of the accounts is NOT included in the revenue and collection cycle?

1. Cash in bank
2. Raw materials
3. Accounts receivable
4. Bad debt expense

14) The most reliable evidence comes from

1. a positive confirmation.
2. a blank confirmation.
3. a negative confirmation.
4. examining a sales invoice.

15) Custody is transferred from the warehouse to the shipping department upon authorization of the

1. shipping order.
2. purchase order.
3. customer order.
4. invoice.

16) An enlightened management may decrease the probability of fraud in the company best by acc 544 final exam

1. restricting authority for profit objective determination to top management.
2. stressing negative observations on their work to increase performance.
3. measuring performance and awarding bonuses on the basis of short-term operating results.
4. establishing work teams that share responsibilities, performance, and bonuses based on collective effor

17) A proof of cash is normally used

1. for all engagements.
2. when control risk for cash is low.
3. to test the transactions process when controls over cash are weak.
4. when lapping is suspected.

18) Which is an appropriate audit program step for the review of canceled checks for authorized signatures?

1. Compare the check date with the first cancellation date.
2. Examine a representative sample of signed checks, and determine that the signatures are authorized in the corporate signature book.
3. Determine that all checks are to be signed by an individual authorized by the board.
4. Confirm the signatures from a sample of checks directly with the bank.

19) The production authorization starts with a

1. purchase order.
2. sales forecast.
3. production plan.
4. bill of materials.

20) Which is NOT recognized by GAAP as appropriate for determining inventory cost?

1. FIFO
2. Weighted average
3. LIFO
4. Standard costs

21) Inventory must be recorded when

1. the company has title to it.
2. the related revenue is recognized.
3. it is received.
4. it is shipped from the vendor.

22) Canceling invoices with a paid stamp after payment is a control that relates to which assertion?

1. Existence or occurrence
2. Rights and obligations
3. Completeness
4. Valuation or allocations

23) Which is NOT a step in the search for unrecorded liabilities?

1. Examine the open purchase order file.
2. Examine the unmatched receiving reports.
3. Examine disbursements for the period immediately before the end of the period.
4. All of these are steps in the search.

24) Which control question relates to the existence and occurrence objective in purchasing and accounts payable acc 544 final exam ?

1. Are the purchase order forms prenumbered and is the numerical sequence checked for missing documents?
2. Does the chart of accounts and accounting manual provide instructions for classifying debit entries?
3. Does the accounting department check invoices for mathematical accuracy?
4. Are receiving reports prepared for each item received?

25) The audit objective that all transactions and accounts that should be presented in the financial statements are included is related to which assertion?

1. Existence or occurrence
2. Presentation and disclosure
3. Rights and obligations
4. Completeness

26) Which best describes the main reason independent auditors report on management’s financial statements?

1. A management fraud may exist, and it is likely to be detected by independent auditors.
2. The management that prepares the statements may have a poorly designed system of internal control.
3. The management that prepares the statements and ther persons who use the statements may have conflicting interests.
4. Misstated account balances may be corrected as the result of the independent audit work.

27) The audit objective that all footnotes have been included in the financial statements is related most closely to which assertation?

1. Existence or occurrence
2. Presentation and disclosure
3. Rights and obligations
4. Completeness