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Auditor Tests

TESTPORT IQ

1 / 21

What is the next correct letter in the following sequence: A, B, D, G, … ?

2 / 21

Please consider the following production results of 5 factories.

How many factories have production results higher than 300 in 2015?

3 / 21

How many of the five pairs below are exact duplicates?

4 / 21

Which one of the following things is the least like the others?

Painting

Flower

Statue

Poem

Novel

5 / 21

Which of the following series of numbers would not create an identical number when rotated 180 degrees?

6 / 21

What letter can replace the question mark to create a word?

7 / 21

Mary, who is sixteen years old, is four times as old as her brother. How old will Mary be when she is twice as old as her brother?

8 / 21

If you rearrange the letters “CIFAIPC” you would have the name of a(n):

Country

Ocean

City

River

Animal

9 / 21

Which number should come next in the series?
1 – 1 – 2 – 3 – 5 – 8 – 13

10 / 21

Which one of the five choices makes the best comparison?

PEACH is to HCAEP as 46251 is to:

25641

51462

15264

12654

26451

11 / 21

Which one of the figures below is incorrect?

12 / 21

Which image should be next in the sequence?

13 / 21

Adam needs 13 bottles of water from the store. Adam can only carry 3 at a time. What’s the minimum number of trips Adam needs to make to the store?

4 1/2

14 / 21

SUNDAY
MONDAY
TUESDAY
WEDNESDAY
THURSDAY
FRIDAY
SATURDAY
What day comes three days after the day which comes two
days after the day which comes immediately after the day
which comes two days after Monday?

WEDNESDAY

SATURDAY

SUNDAY

THURSDAY

TUESDAY

MONDAY

FRIDAY

15 / 21

What is an average of the following numbers: 2, 4, 5, 6, 8?

16 / 21

Solve for X:

128

154

186

180

17 / 21

Which larger shape would be made if the two sections are fitted together?

18 / 21

How many four-sided figures appear in the diagram below?

19 / 21

Which one of the five is least like the other four?

Elephant

Lion

Dog

Mouse

Snake

20 / 21

Choose the number that is 1/4 of 1/2 of 1/5 of 200:

21 / 21

Which factories have production results higher than 550 in 2016?

TESTPORT ENGLISH

1 / 29

I haven’t got ……

no brothers or sisters

brothers or sisters

any brothers or sisters

some brothers and sisters

2 / 29

….. Caviar in the fridge.

There isn’t no

There is any

There isn’t any

There aren’t no

3 / 29

George….. fly to Stockholm tomorrow.

to going

goes to

is going to

go to

4 / 29

David is the boss, you need to speak to …..

him

her

them

5 / 29

Select the correct Sentence

Give the Sarah book

Give the book to Sarah.

Give to Sarah the book.

Give the book at Sarah.

6 / 29

Every year,he goes to the coast for his holidays ….

in train

on train

by train

with train

7 / 29

There is ………. of beer left from the party

little

much

a lot

too

8 / 29

Michael………Paris in the morning

to leaving

leaves for

is leaving for

leave to

9 / 29

Select the correct Sentence

Pass the salt to Tom

Pass the Tom a salt.

Pass the salt at Tom

Pass to Tom the salt.

10 / 29

I’m going out …….some cigarettes

to buying

for buying

to buy

for to buy

11 / 29

He goes to work …..

by taxi.

on taxi.

with taxi.

in taxi.

12 / 29

We haven’t got ….. mineral water.

a lot

little

too

much

13 / 29

Select the correct Sentence

What’s like the weather?

How’s the weather?

What’s the weather like?

How the weather is?

14 / 29

He ….. breakfast yesterday

hadn’t

no had

didn’t have got

didn’t have

15 / 29

Select the correct Sentence

Mary usually drives carefully.

Mary carefully drives usually.

Mary carefully usually drives.

Mary usually carefully drives.

16 / 29

I’ve lost my keys. I can’t find them …..

anywhere

nowhere.

everywhere.

somewhere.

17 / 29

We’ll never get to the airport! There is ….. time!

few.

too little

too much little.

too few.

18 / 29

There ….. hooligans at the match, for a change.

were no

weren’t no

were any

were not

19 / 29

“….. have you been going out with him?” “Only a few months”

How long

How long time

What time

For how long

20 / 29

Don’t start ….. That’s for babies!

to crying!

crying!

cry!

in crying!

21 / 29

They weren’t happy about the new cat, and frankly, nor …. I.

weren’t

wasn’t

were

was

22 / 29

We’ve been living in the new house…just over a year ago.

and

for

since

23 / 29

That can’t be Albert! I………….

have just seen him

am just seen him

just see him

am just seen him.

24 / 29

You live upstairs from me,……….

do you?

are you?

don’t you?

didn’t you?

25 / 29

Micheal ….for the Bank since last year.

did work

has worked

does work

works

26 / 29

Tom ….. Elizabeth to go to the hospital

told

said

saying to

telling to

27 / 29

They weren’t invited to the party, and nor …. I.

weren’t

was

were

wasn’t

28 / 29

I haven’t had lunch with my mother ….. a year ago.

since

for

during

29 / 29

There ….. spectators at the match.

were no

weren’t no

were any

were not

TESTPORT ACCOUNTING

1 / 28

The two main methods of bookkeeping and accounting are 1) the cash method, and 2) the ____ method.

2 / 28

When using the statement of cash flows to evaluate a company’s continuing solvency, the most important factor to consider is the cash

balance at the end of the period.

flows from (used for) operating activities.

flows from (used for) investing activities.

flows from (used for) financing activities

3 / 28

The financial statement that provides a summary of the firm’s operations for a period of time is the

income statement

statement of financial position.

statement of retained earnings.

4 / 28

Bertram Company had a balance of $100,000 in Retained Earnings at the beginning of the year and

$125,000 at the end of the year. Net income for this time period was $40,000. Bertram’s Statement

of Financial Position indicated that Dividends Payable had decreased by $5,000 throughout the year,

despite the fact that both cash dividends and a stock dividend were declared. The amount of the

stock dividend was $8,000. When preparing its Statement of Cash Flows for the year, Bertram

should show Cash Paid for Dividends as

$20,000

$15,000

$12,000

$5,000

5 / 28

All of the following are elements of an income statement except

expenses.

shareholders’ equity.

gains and losses.

revenue.

6 / 28

A change in the estimate for bad debts should be

treated as an error.

handled retroactively.

considered as an extraordinary item.

treated as affecting only the period of the change.

7 / 28

Adam Retailing Company prices its products by adding 30% to its cost. Adam anticipates sales

of $715,000 in July, $728,000 in August, and $624,000 in September. Adam ’s policy is to have on

hand enough inventory at the end of the month to cover 25% of the next month’s sales. What will be

the cost of the inventory that Adam should budget for purchase in August?

$509,600.

$540,000.

$560,000.

$680,000.

8 / 28

A machine price was $1,000 and was carried through a truck. The truck’s fares were $500. The engineers charged $500 for the installation. The cost of the machine is?

$1,000

$1,500

$2,000

$2,500

9 / 28

When identifying fixed and variable costs, which one of the following is a typical assumption

concerning cost behavior?

A-General and administrative costs are assumed to be variable costs.

Cost behavior is assumed to be realistic for all levels of activity from zero to maximum capacity

Total costs are assumed to be linear when plotted on a graph.

The relevant time period is assumed to be five years.

10 / 28

An item of equipment cost $300,000 and has a residual value of $50,000 at the end of its expected useful life of four years. What is the depreciable amount?

$50,000

$250,000

$300,000

$350,000

11 / 28

Raw materials that are remaining at the end of the reporting period are treated as

liabilities

expenses

fixed assets

current assets

12 / 28

A store that sells expensive custom-made jewelry is most likely to determine its cost of goods

sold using

LIFO

FIFO

Specific Identification

Weighted Average

13 / 28

A bank overdraft is shown as a/an _____ balance in the bank statement.

debit

credit

credit – debit

none of these

14 / 28

A company had 130,000 shares of common stock outstanding on January 1 and sold 30,000

additional shares on March 30. Net income for the year was $495,625. What are earnings per

share?

$3.10

$4.58

$4.96

$3.25

15 / 28

Which from the following is included in the cost of purchases?

Abnormal loss

Freight in

Rent of store

Administrative Salaries

16 / 28

The collection of accounts receivable is recorded by a

Credit to Cash and a credit to Accounts Receivable

Debit to Cash and a debit to Accounts Receivable

Credit to Cash and a debit to Accounts Receivable

Debit to Cash and a credit to Accounts Receivable

17 / 28

Cheques issued but not presented, cause the bank statement balance to be ________ the cash book balance.

greater than

less than

equal to

the two statements are irrelevant

18 / 28

The capital of a business is $100,000 and the liabilities are $40,000. What are the total assets?

$40,000

$60,000

$100,000

$140,000

19 / 28

A purchasing agent wants to know the dollar amount of inventory purchased on account during

the year from a particular supplier. Where is the easiest place to find this information?

Inventory subsidiary ledger

Accounts payable controlling account

Inventory controlling account

Accounts payable subsidiary ledger

20 / 28

A debit entry usually represents

Assets and Expenses

Assets and Income

Liabilities and Income

Liabilities and Expenses

21 / 28

The assets that can be easily converted into cash within a short period, i.e., 1 year or less are known as

Current assets

Fixed assets

Intangible assets

Investments

22 / 28

Gross profit is

Cost of goods sold + Opening stock

Excess of sales over cost of goods sold

Sales fewer Purchases

Net profit fewer expenses of the period

23 / 28

Goods which originally cost $800 were sold for $1,000. In the accounting equation Net Assets will

rise by $1,000

rise by $200

fall by $1,000

fall by $200

24 / 28

A company sold goods worth $5,000 on 5 June and $10,000 on 28 June. The company received the first payment on 25 June and second on 7 July. The company prepared the financial statement on 30 June. What would be the total sale on the financial statement?

$5,000

$10,000

$15,000

25 / 28

What standards are used to prepare financial statements by most of the countries and companies

International Financial Reporting Standards

International Financial Accounting Standards

International Accounting & Auditing Standards

International Risk Reporting Standards

26 / 28

Advance payments are recognized as

receivable

payable

bad debt

none of these

27 / 28

What from the following is NOT a non-current asset?

Capital

Property

Patent rights

Inventory

28 / 28

The correct form of Accounting equation is

Assets + Liabilities = Equity

Assets – Liabilities = Equity

Assets – Receivable = Equity

Assets + Receivable = Equity

0%

TESTPORT AUDIT

1 / 35

The purpose of establishing quality control policies and procedures for deciding whether to accept or continue a client relationship is to

Enhance the auditor’s understanding of the client’s business and its industry.

Document the matters that are required to be communicated to the audit committee.

Provide reasonable assurance that personnel are adequately trained to fulfill their responsibilities.

Minimize the likelihood of associating with clients whose management lacks integrity.

2 / 35

Which of the following factors most likely would be considered an inherent limitation to an entity’s internal control?

Collusion of employees in circumventing internal controls.

The ineffectiveness of the entity’s audit committee.

The complexity of the entity’s electronic order processing system.

The lack of resources to monitor internal controls.

3 / 35

A compilation of financial statements in accordance with Statements on Standards for Accounting and Review Services is limited to presenting

Accounting data that conforms with a special purpose framework other than GAAP.

Supplementary financial information that has been subjected to inquiry and analytical procedures. Answer C

Information in the form of financial statements that is the representation of management.

Unaudited financial statements that omit substantially all required GAAP disclosures.

4 / 35

Before accepting an audit engagement, a CPA should evaluate whether conditions exist that raise questions as to the integrity of management. Which of the following conditions most likely would raise such questions?

There have been substantial inventory write-offs just before the year end in each of the past four years.

The CPA becomes aware of the existence of related party transactions while reading the draft financial statements.

The CPA will not be permitted to have access to sensitive information regarding the salaries of senior management.

There are significant differences between the entity’s forecasted financial statements and the financial statements to be audited.

5 / 35

Which of the following matters is included in a typical comfort letter?

Positive assurance on whether there has been any change in capital stock or long-term debt since the date of the audited financial statements.

An opinion on whether the entity’s internal control components are operating as designed in achieving their stated objectives.

Negative assurance on whether unaudited condensed financial information complies in form with the accounting requirements of the SEC.

An opinion on whether any fraud risk factors indicate significant incentive and opportunity relating to fraudulent financial reporting.

6 / 35

Which of the following factors most likely would heighten an auditor’s concern about the risk of material misstatement arising from the misappropriation of assets?

Management recently adopted new accounting principles.

The entity’s fixed assets lack ownership identification.

There is a potential for bias in the preparation of accounting estimates.

The entity recently experienced rapid growth in revenue.

7 / 35

Which of the following is an element of a CPA firm’s quality control policies and procedures applicable to the firm’s accounting and auditing practice?

Risk analysis.

Engagement performance.

Safeguarding of assets.

Information processing.

8 / 35

Which of the following sampling methods would an auditor use to estimate a numerical measurement of a population, such as the dollar value of inventory?

Discovery sampling.

Random-number sampling.

Variable sampling.

Attribute sampling.

9 / 35

In searching for unrecorded liabilities, an auditor most likely would examine the

Details of accounts receivable confirmations that are classified as "exceptions".

Receiving reports for items received before year end, but not yet recorded.

Files of purchase requisitions for items ordered just before the year end.

Cutoff bank statement for deposits recorded in the books, but not by the bank

10 / 35

Confirmation of accounts receivable that have been categorized initially by an auditor as “exceptions” most likely could be due to

Accounts receivable that have been classified as uncollectible.

Customers who have credit or zero balances with the client.

Responses that were mailed rather than faxed to the auditor.

Payments mailed to the client that have not been recorded.

11 / 35

An auditor is selecting prenumbered purchase orders for testing an entity’s internal control activities related to their proper approval before office equipment is ordered. The auditor is matching random numbers with the purchase order numbers to determine which purchase orders to inspect. If a random number matches a voided purchase order, the auditor ordinarily would replace the voided purchase order with another if the voided purchase order

Has been electronically deleted from the purchase order file.

Represents office equipment ordered and canceled before being processed by the vendor.

Has been properly voided in the normal course of business.

Represents office equipment ordered and never received.

12 / 35

Which of the following factors most likely would cause an accountant not to accept an engagement to compile the financial statements of a non-issuer?

A lack of segregation of duties in the entity’s accounting and payroll departments.

The entity’s intention to omit from the financial statements substantially all of the disclosures required by GAAP.

Indications that reports of asset misappropriation are not investigated by management.

Management’s acknowledgement that the financial statements will be included in a written personal financial plan.

13 / 35

During an engagement to compile the financial statements of a non-issuer, an accountant becomes aware that management had stated land at appraised value and that, if GAAP had been followed, both the land account and stockholders’ equity would have been decreased by $1 million, a material amount. The accountant decides to modify the standard compilation report because management will not revise the financial statements. Under these circumstances, the accountant should

Issue either an adverse opinion or a qualified opinion, depending on materiality, because of the departure from GAAP.

Add a separate paragraph to the accountant’s report that discloses the departure from GAAP and its effects on the financial statements.

Add a separate paragraph to the accountant’s report that explains the underlying purpose of recording assets at historical cost.

Add a separate paragraph to the accountant’s report that restricts the distribution of the financial statements to “internal use only.”

14 / 35

Which of the following is an element of a CPA firm’s quality control policies and procedures applicable to the firm’s auditing practice?

Professional skepticism of management.

Efficiency of organizational structures.

Acceptance of a client relationship.

Computer information processing.

15 / 35

. Which of the following procedures would an auditor generally perform regarding subsequent events?

Test internal control activities that were previously reported to management as inadequate.

Inspect inventory items that were ordered before the year end but arrived after the year end.

Review the client’s cutoff bank statements for several months after the year end.

Compare the latest available interim financial statements with the statements being audited

16 / 35

An audit client has a valid reason for requesting that a certain account receivable that the auditor has selected for confirmation not be confirmed. Under these circumstances, the auditor should

Explain to the client that the request will most likely cause the auditor to disclaim an opinion.

Verify the account balance by inspecting the client’s bank statements and cash receipt records.

Select at random a different account for confirmation that is approximately the same size.

Request the client’s management to document the matter in the management representation letter.

17 / 35

When assessing an internal auditor’s objectivity, an independent auditor should

Consider the policies that prohibit the internal auditor from auditing areas where relatives are employed in key management positions

Review the internal auditor’s reports to verify that the conclusions reached are consistent with the procedures performed.

Perform tests of controls to determine whether significant internal control activities are properly maintained.

Analyze the risk factors that relate to misstatements arising from the misappropriation of assets.

18 / 35

Which of the following procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events?

Trace information from shipping documents to sales invoices and sales journal transactions.

Inquire about the current status of transactions that were recorded on the basis of preliminary data.

Verify inventory pledged under loan agreements by confirming the details with financial institutions.

Compare the financial statements being reported on with those of the prior year.

19 / 35

An auditor decides to use the blank form of positive accounts receivable confirmation. The auditor should be aware that the blank form may be ineffective because

Accounts unconfirmed may have already been written off as uncollectible.

Accounts actually confirmed may not be representative of the population.

Few responses may occur because more effort is required of recipients.

All accounts do not have an equal opportunity to be selected for confirmation.

20 / 35

Which of the following activities is not an element of a CPA firm’s quality control system to be considered in establishing quality control policies and procedures?

Monitoring the effectiveness of professional development activities.

Selecting personnel for advancement who have the necessary qualifications.

Assessing a client’s ability to establish effective internal controls.

Deciding whether to accept or continue a client relationship.

21 / 35

An auditor of a nonissuer may not issue a qualified opinion when

Management prevents the auditor from observing the entity’s inventory.

The auditor’s report refers to the work of an actuary.

The entity omits the statement of cash flows from its financial statements.

The auditor lacks independence with respect to the entity.

22 / 35

Which of the following characteristics most likely would heighten an auditor’s concern about the risk of material misstatements arising from fraudulent financial reporting?

There is a lack of turnover of employees in the accounting department.

Management displays a significant disregard for regulatory authorities.

Monthly bank reconciliations usually include several deposits in transit.

Equipment is usually sold at a loss before being fully depreciated.

23 / 35

Which of the following procedures does a CPA usually perform when reviewing the financial statements of a nonissuer?

Evaluate management’s plans for dealing with negative trends and financial difficulties.

Communicate deficiencies in the design of internal control to the entity’s audit committee.

Examine trend analysis to determine the appropriateness of the CPA’s assessment of detection risk.

Make inquiries of management concerning restrictions on the availability of cash balances.

24 / 35

If the objective of an auditor’s test of details is to detect the overstatement of sales, the auditor should trace transactions from the

Customer’s purchase orders to the sales journal.

Cash receipts journal to the customer’s purchase orders.

Sales journal to the shipping documents.

Shipping documents to the cash receipts journal.

25 / 35

In performing substantive tests regarding the granting of stock options to senior management of an issuer, an auditor most likely would

Review the public records of the SEC to determine whether the options were properly reported.

Verify the existence of option holders in the issuer’s payroll and human resources records.

Trace the authorization for the options granted to the board of directors’ approval.

Confirm with those members of management as to whether they are actually option holders.

26 / 35

Which of the following statements is correct concerning both an engagement to compile and an engagement to review a nonissuer’s financial statements?

The accountant must be independent in fact and appearance.

The accountant should obtain a written management representation letter.

The accountant expresses no assurance on the financial statements.

The accountant need not obtain an understanding of internal control.

27 / 35

An accountant has been engaged to compile a non-issuer’s financial statements that contain several misapplications of accounting principles and unreasonable accounting estimates. Management is unwilling to revise the financial statements, and the accountant believes that modification of the standard compilation report is not adequate to communicate the deficiencies. Under these circumstances, the accountant should

Withdraw from the compilation engagement and provide no further services concerning these financial statements

Inform management that the engagement can proceed only if distribution of the accountant’s compilation report is restricted to internal use.

Determine the effects of the deficiencies and add a separate paragraph to the compilation report that describes the deficiencies and their effects.

Disclaim an opinion on the financial statements and advice the board of directors that the financial statements should not be relied upon.

28 / 35

Which of the following procedures would an accountant least likely perform during an engagement to review the financial statements of a nonissuer?

Make inquiries of management about actions taken at board of directors’ meetings.

Study the relationships of financial statement elements expected to conform to predictable patterns.

Identify internal control activities that are likely to prevent or detect material misstatements.

Compare the financial statements with anticipated results in budgets and forecasts.

29 / 35

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

The CPA’s lack of understanding of the entity’s operations and industry.

Management’s unwillingness to make all financial records available to the CPA.

The CPA’s inability to review the predecessor auditor’s working papers.

Management reputation for failing to provide schedules to prior auditors on a timely basis.

30 / 35

In selecting an appropriate sample for a substantive test, the auditor most likely would stratify the population if the

Auditor suspects that management fraud has occurred during the year.

Desired assessed level of control risk is less than the prior year.

Technique to be used is attribute sampling.

Auditor plans to give greater representation to large recorded amounts

31 / 35

A CPA was engaged to calculate the rate of return on a specified investment according to an agreed upon formula and verify that the resultant percentage agrees to the percentage in an identified schedule. The CPA’s report on these agreed-upon procedures should contain

An opinion about the fairness of the agreed-upon procedures.

A disclaimer of responsibility for the sufficiency of those procedures.

A disclaimer of responsibility for the sufficiency of those procedures.

A separate paragraph describing the effectiveness of the internal controls.

32 / 35

Which of the following procedures would a CPA most likely include in planning a financial statement audit?

Scan the client’s journals and ledgers to identify any unusual transactions.

Obtain a written representation letter from the client’s management.

Determine the extent of involvement of the client’s internal auditors.

Ask the client’s lawyer if contingencies have been recorded in conformity with GAAP.

33 / 35

Which of the following circumstances most likely would cause an auditor to suspect that there are material misstatements in an entity’s financial statements?

Management enforces strict budgetary controls over the entity’s departmental supervisors.

Cash transactions are electronically processed and recorded, leaving no paper audit trail.

The monthly bank reconciliation ordinarily includes several large outstanding checks.

There are unusual discrepancies between the entity’s records and confirmation replies.

34 / 35

According to rules issued under the Sarbanes-Oxley Act, which of the following non-audit services is an accounting firm permitted to provide for an issuer audit client without impairing the accounting firm’s independence?

Providing factual accounts in testimony explaining positions taken during the performance of any services provided to the client.

Providing an expert opinion in order to advocate the client’s position in a regulatory investigation.

Providing an expert opinion in order to advocate the client’s interest in litigation.

Providing legal services to the client in a foreign jurisdiction.

35 / 35

Which of the following statements would most likely appear in an auditor’s engagement letter?

Management agrees to correct all deficiencies in internal control activities identified by us.

Management is responsible for making all financial records and related information available to us.

Management is responsible for reporting to us any inadequate provisions for the safeguarding of assets.

We will identify internal controls relevant to specific assertions that may prevent or detect material misstatements.

At Expert Zone, we have multi-disciplinary skills to address a range of services that our clients require.

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