This document provides a list of 25 multiple choice questions from an ACC 403 midterm exam for Strayer University's spring 2016 semester. The questions cover topics like an auditor's responsibilities and defenses in lawsuits, types of illegal acts, sources of audit evidence, audit procedures, and related party transactions. The document also includes advertisements for purchasing exam solutions and past exams from an online test preparation website.

1. ACC 403 MIDTERM PART 2
- NEW SPRING 2016
STRAYER
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2. ACC 403 MIDTERM PART 2 - NEW SPRING 2016 STRAYER
1. Which of the following auditor's defenses usually means nonreliance on the
financial statements by the user?
2. The expectation gap:
3. The standard of due care to which the auditor is expected to adhere to in the
performance of the audit is referred to as the:
4. The assessment against a defendant of that portion of the damage caused by the
defendant's negligence is called:
5. The preferred defense in third party suits is:
6. In connection with the audit of financial statements, an independent auditor could
be responsible for failure to detect a material fraud if:
7. Which of the following would most likely be deemed a direct-effect illegal act?
8. Fraudulent financial reporting is most likely to be committed by whom?
9. Which of the following is the auditor least likely to do when aware of an illegal
act?
10. The most important general ledger account included in and affecting several
cycles is the:
11. "The auditor should not assume that management is dishonest, but the possibility
of dishonesty must be considered." This is an example of:
12. Which of the following statements is the most correct regarding errors and fraud?
13. Audit documents:
14. When the auditor uses tracing as an audit procedure for tests of transactions she
is primarily concerned with which audit objective?
15. Which of the following is not one of the four decisions about what evidence to
gather and how much of it to accumulate?
16. Given the economic and time constraints in which auditors can collect evidence
about management assertions about the financial statements, the auditor normally
gathers evidence that is:
17. ________ is the auditor's examination of the client's documents and records to
substantiate that the information is included in the financial statements.
18. When practical and reasonable, U.S. auditing standards require the confirmation
of:
19. Which of the following is not a characteristic of the reliability of evidence?
20. An auditor should examine minutes of the board of directors' meetings:
21. One of the purposes of an engagement letter is to avoid misunderstandings with
the client. This is important for:
22. Which of the following best describes the corporate minutes of an entity?
23. Written communication that the auditor will provide reasonable assurance for the
detection of fraud is found in:
24. The audit team gathers information about a new client's business and industry in
order to obtain:
25. Related party: