Question 1

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

Accepted Answer

A)  Uniform CPA examination requirement 
B)  Educational requirements 
C)  Character requirements 
D)  Experience requirement 
A)  Uniform CPA examination requirement 
B)  Educational requirements 
C)  Character requirements 
D)  Experience requirement C

Question 2

The use of the Certified Public Accountant title is regulated by:

Accepted Answer

A)  the federal government. 
B)  state law through a licensing department or agency 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 a licensing department or agency 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. B

Question 3

________ risk reflects the possibility that the information upon which the business decision was made was inaccurate.

Accepted Answer

A)  Client acceptance 
B)  Information 
C)  Business 
D)  Control 
A)  Client acceptance 
B)  Information 
C)  Business 
D)  Control B

Question 4

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 5

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 6

What are the five categories of attestation services?

Accepted Answer

The five categories of attestation servi

Question 7

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 8

An auditor must be competent and have an independent mental attitude.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Match the engagement described to the (A)type of audit and (B)auditor that would perform the engagement.Each engagement will have an answer from List-A and List-B.An answer can be used once,more than once,or not at all.   Engagement:
1.Evaluate a company's payroll processing for economy.
2.Evaluate/determine if bank covenants are being met.
3.Evaluate financial statements that are to be submitted to a bank.
4.Evaluate the promptness of materials inspection in a manufacturer's receiving department.
5.Determine if Medicare reimbursements are in accordance with the Healthcare Financing Administration (HCFA).
6.Determine if the tax return of a multinational corporation is in accordance with the tax code.
7.Determine if a public school is properly applying their reimbursement for the payment-in-kind program.
8.Determine the effectiveness of a Department of Defense project.

Accepted Answer

1.c,d
2.b,

Question 11

One objective of an operational audit is to:

Accepted Answer

A)  determine whether the financial statements fairly present the entity's operations. 
B)  determine if the auditee is in compliance with GAAP. 
C)  make recommendations for improving performance. 
D)  report on the entity's relative success in attaining profit maximization. 
A)  determine whether the financial statements fairly present the entity's operations. 
B)  determine if the auditee is in compliance with GAAP. 
C)  make recommendations for improving performance. 
D)  report on the entity's relative success in attaining profit maximization.

Question 12

An accountant:

Accepted Answer

A)  must possess expertise in the accumulation of audit evidence. 
B)  must decide the number and types of items to test. 
C)  must have an understanding of the principles and rules that provide the basis for preparing the accounting information. 
D)  must be a CPA. 
A)  must possess expertise in the accumulation of audit evidence. 
B)  must decide the number and types of items to test. 
C)  must have an understanding of the principles and rules that provide the basis for preparing the accounting information. 
D)  must be a CPA.

Question 13

Explain what is meant by information risk,and list the four causes of this risk.

Accepted Answer

Information risk reflects the possibilit

Question 14

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 15

The Sarbanes-Oxley Act establishes standards related to the audits of privately held companies.

Accepted Answer

A) True 
 B)False

Question 16

The Sarbanes-Oxley Act is widely viewed as having ushered in sweeping changes to auditing and financial reporting.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following are required to have a written report regarding the assertion of another party?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 18

The most common way for users to obtain reliable information is to:

Accepted Answer

A)  have an internal audit. 
B)  have an independent audit. 
C)  verify all information individually. 
D)  verify the information with management. 
A)  have an internal audit. 
B)  have an independent audit. 
C)  verify all information individually. 
D)  verify the information with management.

Question 19

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 accumulation and interpretation of evidence related to a company's financial statements. 
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 accumulation and interpretation of evidence related to a company's financial statements.

Question 20

Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n):

Accepted Answer

A)  accounting and bookkeeping service. 
B)  attestation service. 
C)  assurance service. 
D)  tax service. 
A)  accounting and bookkeeping service. 
B)  attestation service. 
C)  assurance service. 
D)  tax service.

Exam 1: The Assurance Services Market

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

The use of the Certified Public Accountant title is regulated by:

________ risk reflects the possibility that the information upon which the business decision was made was inaccurate.

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

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

What are the five categories of attestation services?

Three common types of attestation services are:

An auditor must be competent and have an independent mental attitude.

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

One objective of an operational audit is to:

An accountant:

Explain what is meant by information risk,and list the four causes of this risk.

The Sarbanes-Oxley Act establishes standards related to the audits of privately held companies.

The Sarbanes-Oxley Act is widely viewed as having ushered in sweeping changes to auditing and financial reporting.

Which of the following are required to have a written report regarding the assertion of another party?

The most common way for users to obtain reliable information is to:

The trait that distinguishes auditors from accountants is the:

Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n):

The Audit Standards Setting Process

Audit Reports

Legal Liability Considerations for Auditors

Ethics and the Audit Profession

Audit Responsibilities and Objectives

Nature and Type of Audit Evidence

Audit Planning

Considering Materiality and Audit Risk

Considering Internal Control

Considering the Risk of Fraud

Implications of Information Technology for the Audit Process

Developing the Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

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, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Inventory and Warehousing Cycle

Audit of the Payroll and Personnel Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Audit Completion

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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