The Professional Standards (GAAS, PSA, QCS), Fraud, NOCLAR

Requirements for training, independence and due professional care are included in which group of generally accepted auditing standards?

• Fieldwork

• General

• Reporting

• Quality control

Which of the following does not pertain to the standards of fieldwork?

• Adequate planning and supervision

• Obtaining sufficient competent evidential matter

• Proper study and evaluation of internal control as a basis for reliance thereon

• Technical training and proficiency

The generally accepted standards of reporting encompasses all of the following except

• Consideration of internal control

• Consistent application of accounting principles

• Informative disclosures

• Conformity of financial statements with GAAP

The Philippine Standards on Auditing (PSAs) issued by the Auditing and Assurance Standards Council:

• Are interpretations of the generally accepted auditing standards

• Are the criteria used in evaluating the fair presentation of the financial statements

• Are interpretations of the generally accepted accounting principles

• Are optional guidelines which an auditor may choose to follow or not follow when conducting an audit

Which of the following pronouncements issued by the AASC is designed to resolve issues relating to PSAs?

• Philippine Auditing Practices Statements

• Interpretations

• Statements of Auditing Standards in the Philippines

• Generally Accepted Auditing Standards

The objective of the quality control policies to be adopted by an audit firm will ordinarily incorporate all of the following except:

• Risk assessment

• Leadership responsibilities

• Engagement performance

• Human resources

Which of the following quality control objective would be least important to the auditor?

• Engagement performance

• Human resources

• Determination of audit fee

• Independence

Which of the following factors most likely would heighted an auditor’s concern about the risk of fraudulent financial reporting?

• Inability to generate cash flows from operations while reporting substantial earnings growth.

• Management’s lack of interest in increasing the entity’s stock trend.

• Large amounts of liquid assets that are easily convertible into cash.

• Inability to borrow necessary capital without granting debt covenants.

Which of the following is least likely to aid the auditor in evaluating the risk of improper review recognition due to fraud?

• Trend analysis of revenues and sales returns by month.

• Comparison of sales volume, as determined from recorded revenue amounts, with production capacity.

• Analysis of sales commissions over the most recent five-year period.

• Comparison of revenue reported by month and by product line for the current and prior years.

Which of the following procedures would least likely result in the discovery of possible noncompliance with laws and regulations?

• Reviewing an internal control questionnaire.

• Reading the minutes of the board of directors’ meetings.

• Performing tests of details of transactions.

• Making inquiries of management or legal counsel.