51) In which paragraph, if any, of a standard unqualified audit report does the auditor state his or her opinion regarding the effectiveness of the company's internal controls?
A) second paragraph
B) third paragraph
C) The auditor does not make an opinion regarding the effectiveness of the company's internal controls.
D) the footnotes to the audit report
52) An unqualified (or clean) opinion issued by an external auditor means:
A) the financial statements are reliable, except for one or more items stated in the third paragraph
B) the financial statements are unreliable
C) the auditor was unable to reach a professional opinion
D) the statements are reliable
53) An adverse opinion issued by the external auditor means that, in the auditor's opinion, the statements are:
A) reliable
B) reliable, except for one or more items stated in the third paragraph
C) unreliable
D) the auditor is unable to form an opinion regarding the financial statements
54) In a standard Statement of Management Responsibility for the Financial Statements, management indicates:
A) that it has audited the financial statements found in the annual report
B) it is responsible for the financial statements and all related financial information contained in the annual report
C) that no amounts found in the financial statements are based either on estimates or judgments
D) that the company is fiscally sound
55) A statement of responsibility is prepared by the:
A) external auditor stating his/her area of responsibility in preparing the audit
B) the company controller stating his/her area of responsibility in assisting with the audit
C) the company controller stating his/her responsibility for the preparation, integrity, and objectivity of the financial statements
D) company management stating its responsibility for the financial statements and all related financial information
56) The value of a company's common share can be estimated by dividing the company's current year estimated annual income by the investment capitalization rate.
57) Channel stuffing is a common fraud technique used to increase revenue.
58) Each company must prepare a separate statement of comprehensive income.
59) If the estimated value of a corporation is greater than its current market price an investor should sell their shares.
60) One way to estimate the current value of a corporation is to multiple the number of common shares outstanding by their current market price.