21.

Which of the following are assertions about account balances at the balance sheet date (account balances at the period
end)?

22. Assertions about classes of transactions and events for the period under audit least likely include

23. Assertion about account balances at period end which means assets, liabilities and equity interests are included in the
financial statements at appropriate amounts is

24. Accuracy and valuation assertions about presentation and disclosure means

Financial Statements Assertions

a. Occurrence, cut-off, classification, completeness and accuracy
b. Existence, rights and obligations, completeness and valuation and allocation,
c. Occurrence and rights and obligations, completeness, classification and understandability and accuracy and valuation.
d. All of the above

a. Transactions and events that have been recorded have occurred and pertain to the entity.
b. All transactions and events that should have been recorded have been recorded.
c. Transactions and events have been recorded in the correct accounting period.
d. All assets, liabilities and equity interests that should have been recorded have been recorded.

a. Existence
b. Rights and obligations
c. Completeness
d. Valuation and allocation

a. Disclosed events, transactions, and other matters have occurred and pertain to entity.
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b. All disclosures that should have been included in the financial statements have been included.
c. Financial information is appropriately presented and described, and disclosures are clearly expressed.
d. Financial and other information are disclosed fairly and at appropriate amounts. 25. Which of the following statements
is an example of an assertion made by management in an entity's financial statements? 26. Which of the following
statements is false?

27. Which of the following statements is true concerning an external auditor’s responsibilities regarding financial
statements?

28. The existence of audit risk is recognized by the statement in the standard auditor’s report that the

29. Which of the following elements of the audit risk model is most likely to be the same across a range of audits
performed by a professional accounting firm?

30. Risk of material misstatement is

a. The financial statements were prepared in an unbiased manner.

b. All information requested by the auditor has been provided by management.
c. The scope of the auditors' investigation was not limited in any way by management.
d. Reported inventory balances reflect all related transactions for the period.

The Auditor’s Overall Objectives—Obtaining Reasonable Assurance, Reducing Audit Risk

a. In an audit of financial statements, being an assurance engagement, the auditor is engaged for purposes of expressing an
opinion designed to enhance the degree of confidence of intended users in the financial statements.
b. The overall objective of the independent auditor is to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to report on the financial
statements in accordance with the auditor’s findings.
c. The objective of an audit cannot be fulfilled unless the auditor achieves the overall objective of the auditor. In all cases
when the overall objective of the auditor cannot be achieved, the PSAs require that the auditor modifies the auditor’s
opinion accordingly or withdraws from the engagement.
d. In order to obtain reasonable assurance, the auditor shall obtain sufficient appropriate audit evidence to be able to draw
reasonable conclusions on which to base the audit opinion. Reasonable assurance is obtained when the auditor has thereby
reduced audit risk to an acceptably moderate level.

a. Making suggestions that are adopted about the form and content of an entity’s financial statements impairs an auditor’s
independence.
b. The fair presentation of audited financial statements in conformity with GAAP is an implicit part of the auditor’s
responsibilities.
c. An auditor’s responsibilities for audited financial statements are not confined to the expression of the auditor’s opinion.
d. An auditor may draft an entity’s financial statements based on information from management’s accounting system.

a. The auditor is responsible for expressing an opinion on the financial statements, which are the responsibility of
management.
b. Financial statements are presented fairly, in all material respects, in conformity with GAAP.
c. Audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
d. Auditor obtains reasonable assurance about whether the financial statements are free of material misstatement.

a. Audit risk
b. Detection risk
c. Control risk
d. Inherent risk

a. The risk that the auditor might express an opinion that the financial statements are materially misstated when they are
not.
b. The likelihood that the financial statements are materiality misstated prior to the audit.
c. Both a and b
d. Neither a nor b