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Auditing Theory Test Bank

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Auditing Theory Test Bank

Select the best answer for each of the

8. An auditor's working papers will generally be least
following questions. 
likely to include documentation showing how the
a) Client's schedules were prepared
1. Broadly defined, the subject matter of any audit
b) Engagement had been planned
consists of
c) Client's system of internal control had been
a)Financial statements
reviewed and evaluated
b) Economic data
d) Unusual matters were resolved
c) Assertions
d) Operating data
9. Which of the following sampling methods would be
most appropriate in performing tests of controls over
authorization of cash disbursements
2. The third standard of field work states that a) Attributes
sufficient competent evidential matter may in part be b) Variables
obtained through the following methods except c) Ratio
a) Inspection d) Stratified
b) Observation
c) Confirmation 10. Analytical procedures used in the overall review
d) Reconciliation stage of an audit generally include
a) Considering unusual or unexpected account
balances that were not previously identified
3. If an auditor believes that material error or fraud b) Performing test of transactions to corroborate
exist, the auditor should management's financial statement assertions
a) Consider the implications and discuss the c) Gathering evidence concerning account balances
matter with appropriate levels of management that have not changed from the prior year
b) Make the investigation necessary to determine d) Re-testing control procedures that appeared to be
whether errors or fraud have in fact occurred ineffective during the assessment of control risk
c) Request that management investigate whether
errors or fraud have in fact occurred 11. Results of the financial statement audit are
d) Consider whether errors or fraud where the result communicated to users through
of employee's failure to comply with specific controls a) Financial statement
b) Written management assertion
c) Audit report
4. Which of the following is not normally performed in d) None of the above
the pre-planning or pre-engagement phase?
a) Deciding whether to accept or reject an audit 12. What is the primary difference between financial
engagement reporting risk and audit risk?
b) Inquiring from predecessor auditor a) The application of accounting principles
c) Preparing an engagement letter b) Responsibilities of the respective parties
d) Making a preliminary estimate of materiality involved
c) Demands of users of financial statements
d) Risks of being sued by third parties
5. On the basis of the audit evidence gathered and
evaluated, an auditor decides to increase the 13. Relationship between control risk and detection
assessed level of control risk from that originally risk is ordinarily
planned. To achieve an overall audit risk level that is a) Parallel
substantially the same as the planned audit risk b) Inverse
level, the auditor would c) Direct
d) Equal
a) Decrease substantive testing
b) Increase inherent risk 14. A representation letter issued by a client
c) Decrease detection risk a) Is essential for the preparation of the audit
d) Increase materiality levels program
b) Is a substitute for testing
6. An effective internal control c) Does not reduce the auditor's responsibility
a) Cannot be circumvented by management d) Reduces the auditor's responsibility only to the
b) Can reduce the cost of an external audit extent that it is relied upon
c) Can prevent collusion among employees
d) Eliminates risks and potential loss to the 15. The recruitment of senior management for an
organization assurance client, such as those in a position to affect
the subject of the assurance engagement may least
7. In auditing through a computer, the test data likely create
method is used by auditors to test the a) Self-interest threat
a) Accuracy of input data b) Advocacy threat
b) Validity of the output c) Intimidation threat
c) Procedures contained within the program d) Familiarity threat
d) Normalcy of distribution of test data

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transactions with suppliers

c) Labor difficulties or shortages of important
supplies
16. In reviewing the audit work performed, the
d) Compliance with capital or other statutory
engagement partner
requirements
a) Must review all audit documentation
b) Need not review all audit documentation,
23. Which of the following procedures is not included
but may do so
in a review engagement on a nonpublic entity
c) Need not review all audit documentation
a) Inquiries of management
d) Must ask the staff performing the audit work to
b) Inquiries regarding events subsequent to the
sign the audit report
balance sheet date
c) Any procedures designed to identify relationships
17. The independent auditor lends credibility to
among data that appear to be unusual
client’s financial statements by
d) A study and evaluation of internal control
a) Maintaining a clear-cut distinction between
structure
management’s representations and the auditor’s
representation
24. In planning the audit engagement, the auditor
b) Testifying under oath about client’s financial
should consider each of the following except
statements
a) The kind of opinion that will likely be given
c) Stating in the auditor’s management letter that
b) Matters relating to the entity’s business and the
the examination was made in accordance with
industry in which it operates
generally accepted auditing standards
c) The entity’s accounting policies and procedures
d) Attaching an auditor’s opinion to the client’s
d) Anticipated levels of control risk and materiality
financial statements

18. The most difficult type of misstatement to detect 25. What assurance is provided by the practitioner in
is fraud based on  an agreed-upon procedures engagement?
a) The over-recording of transactions a) Reasonable
b) The non-recording of transactions b) Absolute
c) Recorded transactions in subsidiaries c) Moderate
d) Related party receivables d) No assurance

19. Assuming a recurring audit, in which of the

26. To test for unsupported entries in the journal, the
following situations would the auditor be unlikely to
direction of audit testing should be from the
send a new engagement letter to the client?
a) Journal entries
a) A recent change in partner and/or staff
b) Ledger entries
involved in the audit engagement
c) Original source documents
b) A change in the terms of engagement
d) Externally generated documents
c) A recent change of client management
d) A significant change in the nature or size of the
27. For good internal control, the purchasing
client's business
department should not be responsible for
a) Authorizing the acquisition of goods
20. When an auditor expresses an adverse opinion
b) Finding the lowest cost vendor
he/sheshould disclose the substantive reasons for
c) Reviewing the vendors catalog descriptions and
such anopinion in an explanatory paragraph
prices for standardized items
a) Within the notes to the financial statements
d) Designing the purchase order form
b) Preceding the opinion paragraph
c) Following the opinion paragraph
28. Involves tracing a few transactions through the
d) Preceding the introductory paragraph
accounting system
a) Test of controls
21. Tolerable error means
b) Walk-through test
a) An error that arises from an isolated event that
c) Analytical procedures
has not recurred other than on specifically
d) Substantive procedures
identifiable occasions and is therefore not
representative of errors in the population
29. This exists, when other information, not related
b) An error that the auditor expects to be present in
to matters appearing in the financial statements, is
the population
incorrectly stated or presented
c) The maximum error in a population that the
a) Material inconsistency
auditor is willing to accept
b) Material misstatement
d) The possibility that the auditor's conclusion, based
c) Material misstatement of fact
on a sample may be different from the conclusion
d) Material error affecting the other information
reached if the entire population were subjected to
the same audit procedure
30. Who appoints the members of the Board of
Accountancy
22. Examples of events or conditions, which
a) The chairman of BOA
individually or collectively, may cast significant doubt
b) The president of the Philippines
about the going concern assumption include the
c) The chairman of the PRC
following except
d) The president of PICPA
a) Net liability or net current liability position
b) Change from credit to cash-on-delivery

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referred to as
a) Special purpose financial statements
b) Special purpose framework
c) General purpose financial statements
31. An auditor is required to obtain an understanding d) Specific purpose financial statements
of the entity's business, including business cycles
and reasons for business fluctuations. What is the
audit purpose most directly served by obtaining this
understanding?
a) To enable the auditor to accurately identify
38. An auditor plans to apply substantive tests to the
significant deficiencies in internal control
details of asset and liability accounts as of an interim
b) To assist the auditor in accurately
date rather than as of the balance sheet date. The
interpreting information obtained during an
auditor should be aware that this practice
audit
a) Eliminates the use of certain statistical sampling
c) To allow the auditor to more accurately perform
methods that would otherwise be available
tests of controls
b) Presumes that the auditor will reperform the tests
d) To decide whether it will be necessary to perform
of the balance sheet date
analytical procedures
c) Should be especially considered when there are
rapidly changing economic conditions
32. Which of the following is not true about the
d) Potentially increases the risk that errors
report release date?
that exist at the balance sheet date will not be
a) It is defined as the date after which existing
detected
documentation must not be deleted, and
additions to the documentation file must be
39. Close family include the following, except
documented as such
a) Parent
b) It is often the date on which the report is delivered
b) Sibling
to the client
c) Non-dependent child
c) It is the date on which the auditor grants the client
d) Spouse
permission to use the report
d) It is used to define the beginning of the retention
40. A computer-assisted audit technique that is most
period
likely to be effective in a continuous auditing
environment is
33. An auditor should not issue a report on a) Parallel simulation
a) Quarterly financial information b) Controlled reprocessing
b) Internal control c) Embedded audit modules
c) Management performance d) Transaction tripping
d) The achievability of forecasts
41. Which of the following is not prohibited by the
34. Which of the following procedures would an
Code of Professional Ethics for CPAs?
auditor most likely perform to obtain evidence about
a) Advertising and solicitation of clients
the occurrence of subsequent events?
b) Payment of commissions to obtain a client
a) Confirming a sample of material accounts
c) Receiving a contingent fee on a tax case
receivable established after year-end
before the Bureau of Internal Revenue
b) Comparing the financial statements being
d) Offering employment to a staff member of another
reported on with those of the prior period
CPA without first informing the CPA
c) Investigating personnel changes in the accounting
department occurring after year-end
42. The management's assessment of the entity's
d) Inquiring as to whether any unusual
ability to continue as a going concern covers a period
adjustments were made after year-end
of
a) Not longer than 12 months from balance sheet
35. To which of the following matters would
date
materiality limits not apply when obtaining written
b) At least 12 months from the balance sheet
client representations?
date
a) Violations of state labor regulations
c) Not longer than 12 months from the date of audit
b) Disclosure of line-of-credit arrangements
report
c) Information about related party transactions
d) At least 12 months from the date of audit report
d) Instances of fraud involving management
43. To obtain evidential matter about control risk, an
36. Who ultimately determines the scope of the auditor selects tests from a variety of techniques
audit? including
a) The auditor a) Inquiry
b) The client b) Analytical procedures
c) Both a and b c) Calculation
d) Neither a nor b d) Confirmation

37. Financial statements prepared in accordance with

44. The need for independent audits of financial
a financial reporting framework designed to meet the
statements can be attributed to all of the following
financial information needs of specific users are
conditions except

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a) Remoteness b) Performing predictable further audit procedures

b) Consequence c) Performing substantive procedures at an interim
c) Complexity of subject matter date instead of at period end
d) Validity d) Emphasizing to the audit team the need to
maintain professional skepticism in gathering
45. After issuing a report an auditor includes that an and evaluating audit evidence
auditing procedure considered necessary at the time
of the examination was omitted from the 51. The need for assurance services arises for all of
examination. The auditor should first the following reason except
a) Undertake to apply the omitted procedure or a) Potential bias in providing information
alternative procedures that would provide a b) Closeness between a user and the
satisfactory basis for the auditor's opinion organization
b) Assess the importance of the omitted c) Complexity of the processing systems
procedure to the auditor's ability to support d) Remoteness between a user and the organization
the opinion expressed on the financial
statements taken as a whole
52. Which one of the following is not a key attribute
c) Notify the audit committee or the board of
needed to perform assurance?
directors that the auditor's opinion can no longer be
a) Subject matter knowledge
relied upon
b) Independence
d) Review the results of other procedures that were
c) Established criteria or standards
applied to compensate for the one omitted or to
d) Accounting skills
make its omission less important
53. Which one of the following is not part of the
46. This quality control element requires a CPA firm
attest process?
to establish policies and procedures to provide it with
a) Providing the accuracy of the books and
reasonable assurance that engagements are
records
performed in accordance with professional standards
b) Gathering evidence about assertions
and regulatory and legal requirements, and that the
c) Evaluating evidence against objective criteria
firm or the engagement partner issue reports that
d) Communicating the conclusions reached
are appropriate in the circumstances
a) Ethical requirements
54. Users of the audit report can reasonably expect
b) Engagement performance
the audited financial statements to be
c) Monitoring
a) Complete and contain many of the important
d) Human resources
financial disclosures
b) Presented fairly according to the substance
47. Communication with a predecessor auditor is
of GAAP
initiated by
c) Free from all errors
a) Management
d) All of the above
b) The successor auditor
c) The audit committee of the board of directors
55. Which of the following services is the broadest
d) The chair of the board of directors
and most inclusive
a) Audit
48. In which of the following may confidential
b) Attestation
information not be disclosed?
c) Assurance
a) To comply with the quality review of a member
d) Compliance
body or professional body
b) To submit evidence in the course of legal
56. One reason why an auditor makes an analytical
proceedings
review of the client’s operations is to identify
c) Acquiring information in the course
a) Improper separation of accounting and other
performing professional services and use that
financial duties
information for personal advantages
b) Weakness of a material nature in the system of
d) When consent to disclose information is given by
internal accounting control
the client
c) Unusual transactions
d) Non-compliance with prescribed control
49. The auditor should perform the following risk
procedures
assessment procedures to obtain an understanding
of the entity and its environment, including its
57. Analytical procedures used in planning an audit
internal control, except
should focus on identifying
a) Inquiries of management and others within the
a) Material weaknesses in the internal control
entity
structure
b) Reperformance
b) The predictability of financial data from individual
c) Analytical procedures
transactions
d) Observation and inspection
c) The various assertions that are embodied in the
financial statements
50. The auditor should determine overall responses
d) Areas that may represent specific risk
to address the risks of material misstatement at the
relevant to audit
financial statement level. Such responses most likely
include
58. An integrated test facility (ITF) would be
a) Assigning less experienced staff
appropriate when the auditor needs to

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a) Trace a complex logic path through an application c) Financial statement assertions

system d) Control environment factors
b) Verify processing accuracy concurrently with
processing 66. Which of the following is not a step in an
c) Monitor transactions in an application system auditor's assessment of control risk?
continuously a) Evaluate the effectiveness of internal control with
d) Verify load module integrity for production tests of controls
programs b) Obtain an understanding of the entity's
information system and control environment
59. The rotation of senior accounting personnel can c) Perform tests of details of transactions to
be regarded as a safeguard detect material misstatements in the financial
a) Created by the profession statements
b) Within the client’s systems and procedures d) Consider whether controls can have a pervasive
c) In the work environment effect on financial statement assertions
d) Created within the business community
67. Which of the following procedures would an
60. If certain forms are not consecutively numbered auditor ordinarily perform first in evaluating
a) Systematic sampling may be appropriate management's accounting estimates for
b) Selection of a random sample probably is not reasonableness?
possible a) Develop independent expectations of
c) Stratified sampling should be used management's estimates
d) Random number tables cannot be used b) Consider the appropriateness of the key factors or
assumptions used in preparing the estimates
c) Test the calculations used by management in
developing the estimates
d) Obtain an understanding of how
61. A cash shortage may be concealed by
management developed its estimates
transporting funds from one location to another or by
68. An entity's income statements were misstated
converting negotiable assets to cash. Because of
due to the recording of journal entries that involved
this, which of the following is vital?
debits and credits to an unusual combination of
a) Simultaneous confirmations
expense and revenue accounts. The auditor most
b) Simultaneous bank reconciliations
likely could have detected this fraudulent financial
c) Simultaneous verification
reporting by
d) Simultaneous surprise cash count
a) Tracing a sample of journal entries to the general
ledger
62. Which of the following is most likely to indicate a
b) Evaluating the effectiveness of internal control
significant deficiency relating to a client's anti-fraud
c) Investigating the reconciliations between
programs?
controlling accounts and subsidiary records
a) A broad scope of internal audit activities
d) Performing analytical procedures designed
b) A "whistle-blower" program that encourages
to disclose differences from expectations
anonymous submissions
c) Audit committee passivity when conducting
69. Which of the following is most likely to be unique
oversight functions
to the audit work of CPAs as compared to work
d) Lack of performance of criminal background
performed by practitioners of other professions?
investigations for likely customers
a) Due professional care
b) Competence
63. Which of the following is not an attestation
c) Independence
standard?
d) Complex body of knowledge
a) Sufficient evidence shall be obtained to provide a
reasonable basis for the conclusion that is expressed
70. Which of the following would an auditor most
in the report
likely use in determining the auditor's preliminary
b) The report shall identify the subject matter on the
judgment about materiality?
assertion being reported on and state the character
a) The anticipated sample size of the planned
of the engagement
substantive tests
c) The work shall be adequately planned and
b) The entity's annualized interim financial
assistants, if any, shall be properly supervised
statements
d) A sufficient understanding of internal
c) The results of the internal control questionnaire
control shall be obtained to plan the
d) The contents of the management representation
engagement
letter
64. Proper segregation of functional responsibilities
71. Which of the following conditions identified
calls for separation of the functions of
during fieldwork of an audit is most likely to affect
a) Authorization, execution, and payment
the auditor's assessment of the risk of misstatement
b) Authorization, recording, and custody
due to fraud?
c) Custody, execution, and reporting
a) Checks for significant amounts outstanding at
d) Authorization, payment, and recording
year-end
b) Computer generated documents
65. Control risk should be assessed in terms of
c) Missing documents
a) Specific controls
d) Year-end adjusting journal entries.
b) Types of potential fraud

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72. An auditor ordinarily uses a working trial balance
resembling the financial statements without
footnotes, but containing columns for
a) Cash flow increases and decreases
b) Audit objectives and assertions
c) Reclassifications and adjustments
d) Reconciliations and tick marks
73. The risk that an auditor will conclude, based on
substantive tests, that a material misstatement does
not exist in an account balance when in fact such
misstatement does exist is referred to as
a) Detection risk
b) Sampling risk
c) Non-sampling risk
d) Inherent risk
74. The usefulness of the standard bank confirmation
request may be limited because the bank employee
who completes the form may
a) Be unaware of all the financial relationships
that the bank has with the client
b) Not believe that the bank is obligated to verify
confidential information to a third party
c) Sign and return the form without inspecting the
accuracy of the client's bank reconciliation
d) Not have access to the client's cutoff bank
statement
75. A material weakness is a significant deficiency (or
combination of significant deficiencies) that results in
a reasonable possibility that a misstatement of at
least 'what amount will not be prevented or
detected?
a) An amount greater than zero
b) An amount greater than zero, but at least
inconsequential
c) An amount greater than inconsequential
d) A material amount
76. The existence of audit risk is recognized by the
statement in the auditor's standard report that the
auditor
a) Obtains reasonable assurance about
whether the financial statements are free of
material misstatement.
b) Assesses the accounting principles used and also
evaluates the overall financial statement
presentation.
c) Realizes some matters either individually or in the
aggregate, are important while other matters are not
important.
d) Is responsible for expressing an opinion on the
financial statements, which arc the responsibility of
management.
77. Which of the following services would be most
likely to be structured as an attest engagement?
a) Advocating a client's position in tax matter.
b) A consulting engagement to develop a new
database system for the revenue cycle.
c) An engagement to issue a report addressing
an entity's compliance with requirements of
specified laws.
d) The compilation of a client's forecast information.
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78. Which of the following is ordinarily considered to
be a fraud risk factor?
a) The company's financial statements include
a number of last minute material adjustments.
b) Management regularly informs investors of
forecast information.
c) The company has experienced increasing earnings
over the previous five years.
d) The company's president is included as a member
of the board of directors.
79. Which is least likely to be a question asked of
client personnel during a walk-through in an audit of
the internal control of an issuer (public) company?
a) What do you do when you find an error'?
b) Who is most likely to commit fraud among
your coworkers?
c) What kind of errors have you found?
d) Have you ever been asked to override the process
or controls?
80. An auditor who uses the work of a specialist may
refer to and identify the specialist ill the auditor's
report if the
a) Specialist is also considered to be a related party.
b) Auditor indicates a division of responsibility
related to the work of the specialist.
c) Specialist's work provides the auditor greater
assurance of reliability. 
d) Auditor expresses an "except for" qualified
opinion or an adverse opinion related to the
work of the specialist.
81. Which of the following statements concerning
evidential matter is correct?
a) Appropriate evidence supporting management's
assertions should be convincing rather than merely
persuasive.
b) Effective internal control contributes little to the
reliability of the evidence created within the entity.
c) The cost of obtaining evidence is not an important
consideration to an auditor in deciding what evidence
should be obtained.
d) A client's accounting data cannot be
considered sufficient audit evidence to support
the financial statements.
82. Confirmations of accounts receivable address
which assertion most directly?
a) Completeness
b) Existence
c) Valuation
d) Classification
83. When performing a review of an issuer company,
which is least likely to be included in the CPA's
inquires of management members with responsibility
for financial and accounting matters?
a) Subsequent events
b) Significant journal entries and other adjustments
c) Communications with related parties
d) Unusual or complex situations affecting the
financial statements
84. The adverse effects of events causing an auditor
to believe there is substantial doubt about an entity's
ability to continue as a going concern would most
likely be mitigated by evidence relating to the
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a) Ability to expand operations into new product lines b) Test of controls

in the future. c) Substantive test
b) Feasibility of plans to purchase leased equipment d) Test of a function
at Jess than market value.
c) Marketability of assets that management
91. Accounting control procedures within computer
plans to sell.
processing may leave no visible evidence indicating
d) Committed arrangements to convert preferred
that the procedures were performed. In such
stock to long-term debt.
instances, the auditor should test these controls by
a) Making corroborative inquiries.
85. One reason that an auditor only obtains
b) Observing the separation of duties of personnel.
reasonable, and not absolute, assurance that
c) Reviewing transactions submitted for
financial statements are free from material
processing and comparing them to related
misstatement is
output.
a) Comprehensive basis reporting
d) Reviewing the run manual.
b) Employee collusion
c) Material misstatements
92. If information is for management's use only,
d) Professional skepticism
which of the following forms of CPA association with
86. When an auditor concludes there is substantial
financial information is most likely to result in no
doubt about a continuing audit client's ability to
report being issued?
continue as a going concern for a reasonable period
a) An agreed-upon procedures engagement
of time, the auditor's responsibility is to
b) An audit
a) Issue a qualified or adverse opinion, depending
c) A compilation
upon materiality, due to the possible effects on the
d) A review
financial statements.
b) Consider the adequacy of disclosure about
93. In obtaining an understanding of a manufacturing
the client's possible inability to continue as a
entity's internal control over inventory balances, an
going concern.
auditor most likely would
c) Report to the client's audit committee that
a) Review the entity's descriptions of inventory
management's accounting estimates may need to be
policies and procedures.
adjusted.
b) Perform test counts of inventory during the
d) Reissue the prior year's auditors report and add an
entity's physical count.
explanatory paragraph that specifically refers to
c) Analyze inventory turnover statistics-to identify
"substantial doubt" and "going concern."
slow-moving and obsolete items.
d) Analyze monthly production reports to identify
87. The accountant who is not independent may variances and unusual transactions.
perform which of the following types of
engagements?
a) Audit
94. When auditing merchandise inventory at year-
b) Agreed-upon procedures
end, the auditor performs a purchase cutoff test to
c) Compilation
obtain evidence that
d) Review
a) All goods owned at year-end are included in
the inventory balance.
88. Which of the following should an auditor obtain
b) All goods purchased before year-end are received
from the predecessor auditor prior to accepting an
before the physical inventory count.
audit engagement?
c) No goods held on consignment for customers are
a) Analysis of balance sheet accounts
included in the inventory balance.
b) Analysis of income statement accounts
d) No goods observed during the physical count are
c) All matters of continuing accounting significance
pledged or sold.
d) Facts that might bear on the integrity of
management
95. A company has changed its method of inventory
valuation from an unacceptable one toone in
89. Which is least likely to be a response when an
conformity with generally accepted accounting
auditor has obtained evidence indicating a risk of
principles. The auditor's report on the financial
material misstatement in the area of inventory?
statements of the year of the change should include
a) Request inventory counts at the end of each
a) No reference to consistency.
month.
b) A reference to a prior period adjustment in the
b) Discuss questions of inventory valuation with any
opinion paragraph.
other auditors involved with the audit.
c) An explanatory paragraph explaining the
c) Make oral inquiries of major suppliers in addition
change.
to written confirmations.
d) A justification for making the change and the
d) Perform inventory observations on an
impact of the change on reported net income.
unannounced basis.

90. The independent auditor selects several
transactions in each functional area and traces them
through the entire system, paying special attention
to evidence about whether or not the controls are in
operation. This is an example of a(n)
a) Application test
96. An abnormal fluctuation in gross profit that might
suggest the need for extended audit procedures for
sales and inventories would most likely be identified
in the planning phase of the audit by the use of
a) Tests of transactions and balances
b) A preliminary review of internal control

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c) Specialized audit programs

d) Analytical procedures

97. Which of the following statements best describes

the ethical standard of the profession pertaining to
advertising and solicitation?
a) All forms of advertising and solicitation are
prohibited.
b) There are no prohibitions regarding the manner in
which CPAs may solicit new business.
c) A CPA may advertise in any manner that is
not false, misleading, or deceptive.
d) A CPA may only solicit new clients through mass
mailings.

98. A note to the financial statements of a bank

indicates that all of the records relating to its
business operations are stored on magnetic disks;
and that there are no emergency back-up systems or
duplicate disks stored since the bank and their
auditors consider the occurrence of a catastrophe to
be remote. Based upon this, one would expect the
auditor's report to express
a) An adverse opinion
b) An "except for" opinion
c) An unqualified opinion
d) A qualified opinion

99. Which of the following is not typically performed

when accountants are performing a review of the
financial statements of a nonissuer?
a) Analytical procedures applied to financial data
b) Inquiries about significant subsequent events
c) Inquiries of the client's attorney about legal
matters
d) Obtaining an understanding of the accounting
principles followed by the client's industry

100. Which of the following is least likely to be a

restricted use report?
a) A report on financial statements prepared
following a comprehensive basis of accounting
other than generally accepted accounting
principles.
b) A report on internal control significant deficiencies
noted in an audit.
c) A required communication with the audit
committee.
d) A report on compliance with aspects of contractual
agreements.

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