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Auditing Theory Test Bank

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Auditing Theory Test Bank

Select the best answer for each of the

8. An auditor's working papers will generally be
following questions.
least likely to include documentation showing how
the
1. Broadly defined, the subject matter of any audit
a) Client's schedules were prepared
consists of
b) Engagement had been planned
a) Financial statements
c) Client's system of internal control had
b) Economic data
been reviewed and evaluated
c) Assertions
d) Unusual matters were resolved
d) Operating data
9. Which of the following sampling methods would
be most appropriate in performing tests of controls
2. The third standard of field work states that over authorization of cash disbursements
sufficient competent evidential matter may in part be a) Attributes
obtained through the following methods except b) Variables
a) Inspection c) Ratio
b) Observation d) Stratified
c) Confirmation
d) Reconciliation 10. Analytical procedures used in the overall
review stage of an audit generally include
a) Considering unusual or unexpected account
3. If an auditor believes that material error or fraud balances that were not previously identified b)
exist, the auditor should Performing test of transactions to corroborate
a) Consider the implications and discuss the management's financial statement assertions
matter with appropriate levels of management c) Gathering evidence concerning account balances
b) Make the investigation necessary to determine that have not changed from the prior year
whether errors or fraud have in fact occurred d) Re-testing control procedures that appeared to be
c) Request that management investigate whether ineffective during the assessment of control risk
errors or fraud have in fact occurred
d) Consider whether errors or fraud where the result 11. Results of the financial statement audit are
of employee's failure to comply with specific communicated to users through
controls a) Financial statement
b) Written management assertion
c) Audit report
4. Which of the following is not normally performed d) None of the above
in the pre-planning or pre-engagement phase?
a) Deciding whether to accept or reject an audit 12. What is the primary difference between
engagement financial reporting risk and audit risk?
b) Inquiring from predecessor auditor a) The application of accounting principles
c) Preparing an engagement letter b) Responsibilities of the respective parties
d) Making a preliminary estimate of materiality involved
c) Demands of users of financial statements
d) Risks of being sued by third parties
5. On the basis of the audit evidence gathered and
evaluated, an auditor decides to increase the 13. Relationship between control risk and detection
assessed level of control risk from that originally risk is ordinarily
planned. To achieve an overall audit risk level that is a) Parallel
substantially the same as the planned audit risk b) Inverse
level, the auditor would c) Direct
d) Equal
a) Decrease substantive testing
b) Increase inherent risk 14. A representation letter issued by a client
c) Decrease detection risk a) Is essential for the preparation of the audit
d) Increase materiality levels program
b) Is a substitute for testing
6. An effective internal control c) Does not reduce the auditor's responsibility d)
a) Cannot be circumvented by management Reduces the auditor's responsibility only to the
b) Can reduce the cost of an external audit extent that it is relied upon
c) Can prevent collusion among employees
d) Eliminates risks and potential loss to the 15. The recruitment of senior management for an
organization assurance client, such as those in a position to
affect the subject of the assurance engagement
7. In auditing through a computer, the test data may least likely create
method is used by auditors to test the a) Self-interest threat
a) Accuracy of input data b) Advocacy threat
b) Validity of the output c) Intimidation threat
c) Procedures contained within the program d) Familiarity threat
d) Normalcy of distribution of test data

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transactions with suppliers

c) Labor difficulties or shortages of
important supplies
16. In reviewing the audit work performed,
d) Compliance with capital or other statutory
the engagement partner
requirements
a) Must review all audit documentation
b) Need not review all audit documentation, but
23. Which of the following procedures is not
may do so
included in a review engagement on a nonpublic
c) Need not review all audit documentation
entity
d) Must ask the staf f performing the audit work
a) Inquiries of management
to sign the audit report
b) Inquiries regarding events subsequent to
the balance sheet date
17. The independent auditor lends credibility to
c) Any procedures designed to identify
client’s financial statements by
relationships among data that appear to be unusual
a) Maintaining a clear-cut distinction between
d) A study and evaluation of internal control
management’s representations and the auditor’s
structure
representation
b) Testifying under oath about client’s
24. In planning the audit engagement, the auditor
financial statements
should consider each of the following except
c) Stating in the auditor’s management letter that
a) The kind of opinion that will likely be given b)
the examination was made in accordance with
Matters relating to the entity’s business and the
generally accepted auditing standards
industry in which it operates
d) Attaching an auditor’s opinion to the client’s
c) The entity’s accounting policies and procedures
financial statements
d) Anticipated levels of control risk and materiality
18. The most difficult type of misstatement to detect
is fraud based on 25. What assurance is provided by the practitioner in
a) The over-recording of transactions an agreed-upon procedures engagement?
b) The non-recording of transactions c) a) Reasonable
Recorded transactions in subsidiaries d) b) Absolute
Related party receivables c) Moderate
d) No assurance
19. Assuming a recurring audit, in which of the
following situations would the auditor be unlikely
26. To test for unsupported entries in the journal, the
to send a new engagement letter to the client?
direction of audit testing should be from the
a) A recent change in partner and/or staff
a) Journal entries
involved in the audit engagement
b) Ledger entries
b) A change in the terms of engagement
c) Original source documents
c) A recent change of client management
d) Externally generated documents
d) A significant change in the nature or size of the
client's business
27. For good internal control, the purchasing
department should not be responsible for a)
20. When an auditor expresses an adverse opinion
Authorizing the acquisition of goods b)
he/sheshould disclose the substantive reasons for
Finding the lowest cost vendor
such anopinion in an explanatory paragraph
c) Reviewing the vendors catalog descriptions and
a) Within the notes to the financial statements
prices for standardized items
b) Preceding the opinion paragraph
d) Designing the purchase order form
c) Following the opinion paragraph
d) Preceding the introductory paragraph
28. Involves tracing a few transactions through the
accounting system
21. Tolerable error means
a) Test of controls
a) An error that arises from an isolated event that
b) Walk-through test c)
has not recurred other than on specifically
Analytical procedures d)
identifiable occasions and is therefore not
Substantive procedures
representative of errors in the population
b) An error that the auditor expects to be present in
29. This exists, when other information, not related
the population
to matters appearing in the financial statements, is
c) The maximum error in a population that the
incorrectly stated or presented
auditor is willing to accept
a) Material inconsistency
d) The possibility that the auditor's conclusion, based
b) Material misstatement
on a sample may be different from the conclusion
c) Material misstatement of fact
reached if the entire population were subjected to the
d) Material error affecting the other information
same audit procedure
30. Who appoints the members of the Board of
22. Examples of events or conditions, which
Accountancy
individually or collectively, may cast significant
a) The chairman of BOA
doubt about the going concern assumption include
b) The president of the Philippines
the following except
c) The chairman of the PRC
a) Net liability or net current liability position
d) The president of PICPA
b) Change from credit to cash-on-delivery
and reasons for business fluctuations. What is the
audit purpose most directly served by obtaining this
understanding?
a) To enable the auditor to accurately identify
significant deficiencies in internal control
31. An auditor is required to obtain an understanding
b) To assist the auditor in accurately interpreting
of the entity's business, including business cycles
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information obtained during an audit

referred to as
c) To allow the auditor to more accurately perform
a) Special purpose financial statements
tests of controls
b) Special purpose framework
d) To decide whether it will be necessary to perform
c) General purpose financial statements
analytical procedures
d) Specific purpose financial statements
32. Which of the following is not true about
the report release date?
a) It is defined as the date after which existing
documentation must not be deleted, and additions
to the documentation file must be documented as 38. An auditor plans to apply substantive tests to
such the details of asset and liability accounts as of an
b) It is often the date on which the report is delivered interim date rather than as of the balance sheet
to the client date. The auditor should be aware that this practice
c) It is the date on which the auditor grants the client a) Eliminates the use of certain statistical
permission to use the report sampling methods that would otherwise be
d) It is used to define the beginning of the retention available
period b) Presumes that the auditor will reperform the tests
of the balance sheet date
c) Should be especially considered when there are
33. An auditor should not issue a report on
rapidly changing economic conditions
a) Quarterly financial information
d) Potentially increases the risk that errors that
b) Internal control
exist at the balance sheet date will not be detected
c) Management performance
d) The achievability of forecasts
39. Close family include the following,
except a) Parent
34. Which of the following procedures would an
b) Sibling
auditor most likely perform to obtain evidence about
c) Non-dependent child
the occurrence of subsequent events?
d) Spouse
a) Confirming a sample of material
accounts receivable established after year-
40. A computer-assisted audit technique that is most
end
likely to be effective in a continuous auditing
b) Comparing the financial statements being
environment is
reported on with those of the prior period
a) Parallel simulation
c) Investigating personnel changes in the
b) Controlled reprocessing
accounting department occurring after year-end
c) Embedded audit modules
d) Inquiring as to whether any unusual
d) Transaction tripping
adjustments were made after year-end

35. To which of the following matters would 41. Which of the following is not prohibited by
materiality limits not apply when obtaining the Code of Professional Ethics for CPAs?
written client representations? a) Advertising and solicitation of clients
a) Violations of state labor regulations b) Payment of commissions to obtain a client c)
b) Disclosure of line-of-credit arrangements Receiving a contingent fee on a tax case
c) Information about related party transactions before the Bureau of Internal Revenue
d) Instances of fraud involving management d) Offering employment to a staf f member of another
CPA without first informing the CPA
36. Who ultimately determines the scope of the
42. The management's assessment of the entity's
audit?
ability to continue as a going concern covers a
a) The auditor
period of
b) The client c)
a) Not longer than 12 months from balance sheet
Both a and b
date
d) Neither a nor b
b) At least 12 months from the balance sheet
date
37. Financial statements prepared in accordance with
c) Not longer than 12 months from the date of audit
a financial reporting framework designed to meet the
report
financial information needs of specific users are
d) At least 12 months from the date of audit report

43. To obtain evidential matter about control risk, an

auditor selects tests from a variety of techniques
including
a) Inquiry
b) Analytical
procedures c)
Calculation
d) Confirmation

44. The need for independent audits of financial

statements can be attributed to all of the following
conditions except

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a) Remoteness
b) Performing predictable further audit procedures
b) Consequence
c) Performing substantive procedures at an interim
c) Complexity of subject matter
date instead of at period end
d) Validity
d) Emphasizing to the audit team the need to
maintain professional skepticism in gathering and
45. After issuing a report an auditor includes that
evaluating audit evidence
an auditing procedure considered necessary at the
time of the examination was omitted from the
51. The need for assurance services arises for all of
examination. The auditor should first
the following reason except
a) Undertake to apply the omitted procedure or
a) Potential bias in providing information
alternative procedures that would provide a
b) Closeness between a user and the
satisfactory basis for the auditor's opinion
organization
b) Assess the importance of the omitted
c) Complexity of the processing systems
procedure to the auditor's ability to support
d) Remoteness between a user and the organization
the opinion expressed on the financial
statements taken as a whole
c) Notify the audit committee or the board of 52. Which one of the following is not a key
directors that the auditor's opinion can no longer be attribute needed to perform assurance?
relied upon a) Subject matter knowledge
d) Review the results of other procedures that were b) Independence
applied to compensate for the one omitted or to make c) Established criteria or standards
its omission less important d) Accounting skills

46. This quality control element requires a CPA firm 53. Which one of the following is not part of
to establish policies and procedures to provide it with the attest process?
reasonable assurance that engagements are a) Providing the accuracy of the books and
performed in accordance with professional standards records
and regulatory and legal requirements, and that the b) Gathering evidence about assertions
firm or the engagement partner issue reports that are c) Evaluating evidence against objective criteria
appropriate in the circumstances d) Communicating the conclusions reached
a) Ethical requirements
b) Engagement performance 54. Users of the audit report can reasonably expect
c) Monitoring the audited financial statements to be
d) Human resources a) Complete and contain many of the important
financial disclosures
47. Communication with a predecessor auditor is b) Presented fairly according to the substance of
initiated by GAAP
a) Management c) Free from all
b) The successor auditor errors d) All of the
c) The audit committee of the board of directors above
d) The chair of the board of directors
55. Which of the following services is the
48. In which of the following may broadest and most inclusive
confidential information not be disclosed? a) Audit
a) To comply with the quality review of a b) Attestation
member body or professional body c) Assurance
b) To submit evidence in the course of legal d) Compliance
proceedings
c) Acquiring information in the course 56. One reason why an auditor makes an analytical
performing professional services and use that review of the client’s operations is to identify
information for personal advantages a) Improper separation of accounting and other
d) When consent to disclose information is given financial duties
by the client b) Weakness of a material nature in the system
of internal accounting control
49. The auditor should perform the following risk c) Unusual transactions
assessment procedures to obtain an understanding d) Non-compliance with prescribed control
of the entity and its environment, including its procedures
internal control, except
a) Inquiries of management and others within the 57. Analytical procedures used in planning an audit
entity should focus on identifying
b) Reperformance a) Material weaknesses in the internal control
c) Analytical procedures structure
d) Observation and inspection b) The predictability of financial data from
individual transactions
50. The auditor should determine overall responses c) The various assertions that are embodied in the
to address the risks of material misstatement at the financial statements
financial statement level. Such responses most likely d) Areas that may represent specific risk
include relevant to audit
a) Assigning less experienced staff
58. An integrated test facility (ITF) would
be appropriate when the auditor needs to
a) Trace a complex logic path through an continuously
application system d) Verify load module integrity for
b) Verify processing accuracy concurrently with production programs
processing
c) Monitor transactions in an application system 59. The rotation of senior accounting personnel
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can be regarded as a safeguard

c) Financial statement assertions
a) Created by the profession
d) Control environment factors
b) Within the client’s systems and procedures
c) In the work environment
66. Which of the following is not a step in
d) Created within the business community
an auditor's assessment of control risk?
a) Evaluate the effectiveness of internal control
60. If certain forms are not consecutively numbered
with tests of controls
a) Systematic sampling may be appropriate b)
b) Obtain an understanding of the entity's
Selection of a random sample probably is not
information system and control environment
possible
c) Perform tests of details of transactions to
c) Stratified sampling should be used
detect material misstatements in the financial
d) Random number tables cannot be used
statements
d) Consider whether controls can have a pervasive
effect on financial statement assertions

61. A cash shortage may be concealed by 67. Which of the following procedures would
transporting funds from one location to another or by an auditor ordinarily perform first in
converting negotiable assets to cash. Because of this, evaluating management's accounting
which of the following is vital? estimates for reasonableness?
a) Simultaneous confirmations a) Develop independent expectations of
b) Simultaneous bank reconciliations management's estimates
c) Simultaneous verification b) Consider the appropriateness of the key factors or
d) Simultaneous surprise cash count assumptions used in preparing the estimates
c) Test the calculations used by management
62. Which of the following is most likely to indicate in developing the estimates
a significant deficiency relating to a client's anti- d) Obtain an understanding of how
fraud programs? management developed its estimates
a) A broad scope of internal audit activities 68. An entity's income statements were misstated
b) A "whistle-blower" program that encourages due to the recording of journal entries that involved
anonymous submissions debits and credits to an unusual combination of
c) Audit committee passivity when conducting expense and revenue accounts. The auditor most
oversight functions likely could have detected this fraudulent financial
d) Lack of performance of criminal reporting by
background investigations for likely customers a) Tracing a sample of journal entries to the general
ledger
63. Which of the following is not an b) Evaluating the effectiveness of internal control
attestation standard? c) Investigating the reconciliations between
a) Sufficient evidence shall be obtained to provide a controlling accounts and subsidiary records
reasonable basis for the conclusion that is expressed d) Performing analytical procedures designed to
in the report disclose differences from expectations
b) The report shall identify the subject matter on the
assertion being reported on and state the character of 69. Which of the following is most likely to be
the engagement unique to the audit work of CPAs as compared to
c) The work shall be adequately planned and work performed by practitioners of other
assistants, if any, shall be properly supervised professions?
d) A sufficient understanding of internal a) Due professional care
control shall be obtained to plan the b) Competence
engagement c) Independence
d) Complex body of knowledge
64. Proper segregation of functional
responsibilities calls for separation of the functions 70. Which of the following would an auditor
of most likely use in determining the auditor's
a) Authorization, execution, and payment preliminary judgment about materiality?
b) Authorization, recording, and custody a) The anticipated sample size of the
c) Custody, execution, and reporting planned substantive tests
d) Authorization, payment, and recording b) The entity's annualized interim financial
statements
65. Control risk should be assessed in terms of c) The results of the internal control questionnaire
a) Specific controls d) The contents of the management representation
b) Types of potential fraud letter

71. Which of the following conditions identified

during fieldwork of an audit is most likely to affect
the auditor's assessment of the risk of misstatement
due to fraud?
a) Checks for significant amounts outstanding at
year-end
b) Computer generated documents
c) Missing documents
d) Year-end adjusting journal entries.

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78. Which of the following is ordinarily considered

72. An auditor ordinarily uses a working trial to be a fraud risk factor?
balance resembling the financial statements without a) The company's financial statements include a
footnotes, but containing columns for number of last minute material adjustments. b)
a) Cash flow increases and decreases Management regularly informs investors of forecast
b) Audit objectives and assertions information.
c) Reclassifications and adjustments c) The company has experienced increasing
d) Reconciliations and tick marks earnings over the previous five years.
d) The company's president is included as a
73. The risk that an auditor will conclude, based on member of the board of directors.
substantive tests, that a material misstatement does
not exist in an account balance when in fact such 79. Which is least likely to be a question asked of
misstatement does exist is referred to as client personnel during a walk-through in an audit
a) Detection risk of the internal control of an issuer (public)
b) Sampling risk company? a) What do you do when you find an
c) Non-sampling error'?
risk d) Inherent risk b) Who is most likely to commit fraud among
your coworkers?
74. The usefulness of the standard bank confirmation c) What kind of errors have you found?
request may be limited because the bank employee d) Have you ever been asked to override the process
who completes the form may or controls?
a) Be unaware of all the financial relationships
that the bank has with the client 80. An auditor who uses the work of a specialist
b) Not believe that the bank is obligated to verify may refer to and identify the specialist ill the
confidential information to a third party auditor's report if the
c) Sign and return the form without inspecting the a) Specialist is also considered to be a related party.
accuracy of the client's bank reconciliation b) Auditor indicates a division of responsibility
d) Not have access to the client's cutof f bank related to the work of the specialist.
statement c) Specialist's work provides the auditor greater
assurance of reliability.
d) Auditor expresses an "except for" qualified
75. A material weakness is a significant deficiency opinion or an adverse opinion related to the
(or combination of significant deficiencies) that work of the specialist.
results in a reasonable possibility that a misstatement
of at least 'what amount will not be prevented or
detected?
81. Which of the following statements
a) An amount greater than zero
concerning evidential matter is correct?
b) An amount greater than zero, but at least
a) Appropriate evidence supporting management's
inconsequential
assertions should be convincing rather than merely
c) An amount greater than inconsequential
persuasive.
d) A material amount
b) Effective internal control contributes little to the
reliability of the evidence created within the entity. c)
The cost of obtaining evidence is not an important
76. The existence of audit risk is recognized by the consideration to an auditor in deciding what evidence
statement in the auditor's standard report that the should be obtained.
auditor d) A client's accounting data cannot be
a) Obtains reasonable assurance about considered sufficient audit evidence to support
whether the financial statements are free of the financial statements.
material misstatement.
b) Assesses the accounting principles used and 82. Confirmations of accounts receivable address
also evaluates the overall financial statement which assertion most directly?
presentation. a) Completeness
c) Realizes some matters either individually or in the b) Existence c)
aggregate, are important while other matters are not Valuation
important. d) Classification
d) Is responsible for expressing an opinion on the
financial statements, which arc the responsibility of 83. When performing a review of an issuer company,
management. which is least likely to be included in the CPA's
inquires of management members with responsibility
77. Which of the following services would be for financial and accounting matters?
most likely to be structured as an attest a) Subsequent events
engagement? a) Advocating a client's position in b) Significant journal entries and other adjustments
tax matter. c) Communications with related parties d)
b) A consulting engagement to develop a new Unusual or complex situations affecting the
database system for the revenue cycle. financial statements
c) An engagement to issue a report addressing an
entity's compliance with requirements of specified 84. The adverse effects of events causing an auditor
laws. to believe there is substantial doubt about an entity's
d) The compilation of a client's forecast information. ability to continue as a going concern would most
likely be mitigated by evidence relating to the
a) Ability to expand operations into new product plans to sell.
lines in the future. d) Committed arrangements to convert preferred
b) Feasibility of plans to purchase leased stock to long-term debt.
equipment at Jess than market value.
c) Marketability of assets that management 85. One reason that an auditor only obtains
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reasonable, and not absolute, assurance that

b) Test of controls
financial statements are free from material
c) Substantive test
misstatement is
d) Test of a
a) Comprehensive basis reporting
function
b) Employee collusion
c) Material misstatements
d) Professional 91. Accounting control procedures within computer
skepticism processing may leave no visible evidence indicating
86. When an auditor concludes there is substantial that the procedures were performed. In such
doubt about a continuing audit client's ability to instances, the auditor should test these controls by
continue as a going concern for a reasonable period a) Making corroborative inquiries.
of time, the auditor's responsibility is to b) Observing the separation of duties of personnel.
a) Issue a qualified or adverse opinion, c) Reviewing transactions submitted for
depending upon materiality, due to the possible processing and comparing them to related
effects on the financial statements. output.
b) Consider the adequacy of disclosure about d) Reviewing the run manual.
the client's possible inability to continue as a
going concern. 92. If information is for management's use only,
c) Report to the client's audit committee that which of the following forms of CPA association
management's accounting estimates may need to with financial information is most likely to result in
be adjusted. no report being issued?
d) Reissue the prior year's auditors report and add an a) An agreed-upon procedures engagement
explanatory paragraph that specifically refers to b) An audit
"substantial doubt" and "going concern." c) A compilation
d) A review
87. The accountant who is not independent may
93. In obtaining an understanding of a
perform which of the following types of
manufacturing entity's internal control over
engagements?
inventory balances, an auditor most likely would
a) Audit
a) Review the entity's descriptions of inventory
b) Agreed-upon procedures
policies and procedures.
c) Compilation
b) Perform test counts of inventory during the
d) Review
entity's physical count.
c) Analyze inventory turnover statistics-to
88. Which of the following should an auditor
identify slow-moving and obsolete items.
obtain from the predecessor auditor prior to
d) Analyze monthly production reports to
accepting an audit engagement?
identify variances and unusual transactions.
a) Analysis of balance sheet accounts
b) Analysis of income statement accounts
c) All matters of continuing accounting significance
d) Facts that might bear on the integrity of 94. When auditing merchandise inventory at year-
management end, the auditor performs a purchase cutof f test to
obtain evidence that
89. Which is least likely to be a response when a) All goods owned at year-end are included in the
an auditor has obtained evidence indicating a inventory balance.
risk of material misstatement in the area of b) All goods purchased before year-end are received
inventory? before the physical inventory count.
a) Request inventory counts at the end of each c) No goods held on consignment for customers are
month. included in the inventory balance.
b) Discuss questions of inventory valuation with d) No goods observed during the physical count are
any other auditors involved with the audit. pledged or sold.
c) Make oral inquiries of major suppliers in
addition to written confirmations. 95. A company has changed its method of inventory
d) Perform inventory observations on an valuation from an unacceptable one toone in
unannounced basis. conformity with generally accepted accounting
principles. The auditor's report on the financial
90. The independent auditor selects several statements of the year of the change should include
transactions in each functional area and traces them a) No reference to consistency.
through the entire system, paying special attention to b) A reference to a prior period adjustment in the
evidence about whether or not the controls are in opinion paragraph.
operation. This is an example of a(n) c) An explanatory paragraph explaining the
a) Application test change.
d) A justification for making the change and
the impact of the change on reported net
income.

96. An abnormal fluctuation in gross profit that

might suggest the need for extended audit procedures
for sales and inventories would most likely be
identified in the planning phase of the audit by the
use of
a) Tests of transactions and balances
b) A preliminary review of internal control

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c) Specialized audit programs
d) Analytical procedures

97. Which of the following statements best describes

the ethical standard of the profession pertaining to
advertising and solicitation?
a) All forms of advertising and solicitation
are prohibited.
b) There are no prohibitions regarding the manner in
which CPAs may solicit new business.
c) A CPA may advertise in any manner that is
not false, misleading, or deceptive.
d) A CPA may only solicit new clients through
mass mailings.

98. A note to the financial statements of a bank

indicates that all of the records relating to its
business operations are stored on magnetic disks; and
that there are no emergency back-up systems or
duplicate disks stored since the bank and their
auditors consider the occurrence of a catastrophe to
be remote. Based upon this, one would expect the
auditor's report to express
a) An adverse opinion
b) An "except for" opinion
c) An unqualified opinion
d) A qualified opinion

99. Which of the following is not typically

performed when accountants are performing a
review of the financial statements of a nonissuer?
a) Analytical procedures applied to financial data
b) Inquiries about significant subsequent events
c) Inquiries of the client's attorney about legal
matters
d) Obtaining an understanding of the accounting
principles followed by the client's industry

100. Which of the following is least likely to be

a restricted use report?
a) A report on financial statements prepared
following a comprehensive basis of accounting
other than generally accepted accounting
principles.
b) A report on internal control significant
deficiencies noted in an audit.
c) A required communication with the
audit committee.
d) A report on compliance with aspects of contractual
agreements.