Exam 2: The Financial Statement Auditing Environment

Governmental auditing often extends beyond examinations leading to the expression of an opinion on the fairness of financial presentation and includes audits of efficiency, effectiveness, and

The Public Company Accounting Oversight Board's role is to

The objective of the second PCAOB Standard of Reporting is to provide assurance that

An "in-charge" auditor typically holds the rank of

The fourth PCAOB reporting standard requires the auditor's report to contain either an expression of opinion regarding the financial statements taken as a whole or an assertion to the effect that an opinion cannot be expressed. The objective of the fourth standard is to prevent

External auditors are referred to as "external" because

A typical objective of an operational audit is for the auditor to

The principles underlying an audit conducted in accordance with generally accepted auditing standards are grouped into four categories. The second category is that of "personal responsibility of the auditor." Generally explain what is intended by this principle.

Describe the organizations involved in standard setting for auditors in the United States and what their respective roles are in setting current auditing standards for companies in the United States.

PCAOB auditing standards must be followed on all financial statement audits performed in the U.S.

A financial statement audit must be conducted based on GAAP.

Which is not an attribute of an external auditor?

The three PCAOB general standards are concerned with

An internal auditor is likely to be more concerned with _________________ than the external auditor.

The first PCAOB general standard recognizes that regardless of how capable an individual may be in other fields, the individual cannot meet the requirements of the auditing standards without the proper

The first PCAOB general standard requires that the examination of financial statements is to be performed by a person or persons having adequate technical training and

A series of business and related auditing failures led to the passage of the Sarbanes-Oxley Act (2002).

The AICPA's Statements on Auditing Standards can be described as

Who bears ultimate responsibility for the financial statements?

The fourth PCAOB standard of reporting requires an auditor to render a report whenever an auditor's name is associated with financial statements. The overall purpose of the fourth standard of reporting is to require that reports