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Next Quiz on April 28th!


Auditing Quiz

Accountants are lifelong students. The weekly quizzes are open
to everyone in the wonderful field of accounting, business
and the study of accounting. Good luck!

This week's quiz brought to you by:
Barbara W. Scofield, PhD, CPA - Associate Professor of Accounting
and Director of the Financial Accounting Concentration
University of Dallas
Irving, Texas



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1 - ABC Company is a private company that keeps its books on a modified cash basis and uses an accounting firm solely to complete its tax forms. However, its banker has asked for GAAP financial statements. What service does ABC Company need?
Audit
Attestation Service
Assurance Service
Compilation and Review

2 - ABC Company is a public company that must file its first 10-K with the SEC this year. What service does ABC Company need?
Audit
Attestation Service
Assurance Service
Compilation and Review

3 - ABC Company is a private company whose Board of Directors wants its new internal control system evaluated. What service does ABC Company need?
Audit
Attestation Service
Assurance Service
Compilation and Review

4 - ABC Company is launching a website that will allow customers to order goods, track their orders, and make payments. The company wants to be sure that its customer information will be processed accurately and securely. What service does ABC Company need?
Audit
Attestation Service
Assurance Service
Compilation and Review

5 - ABC Company Receiving Department affixes a number to each fixed asset with a value more than $1,000 and records its location and the responsible employee. During the audit, each employee is called by phone and asked to read the numbers on each of the fixed assets assigned to him or her. This provides evidence of:
Existence
Completeness
Valuation
This does not provide evidence of existence, completeness or valuation.

6 - ABC Company Receiving Department affixes a number to each fixed asset with a value more than $1,000 and records its location and the responsible employee. During the audit, an auditor selects a random sample of fixed asset numbers and visits the listed locations in order to match the asset number with a tangible asset in use.
Existence
Completeness
Valuation
This does not provide evidence of existence, completeness or valuation.

7 - ABC Company Receiving Department affixes a number to each fixed asset with a value more than $1,000 and records its location and the responsible employee. During the audit, an auditor matches cash disbursements over $1,000 with the fixed assets acquired this year and identifies transactions that may indicate unrecorded fixed assets.
Existence
Completeness
Valuation
This does not provide evidence of existence, completeness or valuation.

8 - ABC Company Receiving Department affixes a number to each fixed asset with a value more than $1,000 and records its location and the responsible employee. During the audit, the auditor selects a random sample of asset acquisition numbers and compares the recorded asset value with the invoice value.
Existence
Completeness
Valuation
This does not provide evidence of existence, completeness or valuation.

9 - The underlying risk of having a misstatement in an account is called:
Inherent Risk
Control Risk
Detection Risk
Audit Risk

10 - The risk that a misstatement in an account will not be identified through the ongoing features of the accounting information system is called:
Inherent Risk
Control Risk
Detection Risk
Audit Risk

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