Question 1

Audit quality is driven, in part, by the audit firm's culture.

Accepted Answer

A) True 
 B)False  True

Question 2

Professional and regulatory organizations.
Identify at least four professional or regulatory organizations. Explain how and why they assist and/or monitor the audit and assurance profession.

Accepted Answer

PCAOB is the primary governing regulatory body of auditors of public company financial statements. It was established by the Congress as a result of the Sarbanes-Oxley Act of 2002. It sets auditing standards for audits of public companies, requires registration of audit firms auditing public companies and performs quality reviews of registered firms.
AICPA With the establishment of the PCAOB, the role of the AICPA has diminished. Membership in the organization is voluntary. The AICPA establishes standards for other attestation services, accounting and review services, consulting and tax services. It organizes continuing education programs and administers the Uniform CPA Examination.
State Boards of Accountancy license CPAs and are charged with regulating the profession at the state level.
SEC has been granted authority to establish GAAP for publicly traded companies. Its primary mission is to protect the investing public; it has oversight of the PCAOB.
The GAO is responsible for setting forth auditing standards for governmental agencies.
The IIA is a voluntary organization that administers the Certified Internal Auditor program and issues standards for the practice of internal audit.

Question 3

The Center for Audit Quality is responsible for the oversight of the peer review process for registered audit firms.

Accepted Answer

A) True 
 B)False  False

Question 4

Auditing is the process of verifying the accuracy of the financial statements.

Accepted Answer

A) True 
 B)False

Question 5

What is the primary role of the court system for the auditing profession?

Accepted Answer

A)  To act as a quality-control mechanism. 
B)  To provide guidance on unclear legislation. 
C)  To punish audit firms that issue the wrong audit report. 
D)  To express opinions on the fairness of accounting principles. 
A)  To act as a quality-control mechanism. 
B)  To provide guidance on unclear legislation. 
C)  To punish audit firms that issue the wrong audit report. 
D)  To express opinions on the fairness of accounting principles.

Question 6

Auditors generally need quantitative and mathematical skillsets more than they need communication and leadership skills.

Accepted Answer

A) True 
 B)False

Question 7

Requirements of auditors in public accounting.
Recent landscape changes in accounting and auditing developed from corporate fraud and, arguably, auditor failure. In order to continually lead and adapt to the dynamics of regulation, principles based accounting practices and auditing standards, what types of skills and traits are auditors required to possess?

Accepted Answer

In addition to integrity, ethics and ind

Question 8

Auditors should conduct their work with an attitude of professional skepticism.

Accepted Answer

A) True 
 B)False

Question 9

Independence is often referred to as the cornerstone of the auditing profession.

Accepted Answer

A) True 
 B)False

Question 10

The Center for Audit Quality was started by the International Federation of Accountants.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is typically an attribute of a smaller audit firm?

Accepted Answer

A)  The type of work is primarily external audits. 
B)  The firm has multiple teams that work on the audit of a single entitiy and then disband. 
C)  The firm has multiple teams that overlap across engagements. 
D)  The firm has a relatively higher level of staff turnover. 
A)  The type of work is primarily external audits. 
B)  The firm has multiple teams that work on the audit of a single entitiy and then disband. 
C)  The firm has multiple teams that overlap across engagements. 
D)  The firm has a relatively higher level of staff turnover.

Question 12

Auditing exists because users need unbiased information on which to assess management performance and make economic decisions.

Accepted Answer

A) True 
 B)False

Question 13

The AICPA has a peer review program that reviews and evaluates the portions of an audit firm's accounting and audit practice that are not inspected by the PCAOB.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following items should an auditor communicate to an audit committee?

Accepted Answer

A)  Any meaningful threats to auditor objectivity. 
B)  The scope of the audit. 
C)  The qualitative aspects of the entity's accounting and reporting and potential ways of improving financial reporting. 
D)  All of the above. 
A)  Any meaningful threats to auditor objectivity. 
B)  The scope of the audit. 
C)  The qualitative aspects of the entity's accounting and reporting and potential ways of improving financial reporting. 
D)  All of the above.

Question 15

Audit staff performing audit work must be appropriately supervised by partners and managers.

Accepted Answer

A) True 
 B)False

Question 16

The Need for Audited Financial Statements.
Why do financial statement users need independent assurance about information provided by management?

Accepted Answer

The need for independent assurance arise

Question 17

A key responsibility of the internal audit function is to provide assurance on the reliability of financial reporting to external stakeholders of a company.

Accepted Answer

A) True 
 B)False

Question 18

Attributes of Auditors.
Discuss the three or more attributes that an auditors possess in order to maintain credibility. Explain the importance of these attributes to the audit.

Accepted Answer

1) Subject Matter Knowledge - The assura

Question 19

The court system acts as a deterrent to quality controls for the auditing profession.

Accepted Answer

A) True 
 B)False

Question 20

Audits of publicly traded companies must be performed by multinational accounting firms.

Accepted Answer

A) True 
 B)False

Audit quality is driven, in part, by the audit firm's culture.

Professional and regulatory organizations. Identify at least four professional or regulatory organizations. Explain how and why they assist and/or monitor the audit and assurance profession.

The Center for Audit Quality is responsible for the oversight of the peer review process for registered audit firms.

Auditing is the process of verifying the accuracy of the financial statements.

What is the primary role of the court system for the auditing profession?

Auditors generally need quantitative and mathematical skillsets more than they need communication and leadership skills.

Auditors should conduct their work with an attitude of professional skepticism.

Independence is often referred to as the cornerstone of the auditing profession.

The Center for Audit Quality was started by the International Federation of Accountants.

Which of the following is typically an attribute of a smaller audit firm?

Auditing exists because users need unbiased information on which to assess management performance and make economic decisions.

The AICPA has a peer review program that reviews and evaluates the portions of an audit firm's accounting and audit practice that are not inspected by the PCAOB.

Which of the following items should an auditor communicate to an audit committee?

Audit staff performing audit work must be appropriately supervised by partners and managers.

The Need for Audited Financial Statements. Why do financial statement users need independent assurance about information provided by management?

A key responsibility of the internal audit function is to provide assurance on the reliability of financial reporting to external stakeholders of a company.

Attributes of Auditors. Discuss the three or more attributes that an auditors possess in order to maintain credibility. Explain the importance of these attributes to the audit.

The court system acts as a deterrent to quality controls for the auditing profession.

Audits of publicly traded companies must be performed by multinational accounting firms.

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditors

Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

Filters

Exam 1: Auditing: Integral to the Economy

Audit quality is driven, in part, by the audit firm's culture.

Professional and regulatory organizations. Identify at least four professional or regulatory organizations. Explain how and why they assist and/or monitor the audit and assurance profession.

The Center for Audit Quality is responsible for the oversight of the peer review process for registered audit firms.

Auditing is the process of verifying the accuracy of the financial statements.

What is the primary role of the court system for the auditing profession?

Auditors generally need quantitative and mathematical skillsets more than they need communication and leadership skills.

Auditors should conduct their work with an attitude of professional skepticism.

Independence is often referred to as the cornerstone of the auditing profession.

The Center for Audit Quality was started by the International Federation of Accountants.

Which of the following is typically an attribute of a smaller audit firm?

Auditing exists because users need unbiased information on which to assess management performance and make economic decisions.

The AICPA has a peer review program that reviews and evaluates the portions of an audit firm's accounting and audit practice that are not inspected by the PCAOB.

Which of the following items should an auditor communicate to an audit committee?

Audit staff performing audit work must be appropriately supervised by partners and managers.

The Need for Audited Financial Statements. Why do financial statement users need independent assurance about information provided by management?

A key responsibility of the internal audit function is to provide assurance on the reliability of financial reporting to external stakeholders of a company.

Attributes of Auditors. Discuss the three or more attributes that an auditors possess in order to maintain credibility. Explain the importance of these attributes to the audit.

The court system acts as a deterrent to quality controls for the auditing profession.

Audits of publicly traded companies must be performed by multinational accounting firms.

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditors

Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

Filters