Question 1

Which one of the following is a factor that creates a need for an independent auditor's assessment of the financial statement presentation?

Accepted Answer

A)  Complexity of transactions affecting the financial statements. 
B)  Lack of criteria on which to base information. 
C)  Remoteness of the user from the organization. 
D)  Both A and C. 
E)  Both A and B. 
A)  Complexity of transactions affecting the financial statements. 
B)  Lack of criteria on which to base information. 
C)  Remoteness of the user from the organization. 
D)  Both A and C. 
E)  Both A and B.

Question 2

The scope of the work to be done by the auditor on the audit is described in which document?

Accepted Answer

A)  Contract letter. 
B)  Management letter. 
C)  Representation letter. 
D)  Engagement letter. 
A)  Contract letter. 
B)  Management letter. 
C)  Representation letter. 
D)  Engagement letter.

Question 3

Which of the following is not part of the systematic process called auditing?

Accepted Answer

A)  Communicating results of the audit to users. 
B)  Procuring and evaluating evidence. 
C)  Providing important managerial decisions for a client. 
D)  Comparing evidence regarding assertions to certain established criteria. 
A)  Communicating results of the audit to users. 
B)  Procuring and evaluating evidence. 
C)  Providing important managerial decisions for a client. 
D)  Comparing evidence regarding assertions to certain established criteria.

Question 4

Which term describes the type of threat which occurs when top management threatens to replace the audit firm because of a disagreement over an accounting issue?

Accepted Answer

A)  Management participation threat. 
B)  Undue influence threat. 
C)  Adverse interest threat. 
D)  Financial self-interest threat. 
A)  Management participation threat. 
B)  Undue influence threat. 
C)  Adverse interest threat. 
D)  Financial self-interest threat.

Question 5

To conduct an audit, what must an auditor do?

Accepted Answer

A)  Comply with relevant ethical standards. 
B)  Exercise perfect judgment. 
C)  Obtain sufficient appropriate evidence to provide absolute assurance. 
D)  All of the above. 
A)  Comply with relevant ethical standards. 
B)  Exercise perfect judgment. 
C)  Obtain sufficient appropriate evidence to provide absolute assurance. 
D)  All of the above.

Question 6

Which of the following does the public expect of auditors?

Accepted Answer

A)  Understand and enforce principles that best portray the spirit of FASB concepts. 
B)  Be neutral to preparers and users of financial information. 
C)  Recognize that the investing public is the primary user of audit services. 
D)  Take responsibility for the discovery of fraud. 
E)  All of the above are expectations of the public. 
A)  Understand and enforce principles that best portray the spirit of FASB concepts. 
B)  Be neutral to preparers and users of financial information. 
C)  Recognize that the investing public is the primary user of audit services. 
D)  Take responsibility for the discovery of fraud. 
E)  All of the above are expectations of the public.

Question 7

What document communicates the conclusions of the financial statement audit?

Accepted Answer

A)  The financial statement. 
B)  Written management assertion. 
C)  The audit report. 
D)  None of the above. 
A)  The financial statement. 
B)  Written management assertion. 
C)  The audit report. 
D)  None of the above.

Question 8

Which of the following is a driver of audit quality?

Accepted Answer

A)  Audit firm culture. 
B)  Engagement team skills and attributes. 
C)  Factors outside control of auditors. 
D)  Investor requirements. 
E)  A, B, and C only. 
A)  Audit firm culture. 
B)  Engagement team skills and attributes. 
C)  Factors outside control of auditors. 
D)  Investor requirements. 
E)  A, B, and C only.

Question 9

The Sarbanes-Oxley Act sought to improve audit quality by removing the auditor independence requirements.

Accepted Answer

A) True 
 B)False

Question 10

Which phase of the audit opinion formulation process is most commonly thought of as auditing by the general public?

Accepted Answer

A)  Performing risk assessment. 
B)  Obtaining evidence about internal controls. 
C)  Obtaining substantive evidence about accounts. 
D)  Making reporting decisions. 
A)  Performing risk assessment. 
B)  Obtaining evidence about internal controls. 
C)  Obtaining substantive evidence about accounts. 
D)  Making reporting decisions.

Question 11

Effective audit processes, by themselves, are sufficient to achieve audit quality.

Accepted Answer

A) True 
 B)False

Question 12

Impact of Sarbanes-Oxley.
What are four ways that Sarbanes-Oxley impacted the auditing profession?

Accepted Answer

• Increased auditor independence
• Enhan

Question 13

The SEC and PCAOB independence rules for auditors are identical.

Accepted Answer

A) True 
 B)False

Question 14

Internal controls are the responsibility of management.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not a goal of auditor independence?

Accepted Answer

A)  To achieve consistent auditor regulation. 
B)  To foster high quality audits. 
C)  To promote investor confidence in the financial statements. 
D)  To minimize the possibility that external factors will influence auditor's judgements. 
A)  To achieve consistent auditor regulation. 
B)  To foster high quality audits. 
C)  To promote investor confidence in the financial statements. 
D)  To minimize the possibility that external factors will influence auditor's judgements.

Question 16

Users of financial statements.
Identify at least three types of users of financial statements. Describe their primary use of the financial statements and how the misstatement of those statements might injure the user.

Accepted Answer

Users of audited financial statements ma

Question 17

The SEC provides annual reports to the PCAOB.

Accepted Answer

A) True 
 B)False

Question 18

Which one of the following organizations is recognized for providing guidance on a framework for internal control ?

Accepted Answer

A)  AICPA. 
B)  PCAOB. 
C)  IAASB. 
D)  COSO. 
A)  AICPA. 
B)  PCAOB. 
C)  IAASB. 
D)  COSO.

Question 19

The need for assurance services arises because the interests of the users of information may be different from that of the interests of those responsible for providing information.

Accepted Answer

A) True 
 B)False

Question 20

Congress authorized which of the following organizations to establish generally accepted accounting principles?

Accepted Answer

A)  SEC. 
B)  APB. 
C)  AICPA. 
D)  FASB. 
A)  SEC. 
B)  APB. 
C)  AICPA. 
D)  FASB.

Which one of the following is a factor that creates a need for an independent auditor's assessment of the financial statement presentation?

The scope of the work to be done by the auditor on the audit is described in which document?

Which of the following is not part of the systematic process called auditing?

Which term describes the type of threat which occurs when top management threatens to replace the audit firm because of a disagreement over an accounting issue?

To conduct an audit, what must an auditor do?

Which of the following does the public expect of auditors?

What document communicates the conclusions of the financial statement audit?

Which of the following is a driver of audit quality?

The Sarbanes-Oxley Act sought to improve audit quality by removing the auditor independence requirements.

Which phase of the audit opinion formulation process is most commonly thought of as auditing by the general public?

Effective audit processes, by themselves, are sufficient to achieve audit quality.

Impact of Sarbanes-Oxley. What are four ways that Sarbanes-Oxley impacted the auditing profession?

The SEC and PCAOB independence rules for auditors are identical.

Internal controls are the responsibility of management.

Which of the following is not a goal of auditor independence?

Users of financial statements. Identify at least three types of users of financial statements. Describe their primary use of the financial statements and how the misstatement of those statements might injure the user.

The SEC provides annual reports to the PCAOB.

Which one of the following organizations is recognized for providing guidance on a framework for internal control ?

The need for assurance services arises because the interests of the users of information may be different from that of the interests of those responsible for providing information.

Congress authorized which of the following organizations to establish generally accepted accounting principles?

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

Which one of the following is a factor that creates a need for an independent auditor's assessment of the financial statement presentation?

The scope of the work to be done by the auditor on the audit is described in which document?

Which of the following is not part of the systematic process called auditing?

Which term describes the type of threat which occurs when top management threatens to replace the audit firm because of a disagreement over an accounting issue?

To conduct an audit, what must an auditor do?

Which of the following does the public expect of auditors?

What document communicates the conclusions of the financial statement audit?

Which of the following is a driver of audit quality?

The Sarbanes-Oxley Act sought to improve audit quality by removing the auditor independence requirements.

Which phase of the audit opinion formulation process is most commonly thought of as auditing by the general public?

Effective audit processes, by themselves, are sufficient to achieve audit quality.

Impact of Sarbanes-Oxley. What are four ways that Sarbanes-Oxley impacted the auditing profession?

The SEC and PCAOB independence rules for auditors are identical.

Internal controls are the responsibility of management.

Which of the following is not a goal of auditor independence?

Users of financial statements. Identify at least three types of users of financial statements. Describe their primary use of the financial statements and how the misstatement of those statements might injure the user.

The SEC provides annual reports to the PCAOB.

Which one of the following organizations is recognized for providing guidance on a framework for internal control ?

The need for assurance services arises because the interests of the users of information may be different from that of the interests of those responsible for providing information.

Congress authorized which of the following organizations to establish generally accepted accounting principles?

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