Which of the following statements correctly defines the term "reasonable assurance"?
a. A substantial level of assurance to allow an auditor to detect a material misstatement.
b. A significant level of assurance to allow an auditor to detect a material misstatement.
c. An absolute level of assurance to allow an auditor to detect a material misstatement.
d. A high, but not absolute, level of assurance to allow an auditor to detect a material misstatement.
Answer _____
13. Which of the following factors most likely would cause a CPA to decline to accept a new audit engagement?
a. The CPA does not understand the entity’s operations and industry.
b. Management acknowledges that the entity has had recurring operating losses.
c. NO C
d. Management is unwilling to permit inquiry of its legal council.
Answer _____
14. Because of the risk of material misstatement, an audit of financial statements in accordance with generally accepted auditing standards should be planned and performed with an attitude of:
a. objective judgment.
b. independent integrity.
c. professional skepticism.
d. impartial conservatism.
Answer _____
15. Which of the following statements about materiality is false?
a. The concept of materiality recognizes that some matters are important for fair presentation of financial statements in conformity with the applicable financial reporting framework, while other matters are not important.
b. An auditor considers materiality for planning purposes in terms of the largest aggregate amount of misstatement that could be material to any one of the financial statements
c. Materiality judgments are made in light of surrounding circumstances and necessarily include both quantitative and qualitative judgments.
d. An auditor’s consideration of materiality is influenced by the auditor’s perception of the needs of the common financial information needs of users of a group T
Answer _____