Question

1. In an audit of an issuer, an auditor is least likely to include which of the following information related to a critical audit matter in the audit report?

A. Description of the principal considerations that led the auditor to determine that the matter was a critical audit matter.

B. A statement that disclaims the auditor's responsibility for critical audit matters.

C. Reference to relevant financial statement accounts that relate to the critical audit matter.

D. Description of how the critical audit matter was addressed in the audit.

2. Which one of the below statements best describes the concept of materiality?

A. Information that is likely to be viewed by a reasonable investor as altering the mix of available information.

B. Information that meets strict quantitative thresholds.

C. Information that directly impacts the income statement.

D. Information that is not likely to influence the decisions of a reasonable investor.

3. Which of the following statements regarding directional testing is correct?

A.In order to test the existence assertion, an auditor may select a sample of items and trace to their corresponding source documentation.

B.In order to ensure that an asset has not been overstated, an auditor may want to vouch to source documentation.

C.In order to ensure that an expense has not been understated, an auditor may want to test the existence assertion.

D.In order to test the completeness assertion, an auditor may select a sample of items from the accounting records, and vouch to their corresponding source documentation.

Answer 1

1. In an audit of an issuer, an auditor is least likely to include which of the following information related to a critical audit matter in the audit report?

-B) A statement that disclaims the auditor's responsibility for critical audit matters.

2. Which one of the below statements best describes the concept of materiality?

-A. Information that is likely to be viewed by a reasonable investor as altering the mix of available information.

3. Which of the following statements regarding directional testing is correct?

-both B and C-

B.In order to ensure that an asset has not been overstated, an auditor may want to vouch to source documentation.

C.In order to ensure that an expense has not been understated, an auditor may want to test the existence assertion.