an audit firm is mainly focusing on one major client business and they are receiving excessive fees from a single client. Which of the following threats to objectivity does the above circumstance give rise to? 1. Intimidation threat 2. Self-review threat a. Neither 1 nor 2 b. Both 1 and 2 c. 2 only d. 1 only

an audit firm is mainly focusing on one major client business and they are receiving excessive fees from a single client. Which of the following threats to objectivity does the above circumstance give rise to? 1. Intimidation threat 2. Self-review threat a. Neither 1 nor 2 b. Both 1 and 2 c. 2 only d. 1 only

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter1: Comprehensive Cases

Section1.7: Navistar International Corporation

Problem 2Q

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5. If an audit firm is giving advice on accounting or control systems and helping the client with calculations of numbers in the Financial Statements, then auditing it. You are required to identify from the following threats to objectivity does the above circumstance gives rise to? 1. Intimidation threat 2. Self-review threat a. 1 only b. Both 1 and 2 c. Neither 1 nor 2 d. 2 only
1. What is the implications of management refusal to sign management representation letter. 2. Factors that indicate a client may not remain going concern with degree of subjectivity and judgement 3. If one of the element of fraud triangle is not present can fraud still be perpetrated. 4. Primary difference between fraud and error. 5. Identify basic type of reports other than standard unqualified report. 6. 7. 8. 9. 10.
Which of the following would a fraudster perceive as a pressure?A. lack of management oversightB. everyone does itC. living beyond one’s meansD. lack of an internal audit function
TRUE OR FALSE1. WHEN OBTAINING AN UNDERSTANDING OF CONTROL ACTIVITIES OF A RELATIVELY SMALL CLIENT, THE AUDITOR IDENTIFIED NO CONTROL ACTIVITIES, THE AUDITOR WOULD PROBABLY SET A HIGH ASSESSMENT OF CONTROL RISK2. WHEN A COMPANY DESIGNS AND IMPLEMENTS INTERNAL CONTROLS, COST OF THE CONTROLS IS NOT A VALID CONSIDERATION.3. AUDITING STANDARDS PROHIBIT RELIANCE ON THE WORK OF INTERNAL AUDITORS DUE TO THE LACK OF INDEPENDENCE OF THE INTERNAL AUDITORS
35. S1. Internal audit does not have responsibility for the prevention or detection of fraud and corruption. S2. Internal audit may be requested by management to assist with fraud examination work. Which of the following statements is/are true? Group of answer choices Statements I and II Statement II only Statement I only None of the statements
14-Which of the following statements is not true? a. Internal control system reduces the errors and fraud b. Management fraud is more difficult to detect than employee fraud c. All of these statements are true. d. The auditor’s main duty is the detection and prevention of fraud
4. Overall risk management arrangements are the main preoccupation of the internal auditor who is concerned with all those controls fundamental to the achievement of organizational objectives. It is main . On internal and external .... audit? A. Similarity B. Difference С. No D. Equality connectio n 5. From taking care of risk perspective what should be done if the Impact of risk is high and likelihood of risk is high ? A. Terminate B. Transfer С. Тake more D. Communi cate
Which one of the following is not an objective of a system of internal controls? Select one: 1. Overstate liabilities in order to be conservative 2. Enhance the accuracy and reliability of accounting records 3. Safeguard company assets 4. Reduce the risks of errors
2. The auditors who find that the client has committed an illegal act would be most likely to withdraw from the engagement when the: Select one:a. Illegal act has material financial statement implications.b. Auditors cannot reasonably estimate the effect of the illegal act on the financial statements.c. Illegal act has received widespread publicity.d. Management fails to take appropriate corrective action.
2. Generally, audit evidence cannot be obtained entirely through substantive procedures True or false? 3. A system of authorizations and approvals is a good example of internal financial controls. True or false?
Question 2 (i) Which one of the following statements is true?A. Conflicts of interests between management and stakeholders can result inbankruptcies or major frauds.B. It is the responsibility of internal audit to design and monitor controls that reasonablyassure that objectives are met.C. Corporate governance addresses the principal–agent relationship betweenmanagement and directors on the one hand and the relationship between the companyand suppliers on the other.D. The management board approves the mission, vision, objectives and strategy of theentity. (ii) The agency theory stipulates that:A. Self-interest plays no role and is irrelevant.B. The management board is the agent.C. The management board is the principal.D. Information asymmetry is absent in corporate governance. (iii) Which of the following is not something performed by the company’s board?A. Day to day supervision of the sales manager.B. Appoints the corporate officers responsible for managing the company…
4. Overall risk management arrangements are the main preoccupation of the internal auditor who is concerned with all those controls fundamental to the achievement of organizational objectives. It is main ... On internal and external audit? A. Similarity B. Difference C. No D. Equality connection 5. From taking care of risk perspective what should be done if the Impact of risk is high and likelihood of risk is high ? A. Terminate B. Transfer C. Tolerate D. Communica te 6. From taking care of risk perspective what should be done if the Impact of risk is low and likelihood of risk is low? A. Terminate B. Transfer C. Tolerate D. Communica te