SOLVED

11) Which of the following would the auditor find most useful in relation to its previous audit procedures from the client representation letter? A) to impress upon the audit firm its responsibility for the audit B) to impress upon management its responsibility for the financial statement assertions C) to remind management of potential misstatements or omissions in the financial statements D) to document the responses from management to inquiries about various aspects of the audit 12) Which of the following is not one of the categories of items included in the client letter of representation? A) subsequent events B) Completeness of information C) recognition, measurement, and disclosure D) materiality 13) Auditing standards (SAS No. 99 and SAS No. 54) require the auditor to communicate all management frauds and illegal acts to the audit committee: A) only if the act is immaterial. B) only if the act is material. C) only if the act is highly material. D) regardless of materiality. 14) Which of the following audit procedures would most likely assist an auditor in identifying conditions and events that may indicate there could be substantial doubt about an entity’s ability to continue as a going concern? A) review compliance with the terms of debt agreements B) confirmation of accounts receivable from principal customers C) reconciliation of interest expense with debt outstanding D) confirmation of bank balances 15) Which of the following statements is correct? A) A letter of representation is documentation of management’s acceptance of responsibility for the financial statements and is deemed to be reliable evidence. B) A letter of representation is not deemed to be reliable evidence because of the potential incompetence of management. C) A letter of representation is not deemed to be reliable evidence because of the lack of independence of the preparers. D) A letter of representation is documentation of the CPA’s acceptance of responsibility for the audit of the financial statement and is deemed to be reliable. 16) Which of the following auditing procedures is ordinarily performed last? A) reading minutes of the board of directors’ meetings B) confirming accounts payable C) obtaining a client representation letter D) testing the purchasing function 17) An auditor must obtain written client representations that might be signed by all but which of the following? A) Treasurer B) Chief financial officer C) Vice president of operations D) Chief executive officer 18) What two steps must an auditor do if they have reservations about the audit client continuing as a going concern?