Exam 2: The Financial Statement Auditing Environment

The first PCAOB standard of reporting requires that,"the report shall state whether the financial statements are presented in accordance with generally accepted accounting principles." This passage requires

Which of the following best describes what is meant by generally accepted auditing standards?

Which of the following is not explicitly a part of the IIA's definition of internal auditing?

The IAASB and the ASB collaborated on a replacement for the 10 GAAS standards which include principles underlying an audit conducted in accordance with generally accepted auditing standards.

The IAASB and the ASB have collaborated on the principles underlying an audit conducted in accordance with generally accepted auditing standards.These principles are grouped into four categories.What are the four categories?

Define corporate governance,the board of directors,and the audit committee and explain how they relate to each other.

One of the five basic business processes is the warehousing cycle.

The main difference between SAS and AU is

There are several types of audit services that are provided by auditors.Identify and define three of these types of audits.

Who bears ultimate responsibility for the financial statements?

What is the general character of the work conducted in performing a forensic audit for a company?

The Public Company Accounting Oversight Board's role is to

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

Which of the following is NOT a requirement of the Sarbanes-Oxley Act?

The audit committee generally includes senior executives of the organization.

Which of the following best describes the concept of risk assessment on which auditors can provide independent assurance?

Typically,an external auditor first gets supervisory experience at what level of authority?

A financial statement audit is generally organized based on the five basic business processes or cycles.

Which of the following describes the PCAOB generally accepted auditing standard requiring a critical review of the work done and the judgment exercised by those assisting in an audit at every level of supervision?

Jane Goodperson performed an audit on the Quagmire Corporation and issued an unqualified opinion.Jane performed the audit with due professional care and in accordance with generally accepted auditing standards.Two months after the report is issued,Jane discovers on the news that the CEO of Quagmire,Johnny Best,had been stealing small amounts of inventory.The amount,however,is immaterial compared to the overall inventory of the corporation.Jane soon receives a call from Quagmire's CFO,Mark Beastly.Mark wants Jane to refund her audit fees.Mark thinks Jane did not properly perform the audit,as she did not discover this fraud.Further,he feels that now Quagmire's financial statements are not fairly stated because of Jane.How should Jane respond to this claim?