ACC 599 Final Exam VERSIONS 1 & 2
A comprehensive final exam covering financial and managerial accounting.
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ACC 599 FINAL EXAM VERSIONS 1 & 2
VERSIONS 1
Question 1
The first general standard of the PCAOB requires that an audit be performed by which type of
person?
Answer
An auditor with seasoned judgment in varying degrees of supervision and review.
An auditor with appropriate technical training and proficiency.
An auditor with adequate knowledge of the standards of field work and reporting.
An auditor satisfying the independence standards
Question 2
Which assertion addresses whether all transactions and accounts that should be included in the
financial statements are included?
Answer
Existence.
Valuation.
Completeness.
Rights and Obligations
Question 3
Which one of the following attributes is not required of an auditor?
Answer
Independence.
Bias.
Integrity.
Technical competence
Question 4
Which one of the following is a reporting standard requirement?
Answer
The auditor will state explicitly whether the financial statements are fairly presented in
accordance with the applicable financial reporting framework.
The auditor will identify in the auditor’s report, those circumstances in which auditing principles
have not been consistently observed in the current period in comparison to the preceding period.
The auditor will review adjusting journal entries for accuracy, and if the auditor concludes those
entries are not reasonable accurate, the auditor must so state in the auditor’s report.
The auditor will express an unqualified opinion on the financial statements, or will conduct
additional audit procedures until such an opinion can be expressed
Question 5
When obtaining an understanding of internal controls, what is the independent external auditor
primary concerned with?
VERSIONS 1
Question 1
The first general standard of the PCAOB requires that an audit be performed by which type of
person?
Answer
An auditor with seasoned judgment in varying degrees of supervision and review.
An auditor with appropriate technical training and proficiency.
An auditor with adequate knowledge of the standards of field work and reporting.
An auditor satisfying the independence standards
Question 2
Which assertion addresses whether all transactions and accounts that should be included in the
financial statements are included?
Answer
Existence.
Valuation.
Completeness.
Rights and Obligations
Question 3
Which one of the following attributes is not required of an auditor?
Answer
Independence.
Bias.
Integrity.
Technical competence
Question 4
Which one of the following is a reporting standard requirement?
Answer
The auditor will state explicitly whether the financial statements are fairly presented in
accordance with the applicable financial reporting framework.
The auditor will identify in the auditor’s report, those circumstances in which auditing principles
have not been consistently observed in the current period in comparison to the preceding period.
The auditor will review adjusting journal entries for accuracy, and if the auditor concludes those
entries are not reasonable accurate, the auditor must so state in the auditor’s report.
The auditor will express an unqualified opinion on the financial statements, or will conduct
additional audit procedures until such an opinion can be expressed
Question 5
When obtaining an understanding of internal controls, what is the independent external auditor
primary concerned with?
Answer
Detecting all errors
Determining the effectiveness of operations
Determining whether the internal controls can be relied upon
Determining whether the controls promote efficiency
Question 6
Which of the following is an inherent limitation of internal controls?
Answer
Lack of auditor independence
Collusion
Separation of duties
Employee peer review
Question 7
Which of the following is clearly a test of controls?
Answer
Walk-through of the expense cycle from performance of the service to the reporting in the
balance sheet
Examination of a sample of purchase order records for electronic, authenticated, authorization
Observing the controller's use of company owned equipment
Sending a letter to the client's attorney to determine litigation that is pending between plaintiff
and the defendant
Question 8
Which of the following is an example of a detective control in an information system?
Answer
Automated reports to management that specifically identify delinquent receivable
A requirement that salaried employees submit written requests to work overtime
Assurance from top management that computer centers are kept locked
The employment of trustworthy people to enter data into the information system
Question 9
Which of following is not part of the ethical framework derived from utilitarianism and rights
theories?
Answer
Identification of the legal issues
Determination of affected parties and their rights
Determination of the most important rights
Development of alternative courses of action
Question 10
In determining the types of activities, engagements and interactions an auditor should have with
a client, what must the CPA and the audit firm do?
Answer
Detecting all errors
Determining the effectiveness of operations
Determining whether the internal controls can be relied upon
Determining whether the controls promote efficiency
Question 6
Which of the following is an inherent limitation of internal controls?
Answer
Lack of auditor independence
Collusion
Separation of duties
Employee peer review
Question 7
Which of the following is clearly a test of controls?
Answer
Walk-through of the expense cycle from performance of the service to the reporting in the
balance sheet
Examination of a sample of purchase order records for electronic, authenticated, authorization
Observing the controller's use of company owned equipment
Sending a letter to the client's attorney to determine litigation that is pending between plaintiff
and the defendant
Question 8
Which of the following is an example of a detective control in an information system?
Answer
Automated reports to management that specifically identify delinquent receivable
A requirement that salaried employees submit written requests to work overtime
Assurance from top management that computer centers are kept locked
The employment of trustworthy people to enter data into the information system
Question 9
Which of following is not part of the ethical framework derived from utilitarianism and rights
theories?
Answer
Identification of the legal issues
Determination of affected parties and their rights
Determination of the most important rights
Development of alternative courses of action
Question 10
In determining the types of activities, engagements and interactions an auditor should have with
a client, what must the CPA and the audit firm do?
Answer
Follow the rules exactly as they are written
Assess all of their relationships with every client to ensure that independence is intact
Focus on client satisfaction above all other considerations
Realize that ethics are only guidelines and a matter of personal judgment
Question 11
Which of the following is not an aspect of Rule 201 of the General Standards of the Code of
Professional Conduct?
Answer
A member must not take on an engagement that is beyond the member's professional
competence
A member must exercise duties prudently and professionally
A member must adequately plan and supervise the performance of professional services
A member firm must not advertise services to competing clients
Question 12
Which of the following represents a situation in which auditors may disclose client information
to outside parties?
Answer
Bringing working papers to a professional CPA workshop as an example of quality work
Complying with a validly issued and enforceable subpoena or summons
Showing the client’s bank statement to a neighbor who is a shareholder to emphasize its cash
position
Explaining to the local television news station why the client is likely to miss payroll in the
forthcoming periods
Question 13
The significance of the bill of lading is to provide which of the following?
Answer
The warehouse personnel with the product that must be shipped to customers
Invoices to customers for proper collection
A credit application for customer approval
Evidence of title transfer of goods to customers
Question 14
A control that may be implemented to ensure all sales that occur are recorded in the general
ledger includes which of the following?
Answer
Use of prenumbered shipping, invoice and sales documents
Use of prenumbered statements, inventory lists and credit memos
Reconciliation of invoices with customer statements
Use of pre-authorized price lists
Question 15
Assess all of their relationships with every client to ensure that independence is intact
Focus on client satisfaction above all other considerations
Realize that ethics are only guidelines and a matter of personal judgment
Question 11
Which of the following is not an aspect of Rule 201 of the General Standards of the Code of
Professional Conduct?
Answer
A member must not take on an engagement that is beyond the member's professional
competence
A member must exercise duties prudently and professionally
A member must adequately plan and supervise the performance of professional services
A member firm must not advertise services to competing clients
Question 12
Which of the following represents a situation in which auditors may disclose client information
to outside parties?
Answer
Bringing working papers to a professional CPA workshop as an example of quality work
Complying with a validly issued and enforceable subpoena or summons
Showing the client’s bank statement to a neighbor who is a shareholder to emphasize its cash
position
Explaining to the local television news station why the client is likely to miss payroll in the
forthcoming periods
Question 13
The significance of the bill of lading is to provide which of the following?
Answer
The warehouse personnel with the product that must be shipped to customers
Invoices to customers for proper collection
A credit application for customer approval
Evidence of title transfer of goods to customers
Question 14
A control that may be implemented to ensure all sales that occur are recorded in the general
ledger includes which of the following?
Answer
Use of prenumbered shipping, invoice and sales documents
Use of prenumbered statements, inventory lists and credit memos
Reconciliation of invoices with customer statements
Use of pre-authorized price lists
Question 15
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Document Details
University
Strayer University
Subject
Accounting