CPA Auditing and Attestation practice questions, page 26 of 41, with answer review and explanations.
Question 126
Which of the following best describes what is meant by the term generally accepted auditing standards?
Rules acknowledged by the accounting profession because of their universal application.
Pronouncements issued by the Auditing Standards Board.
Measures of the quality of the auditor's performance.
Procedures to be used to gather evidence to support financial statements.
Question 127
According to the profession's ethical standards, which of the following events may justify a departure from a Statement of Financial Accounting Standards?
Option A
Option B
Option C
Option D
Question 128
Which of the following conditions or events most likely would cause an auditor to have substantial doubt about an entity's ability to continue as a going concern?
Cash flows from operating activities are negative.
Research and development projects are postponed.
Significant related party transactions are pervasive.
Stock dividends replace annual cash dividends.
Question 129
For an entity that does not receive governmental financial assistance, an auditor's standard report on financial statements generally would not refer to:
Significant estimates made by management.
An assessment of the entity's accounting principles.
Management's responsibility for the financial statements.
The entity's internal control. D
Question 130
Which of the following procedures should an auditor generally perform regarding subsequent events?
Compare the latest available interim financial statements with the financial statements being audited.
Send second requests to the client's customers who failed to respond to initial accounts receivable confirmation requests.
Communicate material weaknesses in the internal control structure to those charged with governance.
Review the cut-off bank statements for several months after the year-end.