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CPA-Test – Certified Public Accountant Test: Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, Regulation

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Showing 10–12 of 20 questions

Question 10 (Business Environment and Concept)

When the overall price level is rising, nominal interest rates tend to be:

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    Unaffected by changes in the price level.
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    Falling.
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    Rising.
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    None of the above.
Question 11 (Auditing and Attestation)

The element of the audit planning process most likely to be agreed upon with the client before implementation of the audit strategy is the determination of the:

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    Evidence to be gathered to provide a sufficient basis for the auditor's opinion.
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    Procedures to be undertaken to discover litigation, claims, and assessments.
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    Pending legal matters to be included in the inquiry of the client's attorney.
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    Timing of inventory observation procedures to be performed.
Question 12 (Auditing and Attestation)

Which of the following is not an audit procedure that the independent auditor would perform concerning litigation, claims, and assessments?

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    Obtain assurance from management that it has disclosed all unasserted claims that the lawyer has advised are probable of assertion and must be disclosed.
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    Confirm directly with the client's lawyer that all claims have been recorded in the financial statements.
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    Inquire of and discuss with management the controls adopted for identifying, evaluating, and accounting for litigation, claims, and assessments.
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    Obtain from management a description and evaluation of litigation, claims, and assessments existing at the balance sheet date.