Question 1

The criteria by which an auditor evaluates the information under audit may vary with the information being audited.

Accepted Answer

A) True 
 B)False

Question 2

To perform an audit,it is necessary for the information to be in a verifiable form and there must be some criteria by which the auditor can evaluate the information.Detail the information and criteria that would be used when
(A)an independent CPA firm audits a company's historical financial statements.
(B)an Internal Revenue Service auditor audits that same company's tax return.
(C)an internal auditor performs an operational audit to evaluate whether the company's computerized payroll processing system is operating efficiently and effectively.

Accepted Answer

(A)The information used by a CPA firm in

Question 3

Discuss the similarities and differences between the roles of independent auditors,GAO auditors,internal revenue agents,and internal auditors.

Accepted Answer

The roles of all four types of auditors

Question 4

In the audit of historical financial statements,management asserts that the financial statements are fairly stated in accordance with what standards?

Accepted Answer

A) regulatory accounting principles 
B) applicable international accounting standards 
C) applicable U.S.accounting standards 
D) B and C 
A) regulatory accounting principles 
B) applicable international accounting standards 
C) applicable U.S.accounting standards 
D) B and C

Question 5

When auditing accounting data,auditors focus on

Accepted Answer

A) determining whether recorded information properly reflects the economic events that occurred during the accounting period. 
B) determining if fraud has occurred. 
C) determining if taxable income has been calculated correctly. 
D) analyzing the financial information to be sure that it complies with government requirements. 
A) determining whether recorded information properly reflects the economic events that occurred during the accounting period. 
B) determining if fraud has occurred. 
C) determining if taxable income has been calculated correctly. 
D) analyzing the financial information to be sure that it complies with government requirements.

Question 6

In the auditing process

Accepted Answer

A) the types and amounts of evidence remain constant from audit to audit. 
B) the criteria for evaluating information will not vary depending on the information being audited. 
C) the audit report communicates the auditor's findings to users. 
D) records are gathered by the auditor to determine whether the audited information is stated in accordance with SEC standards. 
A) the types and amounts of evidence remain constant from audit to audit. 
B) the criteria for evaluating information will not vary depending on the information being audited. 
C) the audit report communicates the auditor's findings to users. 
D) records are gathered by the auditor to determine whether the audited information is stated in accordance with SEC standards.

Question 7

Which of the following services provides the lowest level of assurance on a financial statement?

Accepted Answer

A) review 
B) audit 
C) Neither service provides assurance on financial statements. 
D) Each service provides the same level of assurance on financial statements. 
A) review 
B) audit 
C) Neither service provides assurance on financial statements. 
D) Each service provides the same level of assurance on financial statements.

Question 8

List and discuss the three primary requirements to become a CPA.

Accepted Answer

The three primary requirements for becom

Question 9

Section 404 of the Sarbanes-Oxley Act requires public companies to have an external auditor attest to their internal control over financial reporting.

Accepted Answer

A) True 
 B)False

Question 10

Both accountants and auditors must possess expertise in the accumulation and interpretation of audit evidence.

Accepted Answer

A) True 
 B)False

Question 11

Which type of auditor audits the financial information prepared by various federal government agencies before it is submitted to Congress?

Accepted Answer

A) internal auditor 
B) revenue agent 
C) independent auditor 
D) GAO auditor 
A) internal auditor 
B) revenue agent 
C) independent auditor 
D) GAO auditor

Question 12

The trait that distinguishes auditors from accountants is the

Accepted Answer

A) auditor's ability to interpret accounting principles generally accepted in the United States. 
B) auditor's education beyond the bachelor's degree. 
C) auditor's ability to interpret FASB Statements. 
D) auditor's expertise in the accumulation and interpretation of audit evidence. 
A) auditor's ability to interpret accounting principles generally accepted in the United States. 
B) auditor's education beyond the bachelor's degree. 
C) auditor's ability to interpret FASB Statements. 
D) auditor's expertise in the accumulation and interpretation of audit evidence.

Question 13

Evidence is paramount to audit and attestation engagements.List the four basic types of audit evidence.

Accepted Answer

The four types of audit and attestation

Question 14

The possibility that a business may not be able to repay a bank loan because of an economic downturn is referred to as

Accepted Answer

A) materiality risk. 
B) information risk. 
C) interest rate risk. 
D) business risk. 
A) materiality risk. 
B) information risk. 
C) interest rate risk. 
D) business risk.

Question 15

Auditing can have a significant effect on both information risk and business risk.

Accepted Answer

A) True 
 B)False

Question 16

Three common types of attestation services are

Accepted Answer

A) audits of historical financial statements,reviews of historical financial statements,and audits of internal control over financial reporting. 
B) audits of historical financial information,verifications of historical financial information,and attestations regarding internal controls. 
C) reviews of historical financial information,verifications of future financial information,and attestations regarding internal controls. 
D) audits of historical financial information,reviews of controls related to investments,and verifications of historical financial information. 
A) audits of historical financial statements,reviews of historical financial statements,and audits of internal control over financial reporting. 
B) audits of historical financial information,verifications of historical financial information,and attestations regarding internal controls. 
C) reviews of historical financial information,verifications of future financial information,and attestations regarding internal controls. 
D) audits of historical financial information,reviews of controls related to investments,and verifications of historical financial information.

Question 17

The use of the Certified Public Accountant title is regulated by

Accepted Answer

A) the federal government. 
B) state law through the licensing departments of each state. 
C) the American Institute of Certified Public Accountants through the licensing departments of the tax and auditing committees. 
D) the Securities and Exchange Commission. 
A) the federal government. 
B) state law through the licensing departments of each state. 
C) the American Institute of Certified Public Accountants through the licensing departments of the tax and auditing committees. 
D) the Securities and Exchange Commission.

Question 18

Which one of the following is more difficult to evaluate objectively?

Accepted Answer

A) presentation of financial statements in accordance with generally accepted accounting principles 
B) compliance with government regulations 
C) efficiency and effectiveness of operations 
D) All three of the above are equally difficult. 
A) presentation of financial statements in accordance with generally accepted accounting principles 
B) compliance with government regulations 
C) efficiency and effectiveness of operations 
D) All three of the above are equally difficult.

Question 19

A correct relationship among the auditor,the client,and the external users is

Accepted Answer

A) management of a public company hires the independent auditor. 
B) the audit committee of a private company hires the independent auditor. 
C) the client provides capital to the external users. 
D) the external users can rely upon the auditor's report to reduce information risk. 
A) management of a public company hires the independent auditor. 
B) the audit committee of a private company hires the independent auditor. 
C) the client provides capital to the external users. 
D) the external users can rely upon the auditor's report to reduce information risk.

Question 20

The three requirements for becoming a CPA include all but which of the following?

Accepted Answer

A) uniform CPA examination requirement 
B) education requirements 
C) character requirements 
D) experience requirement 
A) uniform CPA examination requirement 
B) education requirements 
C) character requirements 
D) experience requirement

Exam 1: The Demand for Audit and Other Assurance Services

The criteria by which an auditor evaluates the information under audit may vary with the information being audited.

Discuss the similarities and differences between the roles of independent auditors,GAO auditors,internal revenue agents,and internal auditors.

In the audit of historical financial statements,management asserts that the financial statements are fairly stated in accordance with what standards?

When auditing accounting data,auditors focus on

In the auditing process

Which of the following services provides the lowest level of assurance on a financial statement?

List and discuss the three primary requirements to become a CPA.

Section 404 of the Sarbanes-Oxley Act requires public companies to have an external auditor attest to their internal control over financial reporting.

Both accountants and auditors must possess expertise in the accumulation and interpretation of audit evidence.

Which type of auditor audits the financial information prepared by various federal government agencies before it is submitted to Congress?

The trait that distinguishes auditors from accountants is the

Evidence is paramount to audit and attestation engagements.List the four basic types of audit evidence.

The possibility that a business may not be able to repay a bank loan because of an economic downturn is referred to as

Auditing can have a significant effect on both information risk and business risk.

Three common types of attestation services are

The use of the Certified Public Accountant title is regulated by

Which one of the following is more difficult to evaluate objectively?

A correct relationship among the auditor,the client,and the external users is

The three requirements for becoming a CPA include all but which of the following?

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls,

Completing the Tests in the Acquisition and Payment Cycle:

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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