1. Factors that place doubt on the going concern assumption include A. omissions in the financial statements, falling be

[answerhappygod]

1. Factors that place doubt on the going concern assumption
include
A. omissions in the financial statements, falling behind
competitors, and shortage of raw materials.
B. falling behind competitors, shortage of raw materials, and
significant debt-to-equity ratio.
C. errors in the financial statements, falling behind
competitors, and shortage of raw materials.
D. red flags in the financial statements, falling behind
competitors, and significant debt-to-equity ratio.
2. Internal controls, properly designed and implemented, may
A. eliminate the risk of misstatement as a result of related
party transactions.
B. reduce the risk of related party transactions.
C. detect overstatement of revenues and understatement of
expenses.
D. reduce the risk of misstatement as a result of related party
transactions.
3.Inadequate closing procedures result in
A. the auditor performing more detailed testing at year end.
B. financial statements not being produced.
C. financial statements not being reviewed by those charged with
governance.
D. transactions being recorded in the appropriate accounting
period.
4. Effective closing procedures identified during the risk
assessment phase
A. increase audit risk.
B. increase the planning materiality calculation.
C. indicate a strong control environment.
D. decrease the planning materiality calculation
5. The responsibility for making a going concern assessment is
that of those parties charged with
A. auditing the company.
B. internal controls at the company.
C. accounting at the company.
D. governance at the company
6. The responsibility for preventing and detecting fraud is that
of
A. those parties charged with accounting at the company.
B. those parties charged with governance at the company.
C. those parties charged with auditing the company.
D. those parties charged with internal controls at the
company.
7.An unmodified audit opinion reflects that the financial
statements are
A. fairly stated.
B. accurate.
C. materially misstated.
D. correct.
8. The auditor should gather evidence about closing procedures
to
A. evaluate effectiveness and make a judgement on the potential
of material misstatement of the financial statements.
B. discuss with those charged with governance.
C. make a judgement of reliance on closing procedures and issue
an audit report.
D. discuss with the audit team.
9. If the auditor is not familiar with the client’s IT system,
the auditor will
A. allocate more time to assessing the reliability of the
system.
B. report to the audit committee that there will be no reliance
on the IT system.
C. ignore the system and modify the audit opinion.
D. ignore the system and audit transactions and balances.
10. A high volume of sales transactions close to year end
A. indicates increased expenses.
B. indicates increased profitability.
C. indicates an opportunity for fraud to be committed.
D. indicates that fraud has been committed.
Note AUDITING