1. During 20X1, TWD changed its method of preparing its financial statements from the cash basis to generally accepted accounting principles. The audit risk would:

2. Which of the following types of evidence would an auditor most likely examine to determine whether internal control activities are operating as designed?

3. Part of an auditor's process of establishing whether the preconditions for an audit are present involves obtaining management's acknowledgement of its responsibility for all of the following except:

4. The auditor's overall responses to address the assessed risks of material misstatement at the financial statement level may include all of the following except:

5. Management makes assertions about the presentation and disclosure of inventory in the financial statements. Which of the following is not a substantive auditing procedure related to these assertions?

6. A CPA firm is completing the fieldwork for an audit of Swenson Co. for the current year ended December 31. The manager in charge of the audit is performing the final steps in the evidence accumulation phase of the audit and notes that there have been several changes in Swenson during the year under audit. Which of the following items would indicate there could be substantial doubt about Swenson's ability to continue as a going concern for a reasonable period of time?

7. Procedures for system documentation

8. Which of the following is a valid statement related to the relationship of internal control using information technology and financial reporting risk?

9. The GAO standards list several threats to independence. The threat of familiarity is defined as:

10. Completeness is one of the general assertions regarding a client's inventory balance. Which of the following is not a substantive auditing procedure related to this assertion?

11. Passwords and biometric devices

12. An auditor's report would be designated an audit of a special-purpose financial statement when it is issued in connection with:

13. Which of the following factors most likely would cause a CPA not to accept a new audit engagement?

14. Nile, CPA, on completing an audit, was asked by the client to provide technical assistance in integrating a new IT system. The set of pronouncements designed to guide Nile in this engagement is the Statement(s) on:

15. The regulatory body that has the primary authority to develop requirements for performing federal program compliance audits in accordance with the Single Audit Act is:

16. During 20X1, TWD sold half of its controlling interest in United Equipment Leasing (UEL) Co. TWD retained significant interest in UEL. The audit risk would:

17. The _______ requires that members accept the obligation to act in a way that will serve the clients, credit grantors, or employers; honor the clients, credit grantors, or employers; and demonstrate professionalism.

18. Which of the following is not an example of conditions and events that may indicate the existence of risks of material misstatement?

19. In reporting under Government Auditing Standards, an auditor most likely would be required to communicate management's misappropriation of assets directly to a federal inspector general when the fraudulent activities are:

20. Which of the following matters is covered in a typical comfort letter?

21. A CPA firm should establish procedures for conducting and supervising work at all organizational levels to provide reasonable assurance that the work performed meets the firm's standards of quality. To achieve this goal, the firm most likely would establish procedures for:

22. As part of the process of observing a client's physical inventories, an auditor should be alert to:

23. What is the most likely source of the following statement?
'There were unreasonable delays by management in permitting the commencement of the audit and in providing needed information.'

24. An audit client failed to maintain copies of its procedures manuals and organizational flowcharts. What should the auditor do in an audit of financial statements?

25. Which of the following is required of an accountant in reviewing a company's financial statements under the Statements on Standards for Accounting and Review Services (SSARS)?