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/ III. THE AUDITORS’ RESPONSIBILITY / Quiz_Ch2&3_2023Sept1

BSA 31P(2018)-B (LEC) Auditing and

Assurance Principles

Started on Friday, September 1, 2023,

4:30 PM
State Finished
Completed on Friday, September 1, 2023,
4:55 PM
Time taken 25 mins 1 sec
Grade 30.00 out of 32.00 (93.75%)

Question 1
Correct Mark 10.00 out of 10.00 Flag question

For the following situations, indicate

whether it is a possible act of ERROR,
FRAUD, or NONCOMPLIANCE.

Clerical mistakes
in the ERROR
processing of

transactions

Unauthorized
alteration of FRAUD
computer files 

Misapplication
of accounting ERROR
policies 

Payments
without proper NONCOMPLIANCE
documentation 

Disrespecting or
Harassing other NONCOMPLIANCE
employees or

customers.

Missing FRAUD
documents

Failure to wear
the necessary
personal
protective NONCOMPLIANCE
equipment (PPE)

when
undertaking
specific tasks.

Omission of an
entry to record a
FRAUD
bank transfer to
cover a cash 
shortage

Purchasing at
prices
significantly NONCOMPLIANCE
above or below 
market price.

Negative cash
flows from FRAUD
operations 

The correct answer is:

Clerical mistakes in the processing of transactions
→ ERROR,
Unauthorized alteration of computer ales → FRAUD,

Misapplication of accounting policies → ERROR,

Payments without proper documentation →

NONCOMPLIANCE,

Disrespecting or Harassing other employees or

customers. → NONCOMPLIANCE,

Missing documents → FRAUD,

Failure to wear the necessary personal protective

equipment (PPE) when undertaking speciac tasks.
→ NONCOMPLIANCE,
Omission of an entry to record a bank transfer to
cover a cash shortage → FRAUD,

Purchasing at prices signiacantly above or below

market price. → NONCOMPLIANCE,

Negative cash bows from operations → FRAUD

Question 2
Correct Mark 1.00 out of 1.00 Flag question

The generally accepted auditing

standards of aeld work include a
requirement that the auditors obtain
succient appropriate audit evidence.

True 

False

The correct answer is 'True'.

Question 3
Correct Mark 1.00 out of 1.00 Flag question

Core value of the Code of Ethics.

Answer:
Integrity


The correct answer is: INTEGRITY

Question 4
Correct Mark 1.00 out of 1.00 Flag question

Material misstatements may emanate

from inadequacy of accounting
records.

True

False 

The correct answer is 'False'.

Question 5
Correct Mark 1.00 out of 1.00 Flag question

A threat to independence that arises

when an auditor audits his or her own
work or the work of a colleague.

Answer:
Self-review threat


The correct answer is: SELF-REVIEW

Question 6
Correct Mark 1.00 out of 1.00 Flag question

Partners in CPA arms usually have the

responsibility for signing the audit
report.

True 

False

The correct answer is 'True'.

Question 7
Correct Mark 1.00 out of 1.00 Flag question

If the auditors discover illegal acts by

a client, they ordinarily must
immediately resign from the
engagement.

True

False 

The correct answer is 'False'.

Question 8
Correct Mark 1.00 out of 1.00 Flag question

The responsibility for the detection

and prevention of errors, fraud and
noncompliance with laws and
regulations rests with the external
auditor.

True

False 

The correct answer is 'False'.

Question 9
Correct Mark 1.00 out of 1.00 Flag question

An independence threat that arises if

the auditor is too personally close to
or familiar with employees, occers, or
directors of the client company.

Answer:
Familiarity Threat


The correct answer is: FAMILIARITY

Question 10
Correct Mark 1.00 out of 1.00 Flag question

Fraudulent anancial reporting is most

likely to be committed by line
employees of the company.

True

False 

The correct answer is 'False'.

Question 11
Correct Mark 1.00 out of 1.00 Flag question

It relates to embezzlement of
receipts.

Answer:
Misappropriation of assets


The correct answer is: MISAPPROPRIATION

Question 12
Correct Mark 1.00 out of 1.00 Flag question

The auditors are primarily responsible

for preparing the anancial statements
and expressing an opinion on whether
they follow generally accepted
auditing standards.

True

False 

The correct answer is 'False'.

Question 13
Correct Mark 1.00 out of 1.00 Flag question

If the misstatement is perpetrated by

the management, it is considered as
fraud but if it is committed by an
employee, it is deemed an error.

True

False 

The correct answer is 'False'.

Question 14
Incorrect Mark 0.00 out of 1.00 Flag question

Usually, the auditor designs

procedures to uncover fraud or error
that could materially affect the
anancial statements.

True

False 

The correct answer is 'True'.

Question 15
Correct Mark 1.00 out of 1.00 Flag question

An audit should be designed to

provide reasonable assurance of
detecting all illegal acts.

True

False 

The correct answer is 'False'.

Question 16
Correct Mark 1.00 out of 1.00 Flag question

The pronouncements of the

International Auditing Assurance
Standards Board do not override the
national auditing standards of its
members, even when anancial
statements are issued by a
multinational company.

True 

False

The correct answer is 'True'.

Question 17
Correct Mark 1.00 out of 1.00 Flag question

In the auditing environment, failure to

meet auditing standards is often an
accepted practice.

True

False 

The correct answer is 'False'.

Question 18
Correct Mark 1.00 out of 1.00 Flag question

It is usually equally diccult for the

auditor to uncover errors or fraud.

True

False 

The correct answer is 'False'.

Question 19
Correct Mark 1.00 out of 1.00 Flag question

If the client refuses to accept an audit

report that is qualiaed due to
noncompliance with laws and
regulations, the auditor should
withdraw from the engagement and
indicate the reasons to the SEC or
other regulatory body in writing.

True

False 

The correct answer is 'False'.

Question 20
Correct Mark 1.00 out of 1.00 Flag question

An intentional act by one or more

individuals among management,
employees, or third parties, which
results in misrepresentation of
anancial statements.

Answer:
Fraud


The correct answer is: FRAUD

Question 21
Correct Mark 1.00 out of 1.00 Flag question

The management responsibility to

detect and prevent fraud and error is
accomplished by issuing a
representation letter to the auditor.

True

False 

The correct answer is 'False'.

Question 22
Correct Mark 1.00 out of 1.00 Flag question

Fraudulent anancial reporting is often

called 
management fraud .

The correct answer is: MANAGEMENT FRAUD

Question 23
Incorrect Mark 0.00 out of 1.00 Flag question

A peer review in which the peer

reviewers study and appraise a CPA
arm’s system of quality control to
perform accounting and auditing
work.

Answer:
Quality Assurance Review


The correct answer is: SYSTEM REVIEW

Finish review

◀︎ Pre-recorded_Ch3

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