Question 1

Statements on Standards for Accounting and Review Services are issued by the:

Accepted Answer

A)  Accounting and Review Services Committee. 
B)  Professional Ethics Executive Committee. 
C)  Securities and Exchange Commission. 
D)  Financial Accounting Standards Board. 
A)  Accounting and Review Services Committee. 
B)  Professional Ethics Executive Committee. 
C)  Securities and Exchange Commission. 
D)  Financial Accounting Standards Board.

Question 2

Historically auditing standards have been organized into three categories,including:

Accepted Answer

A)  Standards of field work. 
B)  Purpose of an audit. 
C)  Responsibilities of the auditor. 
D)  Proper planning and supervision. 
A)  Standards of field work. 
B)  Purpose of an audit. 
C)  Responsibilities of the auditor. 
D)  Proper planning and supervision.

Question 3

All CPA firms registered with the PCAOB are required to undergo a peer review annually.

Accepted Answer

A) True 
 B)False

Question 4

List and describe the six elements of quality control.Who establishes the standards for quality control?

Accepted Answer

•Leadership responsibilities for quality

Question 5

The difference between the Securities Act of 1933 and the Securities Act of 1934 is that only the 1934 act requires audited financial statements.

Accepted Answer

A) True 
 B)False

Question 6

Form 10-K must be filed with the SEC whenever a public company experiences a significant event.

Accepted Answer

A) True 
 B)False

Question 7

The form that must be completed and filed with the Securities and Exchange Commission whenever a company experiences a significant event that is of interest to public investors is the:

Accepted Answer

A)  Form S-1. 
B)  Form 8-K. 
C)  Form 10-K. 
D)  Form 10-Q. 
A)  Form S-1. 
B)  Form 8-K. 
C)  Form 10-K. 
D)  Form 10-Q.

Question 8

The PCAOB considers International Standards on Auditing (ISAs)when developing its standards.

Accepted Answer

A) True 
 B)False

Question 9

Many small,local accounting firms do not perform audits as their primary services to their clients include accounting and tax.

Accepted Answer

A) True 
 B)False

Question 10

Statements on Auditing Standards (SASs)are issued by the Public Company Accounting Oversight Board.

Accepted Answer

A) True 
 B)False

Question 11

List and describe the three factors that influence the organizational structure of all CPA firms.What are the most common forms of CPA firm organization?

Accepted Answer

The three factors that influence the org

Question 12

The purpose of establishing quality control policies and procedures to accept or continue a client relationship is to:

Accepted Answer

A)  provide reasonable assurance that personnel are adequately trained to fulfill their responsibilities. 
B)  monitor the risk factors concerning misstatements that arise from the misappropriation of assets. 
C)  document objective criteria for the CPA firm's peer review. 
D)  minimize the likelihood of associating with a client whose management may lack integrity. 
A)  provide reasonable assurance that personnel are adequately trained to fulfill their responsibilities. 
B)  monitor the risk factors concerning misstatements that arise from the misappropriation of assets. 
C)  document objective criteria for the CPA firm's peer review. 
D)  minimize the likelihood of associating with a client whose management may lack integrity.

Question 13

The Public Company Accounting Oversight Board:

Accepted Answer

A)  performs inspections of the quality controls of audit firms that audit public companies. 
B)  establishes auditing standards that must be followed by CPAs on all audits. 
C)  oversees auditors of private companies. 
D)  performs any of the above functions. 
A)  performs inspections of the quality controls of audit firms that audit public companies. 
B)  establishes auditing standards that must be followed by CPAs on all audits. 
C)  oversees auditors of private companies. 
D)  performs any of the above functions.

Question 14

Membership in the AICPA is restricted to CPAs who are currently practicing as independent auditors.

Accepted Answer

A) True 
 B)False

Question 15

Within the context of quality control,the primary purpose of continuing professional education and training activities is to enable a CPA firm to provide its personnel with:

Accepted Answer

A)  technical training that assures proficiency as a valuation expert. 
B)  professional education that is required in order to perform with due professional care. 
C)  knowledge required to fulfill assigned responsibilities. 
D)  knowledge required to perform a peer review. 
A)  technical training that assures proficiency as a valuation expert. 
B)  professional education that is required in order to perform with due professional care. 
C)  knowledge required to fulfill assigned responsibilities. 
D)  knowledge required to perform a peer review.

Question 16

The methods used by a CPA firm to ensure that the firm meets is professional responsibilities to clients and others is:

Accepted Answer

A)  continuing professional education. 
B)  compliance with generally accepted reporting standards. 
C)  quality control. 
D)  peer review. 
A)  continuing professional education. 
B)  compliance with generally accepted reporting standards. 
C)  quality control. 
D)  peer review.

Question 17

Discuss the relationship between quality control and generally accepted auditing standards.

Accepted Answer

For a CPA firm,quality control encompass

Question 18

Discuss the purpose of the Securities and Exchange Commission and its influence on setting generally accepted accounting principles.

Accepted Answer

The SEC,an agency of the federal governm

Question 19

For privately held companies who is responsible for establishing auditing standards?

Accepted Answer

A)  Securities and Exchange Commission 
B)  Public Company Accounting Oversight Board 
C)  Auditing Standards Board 
D)  National Association of Accounting 
A)  Securities and Exchange Commission 
B)  Public Company Accounting Oversight Board 
C)  Auditing Standards Board 
D)  National Association of Accounting

Question 20

Which of the following statements best describes the primary purpose of Statements on Auditing Standards?

Accepted Answer

A)  They are guides intended to set forth auditing procedures that are applicable to a variety of situations. 
B)  They are procedural outlines that are intended to narrow the areas of inconsistency and divergence of auditor opinion. 
C)  They are authoritative statements, enforced through the Code of Professional Conduct, and are intended to limit the degree of auditor judgment. 
D)  They are interpretations that are intended to clarify the meaning of "generally accepted auditing standards." 
A)  They are guides intended to set forth auditing procedures that are applicable to a variety of situations. 
B)  They are procedural outlines that are intended to narrow the areas of inconsistency and divergence of auditor opinion. 
C)  They are authoritative statements, enforced through the Code of Professional Conduct, and are intended to limit the degree of auditor judgment. 
D)  They are interpretations that are intended to clarify the meaning of "generally accepted auditing standards."

Exam 2: The Audit Standards Setting Process

Statements on Standards for Accounting and Review Services are issued by the:

Historically auditing standards have been organized into three categories,including:

All CPA firms registered with the PCAOB are required to undergo a peer review annually.

List and describe the six elements of quality control.Who establishes the standards for quality control?

The difference between the Securities Act of 1933 and the Securities Act of 1934 is that only the 1934 act requires audited financial statements.

Form 10-K must be filed with the SEC whenever a public company experiences a significant event.

The form that must be completed and filed with the Securities and Exchange Commission whenever a company experiences a significant event that is of interest to public investors is the:

The PCAOB considers International Standards on Auditing (ISAs)when developing its standards.

Many small,local accounting firms do not perform audits as their primary services to their clients include accounting and tax.

Statements on Auditing Standards (SASs)are issued by the Public Company Accounting Oversight Board.

List and describe the three factors that influence the organizational structure of all CPA firms.What are the most common forms of CPA firm organization?

The purpose of establishing quality control policies and procedures to accept or continue a client relationship is to:

The Public Company Accounting Oversight Board:

Membership in the AICPA is restricted to CPAs who are currently practicing as independent auditors.

Within the context of quality control,the primary purpose of continuing professional education and training activities is to enable a CPA firm to provide its personnel with:

The methods used by a CPA firm to ensure that the firm meets is professional responsibilities to clients and others is:

Discuss the relationship between quality control and generally accepted auditing standards.

Discuss the purpose of the Securities and Exchange Commission and its influence on setting generally accepted accounting principles.

For privately held companies who is responsible for establishing auditing standards?

Which of the following statements best describes the primary purpose of Statements on Auditing Standards?

The Assurance Services Market

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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