When determining the auditor’s or management’s responsibility for compliance with laws and regulations during an audit, which of the following statements below would be incorrect?

MULTIPLE CHOICE QUESTIONS FROM BECKER CPA EXAM REVIEW

6-24 (OBJECTIVES 6-3, 6-11) The following questions concern auditor responsibilities in an
audit of financial statements. Choose the best response.

a. The auditor’s responsibility regarding material misstatements caused by fraud is

(1) less than the auditor’s responsibility regarding material misstatements caused by
error.

(2) greater than the auditor’s responsibility regarding material misstatements caused
by error.

(3) the same as the auditor’s responsibility regarding material misstatements caused
by error.

(4) either less than or greater than the auditor’s responsibility regarding material
misstatements caused by error, depending on the circumstances.

b. Which of the following would not have a direct impact in determining the sufficiency
of evidence gathered during an audit?

(1) The cost-benefit relationship of obtaining the audit evidence
(2) The quality of audit evidence obtained
(3) The auditor’s professional judgment
(4) The risk of material misstatement

c. When determining the auditor’s or management’s responsibility for compliance with laws and regulations during an audit, which of the following statements below would be incorrect?
(1) The auditor is not responsible for preventing noncompliance with laws and
regulations

DISCUSSION QUESTIONS AND PROBLEMS
6-25 (OBJECTIVE 6-1) This problem requires you to access authoritative standards to
compare the objective of an audit as defined by AICPA auditing standards (see p. 149) and
International Standards on Auditing (ISA 200) (www.iaasb.org) and the objective of an
audit of internal control over financial reporting as defined by PCAOB auditing standards
(AS 2201) ( pcaobus.org).
Research

a. Compare the objective of an audit under AICPA Auditing Standards and International
Standards on Auditing. Are there substantive differences in the objective of an audit
as defined by these two sets of standards?

b. What is the objective of an audit of internal control over financial reporting according to PCAOB auditing standards?

c. What defines whether financial statements are fairly stated, and what defines whether
internal control is considered effective? Are they related?
6-26 (OBJECTIVES 6-2, 6-3) The following are selected portions of the report of management
from a published annual report.