1. Which of the following characteristics most likely would heighten an auditor's concern about the risk of material misstatements arising from fraudulent financial reporting?
2. According to the Bond Equivalent Yield (BEY) method, the yield on a $1,000, 13-week US Treasury bill purchased for $960 would be closest to .
3. Swift Co. has identified three operating segments that may require separate disclosure in Swift's general purpose financial statements for the year ended December 31 year 2. Information for year 2 follows: Segment (in thousands) A B C Total Reported revenue $ 42 $ 121 $ 14 $ 177 Reported profit(loss) $ 12 $ 65 $ (3) $ 74 Assets $ 470 $ 800 $ 80 $ 1350 Which of Swift's segments are required to be separately disclosed in its December 31 year 2 financial statements?
4. 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?
5. A bond with a five-year maturity, paying 8% coupons and with a face value of $100, is bought at 104.1 in year 0, when it is issued. If I need to sell the bond at the the end the third year, when its prevailing price is 82, what is my holding period return on this investment? (Assume coupons are not reinvested.) HINT: Accumulate all coupons.
