Question 1

As it relates to an audit, which of following statement about professional skepticism is true?

Accepted Answer

A)  Professional skepticism is not taken into consideration. 
B)  Professional skepticism relates only to the nature of procedures performed. 
C)  Professional skepticism is an attitude. 
D)  Professional skepticism is determined based upon the importance to a user of the financial statements. 
A)  Professional skepticism is not taken into consideration. 
B)  Professional skepticism relates only to the nature of procedures performed. 
C)  Professional skepticism is an attitude. 
D)  Professional skepticism is determined based upon the importance to a user of the financial statements.

Question 2

Which the following is not a reason for a public company to receive an audit?

Accepted Answer

A)  Potential bias in providing information. 
B)  Closeness between a user and the organization. 
C)  Complexity of the processing systems. 
D)  Remoteness between a user and the organization. 
A)  Potential bias in providing information. 
B)  Closeness between a user and the organization. 
C)  Complexity of the processing systems. 
D)  Remoteness between a user and the organization.

Question 3

What is the management of a company is responsible for?

Accepted Answer

A)  Hiring the auditor. 
B)  Preparing the financial statements. 
C)  The audit workpapers. 
D)  Ensuring auditor independence. 
A)  Hiring the auditor. 
B)  Preparing the financial statements. 
C)  The audit workpapers. 
D)  Ensuring auditor independence.

Question 4

An integrated audit requires the auditor to assess the effectiveness of internal controls.

Accepted Answer

A) True 
 B)False

Question 5

Users rely on the auditors' independent assessment of financial statement presentation because few users have direct knowledge of the company's operations.

Accepted Answer

A) True 
 B)False

Question 6

Auditing is the process of attesting to assertions about economic actions and events.

Accepted Answer

A) True 
 B)False

Question 7

Audit firm culture is one of the primary drivers of audit quality.

Accepted Answer

A) True 
 B)False

Question 8

Which one of the following is not a management expectation for independent auditors?

Accepted Answer

A)  An outside source of expertise on accounting matters. 
B)  Individuals who perform tests and draw conclusions on assertions. 
C)  A participant in management decision making. 
D)  A provider of a written communication. 
A)  An outside source of expertise on accounting matters. 
B)  Individuals who perform tests and draw conclusions on assertions. 
C)  A participant in management decision making. 
D)  A provider of a written communication.

Question 9

What is the first phase in an audit?

Accepted Answer

A)  Client acceptance or client continuance. 
B)  Understanding the client. 
C)  Understanding internal controls. 
D)  Testing of account balances. 
A)  Client acceptance or client continuance. 
B)  Understanding the client. 
C)  Understanding internal controls. 
D)  Testing of account balances.

Question 10

According to the AICPA, which of the following is not a safeguard to the auditing profession?

Accepted Answer

A)  Education. 
B)  Professional standards. 
C)  External reviews. 
D)  Legislation concerning competency requirements. 
A)  Education. 
B)  Professional standards. 
C)  External reviews. 
D)  Legislation concerning competency requirements.

Question 11

Which one of the following is not an example of a typical review program?

Accepted Answer

A)  Interoffice reviews. 
B)  Engagement quality review. 
C)  Peer reviews. 
D)  Self reviews. 
A)  Interoffice reviews. 
B)  Engagement quality review. 
C)  Peer reviews. 
D)  Self reviews.

Question 12

Regulatory and professional bodies.
Write the full name of the following regulatory and professional acronyms and describe the function of each entity:
PCAOB.AICPA.SEC.
IIA.FASB

Accepted Answer

PCAOB is the primary governing regulator

Question 13

What must audit firms do to perform financial statement audits for public companies?

Accepted Answer

A)  Register with the American Institute of Certified Public Accountants. 
B)  Register with the Institute of Internal Auditors. 
C)  Register with the U.S. General Accounting Office. 
D)  Register with the Public Company Accounting Oversight Board. 
A)  Register with the American Institute of Certified Public Accountants. 
B)  Register with the Institute of Internal Auditors. 
C)  Register with the U.S. General Accounting Office. 
D)  Register with the Public Company Accounting Oversight Board.

Question 14

Bondholders are one of the users of financial statements.

Accepted Answer

A) True 
 B)False

Question 15

What can users of the audit report reasonably expect from the audited financial statements?

Accepted Answer

A)  The financial statements are complete and contain many of the important financial disclosures. 
B)  The financial statements are presented fairly according to the substance of GAAP. 
C)  The financial statements are free from all errors. 
D)  All of the above. 
E)  None of the above. 
A)  The financial statements are complete and contain many of the important financial disclosures. 
B)  The financial statements are presented fairly according to the substance of GAAP. 
C)  The financial statements are free from all errors. 
D)  All of the above. 
E)  None of the above.

Question 16

What must an auditor do in an audit?

Accepted Answer

A)  Consider how the economic activity is portrayed in the financial statements. 
B)  Force management to make operational decisions that will improve the company's financial performance. 
C)  Disregard independence in order to find the underlying truth of the evidence. 
D)  Establish new criteria by which financial statements may be compared. 
A)  Consider how the economic activity is portrayed in the financial statements. 
B)  Force management to make operational decisions that will improve the company's financial performance. 
C)  Disregard independence in order to find the underlying truth of the evidence. 
D)  Establish new criteria by which financial statements may be compared.

Question 17

An "integrated audit" expresses an opinion on which of the following?

Accepted Answer

A)  The company's internal controls. 
B)  The company's financial statements. 
C)  The company's compliance with its rules and policies. 
D)  Both A and B. 
A)  The company's internal controls. 
B)  The company's financial statements. 
C)  The company's compliance with its rules and policies. 
D)  Both A and B.

Question 18

Which organization is responsible for setting International Standards on Auditing?

Accepted Answer

A)  IASB 
B)  IFRS 
C)  IAASB. 
D)  AICPA 
A)  IASB 
B)  IFRS 
C)  IAASB. 
D)  AICPA

Question 19

How is the audit report referred to when the auditor has no reservations about management's financial statements?

Accepted Answer

A)  An unqualified report. 
B)  A qualified report. 
C)  An adverse report. 
D)  An integrated report. 
A)  An unqualified report. 
B)  A qualified report. 
C)  An adverse report. 
D)  An integrated report.

Question 20

Which of the following groups is not typically considered to be a user of the audited financial statements?

Accepted Answer

A)  Management. 
B)  Vendors. 
C)  Retired Employees. 
D)  Competitors. 
A)  Management. 
B)  Vendors. 
C)  Retired Employees. 
D)  Competitors.

As it relates to an audit, which of following statement about professional skepticism is true?

Which the following is not a reason for a public company to receive an audit?

What is the management of a company is responsible for?

An integrated audit requires the auditor to assess the effectiveness of internal controls.

Users rely on the auditors' independent assessment of financial statement presentation because few users have direct knowledge of the company's operations.

Auditing is the process of attesting to assertions about economic actions and events.

Audit firm culture is one of the primary drivers of audit quality.

Which one of the following is not a management expectation for independent auditors?

What is the first phase in an audit?

According to the AICPA, which of the following is not a safeguard to the auditing profession?

Which one of the following is not an example of a typical review program?

Regulatory and professional bodies. Write the full name of the following regulatory and professional acronyms and describe the function of each entity: PCAOB.AICPA.SEC. IIA.FASB

What must audit firms do to perform financial statement audits for public companies?

Bondholders are one of the users of financial statements.

What can users of the audit report reasonably expect from the audited financial statements?

What must an auditor do in an audit?

An "integrated audit" expresses an opinion on which of the following?

Which organization is responsible for setting International Standards on Auditing?

How is the audit report referred to when the auditor has no reservations about management's financial statements?

Which of the following groups is not typically considered to be a user of the audited financial statements?

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

As it relates to an audit, which of following statement about professional skepticism is true?

Which the following is not a reason for a public company to receive an audit?

What is the management of a company is responsible for?

An integrated audit requires the auditor to assess the effectiveness of internal controls.

Users rely on the auditors' independent assessment of financial statement presentation because few users have direct knowledge of the company's operations.

Auditing is the process of attesting to assertions about economic actions and events.

Audit firm culture is one of the primary drivers of audit quality.

Which one of the following is not a management expectation for independent auditors?

What is the first phase in an audit?

According to the AICPA, which of the following is not a safeguard to the auditing profession?

Which one of the following is not an example of a typical review program?

Regulatory and professional bodies. Write the full name of the following regulatory and professional acronyms and describe the function of each entity: PCAOB.AICPA.SEC. IIA.FASB

What must audit firms do to perform financial statement audits for public companies?

Bondholders are one of the users of financial statements.

What can users of the audit report reasonably expect from the audited financial statements?

What must an auditor do in an audit?

An "integrated audit" expresses an opinion on which of the following?

Which organization is responsible for setting International Standards on Auditing?

How is the audit report referred to when the auditor has no reservations about management's financial statements?

Which of the following groups is not typically considered to be a user of the audited financial statements?

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