2026 Auditing Practice Questions Test 1 (Chapters 1 4) Test (32 Questions And Complete Answers)

EXAMS AND CERTIFICATIONS 32 Terms | 2026 Auditing Practice Questions Test 1 (Chapters 1 4) Test (32 Questions And Complete Answers)

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Terms in this set 32

The audit objective that all transactions and accounts that should be presented in the financial statements are in fact included is related to which of the PCAOB assertions?

1. Existence
2. Rights and obligations
3. Completeness
4. Valuation

Completeness

Cutoff tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year provide assurance about management's assertion of

1. presentation and disclosure
2. completeness
3. rights and obligations
4. existence

completeness

During an audit of an entity's stockholders' equity accounts, the auditor determines whether there are restrictions on retained earnings resulting from loans, agreements or state law. This audit procedure more likely is intended to verify management's assertion of

1. existence or occurence
2. completeness
3. valuation or allocation
4. presentation and disclosure

presentation and disclosure

The confirmation of an account payable balance selected from the general ledger provides primary evidence regarding which management assertion?

1. Completeness
2. Valuation
3. Allocation
4. Existence

Existence

What type of evidence would provide the highest level of assurance in an attestation engagement?

1. Evidence secured solely from within the entity
2. Evidence obtained from independent sources
3. Evidence obtained indirectly
4. Evidence obtained from multiple internal inquiries

Evidence obtained from independent sources

Which of the following management assertions is an auditor most likely testing if the audit objective states that all inventory on hand is reflected in the ending inventory balance?

1. The entity has rights to the inventory
2. Inventory is properly valued
3. Inventory is properly presented in the financial statements
4. Inventory is complete

Inventory is complete

An auditor traces the serial number on equipment to a nonissuer's sub-ledger. Which of the following management assertions is supported by this test?

1. Valuation and allocation
2. Completeness
3. Rights and obligations
4. Presentation and disclosure

Completeness

Which of the following is not related to ethical requirements of auditors?

1. Due care
2. Professional judgment
3. Independence in appearance
4. Independence in fact

Professional judgment

Which of the following best demonstrates the concept of professional skepticism?

1. Focusing on items that have a more significant quantitative effect on the entity's financial statements
2. Relying more extensively on external evidence rather than internal evidence
3. Evaluating potential financial interests held by auditors in the client
4. Critically assessing verbal evidence received from the entity's management

Critically assessing verbal evidence received from the entity's management

It is always a good idea for auditors to begin an audit with the professional skepticism characterized by the assumption that

1. Financial statements and financial data verifiable
2. The professional status of the independent auditor imposes commensurate professional obligations
3. A potential conflict on interest always exists between the auditor and the management of the enterprise under audit
4. In audits of financial statements, the auditor acts exclusively in the capacity of an auditor

A potential conflict on interest always exists between the auditor and the management of the enterprise under audit

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