Question 1

Which of the following is an underlying condition that in part creates the demand by users for reliable information?

Accepted Answer

A)  Economic transactions that are numerous and complex 
B)  Decisions are time-sensitive 
C)  Users separated from accounting records by distance and time 
D)  Financial decisions that are important to investors and users 
E)  All of these 
A)  Economic transactions that are numerous and complex 
B)  Decisions are time-sensitive 
C)  Users separated from accounting records by distance and time 
D)  Financial decisions that are important to investors and users 
E)  All of these

Question 2

An auditor has substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time because of negative cash flows and working capital deficiencies.Under these circumstances,the auditor would be most concerned about the

Accepted Answer

A)  control environment factors that affect the organizational structure. 
B)  correlation of detection risk and inherent risk. 
C)  effectiveness of the entity's internal control activities. 
D)  possible effects on the entity's financial statements. 
A)  control environment factors that affect the organizational structure. 
B)  correlation of detection risk and inherent risk. 
C)  effectiveness of the entity's internal control activities. 
D)  possible effects on the entity's financial statements.

Question 3

Assurance services involve all of the following,except

Accepted Answer

A)  relevance as well as the reliability of information. 
B)  nonfinancial information as well as traditional financial statements. 
C)  providing absolute rather than reasonable assurance. 
D)  electronic databases as well as printed reports. 
A)  relevance as well as the reliability of information. 
B)  nonfinancial information as well as traditional financial statements. 
C)  providing absolute rather than reasonable assurance. 
D)  electronic databases as well as printed reports.

Question 4

Which of the following best describes assurance services?

Accepted Answer

A)  Independent professional services that report on the client's financial statements 
B)  Independent professional services that improve the quality of information for decision makers 
C)  Independent professional services that report on specific written management assertions 
D)  Independent professional services that improve the operations of the client 
A)  Independent professional services that report on the client's financial statements 
B)  Independent professional services that improve the quality of information for decision makers 
C)  Independent professional services that report on specific written management assertions 
D)  Independent professional services that improve the operations of the client

Question 5

The process of a CPA obtaining a certificate and license in a state other than the state in which the CPA's certificate was originally obtained is referred to as

Accepted Answer

A)  substantial equivalency. 
B)  quid pro quo. 
C)  relicensing. 
D)  re-examination. 
A)  substantial equivalency. 
B)  quid pro quo. 
C)  relicensing. 
D)  re-examination.

Question 6

The underlying conditions that create demand by users for reliable information include all of the following,except

Accepted Answer

A)  transactions are numerous and complex. 
B)  users lack professional skepticism. 
C)  users are separated from accounting records by distance and time. 
D)  financial decisions are important to investors and users. 
E)  decisions are time-sensitive. 
A)  transactions are numerous and complex. 
B)  users lack professional skepticism. 
C)  users are separated from accounting records by distance and time. 
D)  financial decisions are important to investors and users. 
E)  decisions are time-sensitive.

Question 7

Which of the following is not included in The American Accounting Association (AAA)definition of auditing?

Accepted Answer

A)  Potential conflict of interest 
B)  Systematic process 
C)  Assertions about economic actions 
D)  Established criteria 
A)  Potential conflict of interest 
B)  Systematic process 
C)  Assertions about economic actions 
D)  Established criteria

Question 8

An auditor selected items from the client's detailed inventory listing (that agreed to the financial statements).During the physical inventory observation,the auditor then found each item selected and counted the number of units on hand.Assuming that the amount on hand was the same as the amount in the client's detailed inventory listing,this procedure most likely would provide evidence concerning management's assertion of

Accepted Answer

A)  completeness. 
B)  valuation. 
C)  presentation and disclosure. 
D)  existence. 
E)  rights and obligations. 
A)  completeness. 
B)  valuation. 
C)  presentation and disclosure. 
D)  existence. 
E)  rights and obligations.

Question 9

The audit objective that all transactions and accounts that should be presented in the financial statements are in fact included is related to which of the PCAOB assertions?

Accepted Answer

A)  Existence 
B)  Rights and obligations 
C)  Completeness 
D)  Valuation 
A)  Existence 
B)  Rights and obligations 
C)  Completeness 
D)  Valuation

Question 10

Define assurance,attestation,and auditing in the context of "lending credibility."

Accepted Answer

Assurance is the "lending of credibility

Question 11

What is the term used to identify the risk that the client's financial statements may be materially false and misleading?

Accepted Answer

A)  Business risk 
B)  Information risk 
C)  Client risk 
D)  Risk assessment 
A)  Business risk 
B)  Information risk 
C)  Client risk 
D)  Risk assessment

Question 12

The auditor's judgment concerning the overall fairness of the presentation of financial position,results of operations,and cash flows is applied within the framework of

Accepted Answer

A)  quality control. 
B)  generally accepted auditing standards, which include the concept of materiality. 
C)  the auditor's evaluation of the audited company's internal control. 
D)  the applicable financial reporting framework (i.e., GAAP in the United States). 
A)  quality control. 
B)  generally accepted auditing standards, which include the concept of materiality. 
C)  the auditor's evaluation of the audited company's internal control. 
D)  the applicable financial reporting framework (i.e., GAAP in the United States).

Question 13

A practitioner is engaged to express an opinion on management's assertion that the square footage of a warehouse offered for sale is 150,000 square feet.The practitioner should refer to which of the following sources for professional guidance?

Accepted Answer

A)  Statement of Auditing Standards. 
B)  Statements on Standards for Attestation Engagements. 
C)  Statements on Standards for Accounting and Review Services. 
D)  Statements on Standards for Consulting Services. 
A)  Statement of Auditing Standards. 
B)  Statements on Standards for Attestation Engagements. 
C)  Statements on Standards for Accounting and Review Services. 
D)  Statements on Standards for Consulting Services.

Question 14

What is information risk? What is business risk?

Accepted Answer

Information risk is the risk t

Question 15

The four basic requirements for becoming a CPA in most states are

Accepted Answer

A)  education, the CPA Examination, experience, and substantial equivalency. 
B)  the CPA Examination, experience, continuing professional education, and a state certificate. 
C)  continuing professional education, the CPA Examination, experience, and an AICPA certificate. 
D)  education, the CPA Examination, experience, and a state certificate. 
A)  education, the CPA Examination, experience, and substantial equivalency. 
B)  the CPA Examination, experience, continuing professional education, and a state certificate. 
C)  continuing professional education, the CPA Examination, experience, and an AICPA certificate. 
D)  education, the CPA Examination, experience, and a state certificate.

Question 16

What are the differences between the American Accounting Association and AICPA definitions and objectives of auditing?

Accepted Answer

The AAA definition is broad and general

Question 17

What is operational auditing and by whom is it performed?

Accepted Answer

Operational auditing is the evaluation o

Question 18

The audit objective that all the transactions and accounts presented in the financial statements represent real assets,liabilities,revenues,and expenses is related most closely to which of the PCAOB assertions?

Accepted Answer

A)  Existence or occurrence 
B)  Rights and obligations 
C)  Completeness 
D)  Presentation and disclosure 
A)  Existence or occurrence 
B)  Rights and obligations 
C)  Completeness 
D)  Presentation and disclosure

Question 19

The Sarbanes-Oxley Act of 2002 requires that the key company officials certify the financial statements.Certification means that the company CEO and CFO must sign a statement indicating

Accepted Answer

A)  they have read the financial statements. 
B)  they are not aware of any false or misleading statements (or any key omitted disclosures). 
C)  they believe that the financial statements present an accurate picture of the company's financial condition. 
D)  All of these. 
A)  they have read the financial statements. 
B)  they are not aware of any false or misleading statements (or any key omitted disclosures). 
C)  they believe that the financial statements present an accurate picture of the company's financial condition. 
D)  All of these.

Question 20

Which of the following questions would be inappropriate for an auditor to ask a client when exhibiting an appropriate level of professional skepticism while completing an audit procedure related to the internal control system?

Accepted Answer

A)  What can go wrong in this process? 
B)  Which of your employees is a fraudster? 
C)  What else is important to know about this process? 
D)  What happens when a key employees goes on vacation? 
A)  What can go wrong in this process? 
B)  Which of your employees is a fraudster? 
C)  What else is important to know about this process? 
D)  What happens when a key employees goes on vacation?

Which of the following is an underlying condition that in part creates the demand by users for reliable information?

An auditor has substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time because of negative cash flows and working capital deficiencies.Under these circumstances,the auditor would be most concerned about the

Assurance services involve all of the following,except

Which of the following best describes assurance services?

The process of a CPA obtaining a certificate and license in a state other than the state in which the CPA's certificate was originally obtained is referred to as

The underlying conditions that create demand by users for reliable information include all of the following,except

Which of the following is not included in The American Accounting Association (AAA)definition of auditing?

The audit objective that all transactions and accounts that should be presented in the financial statements are in fact included is related to which of the PCAOB assertions?

Define assurance,attestation,and auditing in the context of "lending credibility."

What is the term used to identify the risk that the client's financial statements may be materially false and misleading?

The auditor's judgment concerning the overall fairness of the presentation of financial position,results of operations,and cash flows is applied within the framework of

A practitioner is engaged to express an opinion on management's assertion that the square footage of a warehouse offered for sale is 150,000 square feet.The practitioner should refer to which of the following sources for professional guidance?

What is information risk? What is business risk?

The four basic requirements for becoming a CPA in most states are

What are the differences between the American Accounting Association and AICPA definitions and objectives of auditing?

What is operational auditing and by whom is it performed?

The audit objective that all the transactions and accounts presented in the financial statements represent real assets,liabilities,revenues,and expenses is related most closely to which of the PCAOB assertions?

The Sarbanes-Oxley Act of 2002 requires that the key company officials certify the financial statements.Certification means that the company CEO and CFO must sign a statement indicating

Which of the following questions would be inappropriate for an auditor to ask a client when exhibiting an appropriate level of professional skepticism while completing an audit procedure related to the internal control system?

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits governmental Audits and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 1: Auditing and Assurance Services

Which of the following is an underlying condition that in part creates the demand by users for reliable information?

An auditor has substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time because of negative cash flows and working capital deficiencies.Under these circumstances,the auditor would be most concerned about the

Assurance services involve all of the following,except

Which of the following best describes assurance services?

The process of a CPA obtaining a certificate and license in a state other than the state in which the CPA's certificate was originally obtained is referred to as

The underlying conditions that create demand by users for reliable information include all of the following,except

Which of the following is not included in The American Accounting Association (AAA)definition of auditing?

The audit objective that all transactions and accounts that should be presented in the financial statements are in fact included is related to which of the PCAOB assertions?

Define assurance,attestation,and auditing in the context of "lending credibility."

What is the term used to identify the risk that the client's financial statements may be materially false and misleading?

The auditor's judgment concerning the overall fairness of the presentation of financial position,results of operations,and cash flows is applied within the framework of

A practitioner is engaged to express an opinion on management's assertion that the square footage of a warehouse offered for sale is 150,000 square feet.The practitioner should refer to which of the following sources for professional guidance?

What is information risk? What is business risk?

The four basic requirements for becoming a CPA in most states are

What are the differences between the American Accounting Association and AICPA definitions and objectives of auditing?

What is operational auditing and by whom is it performed?

The audit objective that all the transactions and accounts presented in the financial statements represent real assets,liabilities,revenues,and expenses is related most closely to which of the PCAOB assertions?

The Sarbanes-Oxley Act of 2002 requires that the key company officials certify the financial statements.Certification means that the company CEO and CFO must sign a statement indicating

Which of the following questions would be inappropriate for an auditor to ask a client when exhibiting an appropriate level of professional skepticism while completing an audit procedure related to the internal control system?

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits governmental Audits and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters