CTP Oreamuno

Accounting
Sub-area: Accounting Tools for Decisions Making
Study unit: Auditing

Auditing test

1) A person authorized to review and verify the accuracy of financial records and ensure
that companies comply with tax laws, is called =auditor

2) Write down four activities performed by an auditor:

a) to point out discrepancies in accounting methods
b) Auditors assess financial operations
c) They are tasked with tracking cash flow from beginning to end and verifying that an
organization’s funds are properly accounted for.

d) to verify the accuracy of financial records

3) What’s the main duty of an auditor?

A/the main duty of an auditor is to determine whether financial
statements follow generally accepted accounting principles (GAAP). To meet this
requirement, auditors inspect accounting data, financial records and operational aspects
of a business and take detailed notes on each step of the process, known as an  audit
trail.

4) Explain with three reasons the concept Audit Trail.

A/ -is when auditors inspect accounting data of a business and take detailed notes
- Is when auditors inspect financial records of a business and take detailed notes
- Is when auditors inspect operational aspects of a business and take detailed
notes

5) What’s the procedure in order to present auditor’s findings?

A/ are presented in a report that appears as a preface in financial statements. Separate,
private reports may also be issued to company management and regulatory authorities
as well.

6) Explain the difference between the concept “public company” in Costa Rica and
“public company” in USA.
The public companies of Costa Rica belong to Costa Rica. In exchange, the public
companies in the United States are those that sell shares on the stock market.
7) Which entity is in charge of establishing official auditing procedures?}

procedures are established by the International Auditing and Assurance Standards

Board (IAASB), a committee of the International Federation of Accountants (IFAC). 

8) An unqualified auditor’s opinion is a statement that:

( ) judges the financial position of the company or interpret financial data.

( ) indicates that the information provided by the auditee is limited in scope and
GAAP are not being applied correctly. 
( ) is issued when the auditor believes that all changes, accounting policies and
their
application and effects, have not accurately been disclosed.
( x ) indicates that the information provided by the auditee is conformed to GAAP
and
the data’s scope is good enough to evaluate financial statements. 

9) An qualified auditor’s opinion is a statement that:

( ) It is an auditor's opinion that suggests the financial information provided by a

company contained information good in scope and in compliance to GAAP.
( ) the financial position of the company is optimal.
( ) indicates that the information provided by the auditee is limited in scope and
GAAP are not being applied correctly, but not pervasive. 
( ) is issued when the auditor believes that all changes, accounting policies and
their
application and effects, have not accurately been disclosed.

10) A situation in which the auditor must issue a qualified opinion is:
( ) when there is accurate calculation of financial statements of a company.
( x ) when there are inadequate disclosures in the footnotes to the financial
statements.
( ) when the accounting procedures of the auditee are in compliance to GAAP.
( ) when the company is obtaining high net losses.

11) On May 6, 2020 Blue Bird Energy Corporation filed a lawsuit against Lamarck & Johnson
Farming Company for a land border conflict. At the end of May, the Lamarck & Johnson
 Farming Company’s accountant made a footnote in the financial statements of the company
indicating a potential loss due to the lawsuit against the corporation.
The correct auditing approach regard to this situation is that:
( ) this footnote is inappropriate, an unqualified opinion must be issued by the
auditor.
( ) this footnote must be writing down by the auditor not by the accountant.
( ) the footnote is appropriate.
( x ) this footnote is inappropriate, a qualified opinion must be issued by the
auditor.

12) According to an auditing of Golden Ace Corporation’ financial statements at the end
of 2019, SWAP adjustments on purchases were made based on PER and SWAP
adjustments on sales were made based on SER. The auditing procedure is as follows:
( x ) issuing a qualified opinion pointing out accounting procedures are not according
to
GAAP.
( ) issuing an unqualified opinion pointing out accounting procedures are not
according
to GAAP.
( ) issuing a qualified opinion pointing out accounting procedures are according to
GAAP.
( ) issuing an unqualified opinion pointing out accounting procedures are according
to GAAP.

12) AK-47 Company is a partnership, according to an external auditing report Ricardo

Sibaja (general manager) and Claudia Rojas (internal controller) receive fees as
payment for their work for the company instead of salary. According to auditing
approach, this procedure:
( ) is an strategy of the company for tax evasion.
( x ) is correct and a qualified opinion must be issued by auditors.
( ) is according to consistency principle of GAAP .
( ) is incorrect and a unqualified opinion must be issued by auditors.

13) Auditors who are hired by organizations to provide in-house, independent and
objective evaluations of financial and operational business activities, including corporate
governance, are known as = internal auditors

14) Companies that are tasked with providing an objective, public opinion concerning
the organization's financial statements and whether they fairly and accurately represent
the organization's financial position, are known as = Government auditors 
15) Auditors employed through the government ensure revenues are received and
spent according to laws and regulations, are known as

= external auditors.

16) Auditors who are hired by organizations to provide in-house, independent and
objective evaluations of financial and operational business activities, including corporate
governance= internal auditors

17) Auditors who are specialize in crime and are used by law enforcement organizations
are called = Forensic auditors 

18) Write down four requirements to be an external auditor:

a) they require a Certified Public Accountant (CPA) license
b) they require a professional certification awarded by the American Institute of Certified
Public Accountants
c) they require a CPA designation and two years of professional work experience in
public accounting.

d) they require these auditors also need to obtain state CPA certification

18) The main requirement to be an internal auditor is: a bachelor's degree in subjects
such as finance and other business disciplines, together with appropriate experience
and skills, are often acceptable.

19) Translate the following words and expressions from English to Spanish.

English Spanish
Accuracy Exactitud
Assess Evaluar
Tracking seguimiento
Auditing findings Resultados de la auditoría
Taxation tributación
Disclose  
revelacion

Scope examinar
Inadequate disclosures revelaciones inadecuadas
Embezzlement and fraud malversación y fraude
Law enforcement Cumplimiento de la ley
Bachelor's degree licenciatura