Exam 1: Auditing and the Public Accounting

An agreed upon procedures engagement is one in which the auditor performs specific procedures to attest to management's assertions for an outside third party.

The need for independent audits of financial statements can be attributed to all of the following conditions except:

The IRS is a division of the U.S. Treasury Department.

The primary focus of the audit is on information presented in set of financial statements.

The primary example of an audit service is the:

There are four conditions that give rise to the need for independent audits of financial statements. One of these conditions is complexity. In this context, complexity relates to all of the following except complexity:

Indicate for each of the following items the element of quality control to which it relates. 1.Policies should be established for making the decision whether to accept or retain a client in order to minimize the risk of associating with a client whose management lacks integrity. 2.Policies should be established to assure that personnel are independent of clients when performing attest services. 3.Policies and procedures must be established to provide an ongoing consideration and evaluation of the effectiveness of professional development activities. 4.Policies should be established to reasonably assure that work is assigned to personnel who have the technical training and proficiency required for the assignment. 5.Policies and procedures should be established for planning, performing, supervising, reviewing, documenting and communicating the results of each engagement.

Which one of the following is not among the conditions that give rise to a demand by external users for independent audits of financial statements?

The booklet titled Governmental Auditing Standards is known as the "green book" after the color of its cover.

The four components of the profession's multilevel regulatory framework include (1) principle setting, (2) firm regulation, (3) inspection and peer review, and (4) government regulation.

When providing audit services, the CPA is expected to be:

The AICPA established its Practice Monitoring Program in the early 1980's.

Which of the following is not one of the four common levels of assurance?

Which one of the following statements is not true of the AICPA?

The GAO reports directly to the:

An audit that involves obtaining and evaluating evidence about the efficiency and effectiveness of an entity's operating activities in relation to specified objectives is a(n):

The audit report on internal control is a variation of which type of audit?

The concept of independence is a key aspect of assurance services.

The three types of audits are listed below. Indicate the category to which each statement belongs by placing the following letters in the spaces provided:FSA:Financial Statement Audit, CA:Compliance Audit, or OA:Operational Audit. 1.The results of such an audit are distributed to a wide spectrum of users such as creditors, stockholders, regulatory agencies, and the general public. 2.This type of audit is often called a performance audit. 3.This audit may be based on criteria established by creditors. 4.The scope of such an audit may encompass all the activities of a department. 5.This audit relates to fair presentation of statements in accordance with GAAP.

Which of the following are independent private sector standard-setting bodies?