101. Which of the following is always present in an attestation engagement?
a) Subject matter
b) Assertion about the subject matter
c) Generally accepted assurance principles
d) An examination report
102. Which of the following is least likely to be a test of a control?
a) Inquiries of appropriate personnel.
b) Inspection of management's engagement letter.
c) Observation of the application of a policy.
d) Reperformance of the application of a policy.
103. When one auditor succeeds another, the successor auditor should request the
a) Client to instruct its attorney to send a letter of audit inquiry concerning the status of the prior year's litigation, claims, and assessments.
b) Predecessor auditor to submit a list of internal control weaknesses that have not been corrected.
c) Client to authorize the predecessor auditor to respond to inquiries.
d) Predecessor auditor to update the prior year's report to the date of the change of auditors.
104. A difference of opinion concerning accounting and auditing matters relative to a particular phase of the audit arises between an assistant auditor and the auditor responsible for the engagement. After appropriate consultation, the assistant auditor asks to be disassociated from the resolution of the matter. The working papers would probably be
a) Silent on the matter since it is an internal matter of the auditing firm
b) Expanded to note that the assistant auditor is completely disassociated from responsibility for the auditor's opinion
c) Expanded to document the additional work required, since all disagreements of this type will require expanded substantive testing
d) Expanded to document the assistant auditor's position, and how the difference of opinion was resolved
105. On the audit of a nonissuer (nonpublic) company, the purpose of performing risk assessment procedures is to
a) Obtain an understanding of the entity and its environment
b) Reduce detection risk
c) Evaluate management ability
d) Determine the operating effectiveness of controls