In evaluating the reasonableness of an estimate, the auditor would not normally concentrate on which of the following factors and assumptions?
a. Subjective judgments that introduce bias.
b. Deviations from historical patterns.
c. Amounts that are inconsistent with current economic trends.
d. All of these are a focus of the auditor regarding reasonable estimates.
Answer: D
Auditing
- Which of the following is not a typical communication between the auditor and the audit committee?
- Which of the following is the best example of a Type II subsequent event?
- The date of the audit opinion of Upton Industries, Inc. reads: March 7, 2014 except for Note D, as to which the date is March 12, 2014. What is this an example of?
- Management of AllTech, Inc. refuses to sign the management representation letter given to them in the course of the audit on the grounds that it invades the company's privacy. What does this refusal constitute?
- Which of the following statements is false regarding analytical procedures that help auditors assess the overall final presentation of the financial statements?
- Which of the following is not a typical analytical procedure for the completion of the audit?
- If the auditor concludes that there may be a going-concern problem with the client, which of the following is the best course of action for the auditor to follow?
- Which one of the following is false regarding the adequacy of disclosures in a financial statement audit?
- Which of the following is not true regarding accounting estimates?
- When responding to the auditor as a result of the audit client's letter of inquiry, how might the attorney limit the response?
- A reference to another auditor under U.S. auditing standards may result in which of the following?
- A justified departure from GAAP may result in which of the following?
- In which of the following instances would an auditor most likely issue a disclaimer of opinion?
- The opinion paragraph of the audit report for Schnook Company states that the financial statements "do not present fairly". Which type of audit report is this?
- Which of the following would not result in an unqualified audit report with an explanatory paragraph?
- When financial statements contain a material, unjustified departure from GAAP, which of the following is contained in the audit report?
- The division of responsibility between the reporting company's management and the audit firm is described in which one of the following?
- Which one of the following is an example of the contents of an opinion paragraph found in an audit report?
- According to the AICPA, the auditor needs to form an opinion on the financial statements based on an evaluation of the audit evidence obtained. This is stated in which AICPA principle governing an audit conducted in accordance with GAAS?
- Which of the following is a change not being debated by auditing standard setters and investors?
- During the course of an audit, misstatements that are individually immaterial may be detected. What should the auditor do with these?
- An audit firm culture that emphasizes "doing the right thing" does not incorporate which of the following to enhance audit quality?
- Which of the following items does the auditor ask the client to send to its legal counsel requesting information about asserted claims?
- Which of the following individuals should sign the management representation letter?
- During which of the following phases of the audit are analytical review procedures required by the auditing standards?