Question 1

Forensic auditors:

Accepted Answer

A)  Investigate only fraud. 
B)  Look for specific and detailed information. 
C)  Perform engagements that can result in a standard, clean audit report. 
D)  May not be CPAs. 
A)  Investigate only fraud. 
B)  Look for specific and detailed information. 
C)  Perform engagements that can result in a standard, clean audit report. 
D)  May not be CPAs.

Question 2

Auditors consider and examine ICFR for all of the same reasons, whether they are auditing a public or a nonpublic company.

Accepted Answer

A) True 
 B)False

Question 3

The Audit Committee of the Board of Directors performs the audit and reports the results to shareholders and the Board of Directors.

Accepted Answer

A) True 
 B)False

Question 4

Assertions are:

Accepted Answer

A)  audited by the auditors. 
B)  declarations made by management. 
C)  declarations made by the auditor. 
D)  Both a and b 
A)  audited by the auditors. 
B)  declarations made by management. 
C)  declarations made by the auditor. 
D)  Both a and b

Question 5

What is the purpose of a financial statement audit?

Accepted Answer

A)  To provide assurance that the company is solvent. 
B)  To provide assurance that the company has an effective internal control system that can produce fair financial statements. 
C)  To provide assurance that the financial statements are reliable. 
D)  Both b and c 
A)  To provide assurance that the company is solvent. 
B)  To provide assurance that the company has an effective internal control system that can produce fair financial statements. 
C)  To provide assurance that the financial statements are reliable. 
D)  Both b and c

Question 6

The AICPA (American Institute of Certified Public Accountants):

Accepted Answer

A)  Is regulated by Congress. 
B)  Reports to the PCAOB. 
C)  Regulates CPAs at the state level. 
D)  None of the above. 
A)  Is regulated by Congress. 
B)  Reports to the PCAOB. 
C)  Regulates CPAs at the state level. 
D)  None of the above.

Question 7

Errors in financial statements are:

Accepted Answer

A)  never material. 
B)  intentional. 
C)  unintentional. 
D)  Both a and c 
A)  never material. 
B)  intentional. 
C)  unintentional. 
D)  Both a and c

Question 8

The Board of Directors:

Accepted Answer

A)  Reports to management. 
B)  Runs the company on a day-to-day basis. 
C)  Is elected by the shareholders. 
D)  All of the above. 
A)  Reports to management. 
B)  Runs the company on a day-to-day basis. 
C)  Is elected by the shareholders. 
D)  All of the above.

Question 9

Shareholders use audit reports to monitor management performance. An example of an item that an audit report does NOT provide is:

Accepted Answer

A)  Reasonable assurance on reported information that might be used to provide justification for management's performance-based compensation. 
B)  Access to foreign markets. 
C)  An indication of whether or not a company has major in its internal control over financial reporting. 
D)  Feedback on any ICFR material weaknesses that management may choose to use to improve operational or financial efficiency. 
A)  Reasonable assurance on reported information that might be used to provide justification for management's performance-based compensation. 
B)  Access to foreign markets. 
C)  An indication of whether or not a company has major in its internal control over financial reporting. 
D)  Feedback on any ICFR material weaknesses that management may choose to use to improve operational or financial efficiency.

Question 10

The PCAOB was formed to meet one of the requirements in the Sarbanes-Oxley Act of 2002.

Accepted Answer

A) True 
 B)False

Question 11

The audit engagement team:

Accepted Answer

A)  is chosen by the client. 
B)  is some combination of partners, managers, seniors and associates. 
C)  is a mix of CPA firm and client employees. 
D)  None of the above. 
A)  is chosen by the client. 
B)  is some combination of partners, managers, seniors and associates. 
C)  is a mix of CPA firm and client employees. 
D)  None of the above.

Question 12

Which of the following is NOT a "Big Four" firm?

Accepted Answer

A)  PwC. 
B)  Grant-Thornton. 
C)  Deloitte & Touche. 
D)  Ernst & Young 
A)  PwC. 
B)  Grant-Thornton. 
C)  Deloitte & Touche. 
D)  Ernst & Young

Question 13

The value of an integrated audit

Accepted Answer

A)  Is limited to its effects on the capital markets since integrated audits are conducted only for publicly traded companies. 
B)  Extends to various groups and probably is different for the different people and entities. 
C)  Is exactly the same as the value generated by a financial statement audit of a nonpublic company. 
D)  None of the above are correct. 
A)  Is limited to its effects on the capital markets since integrated audits are conducted only for publicly traded companies. 
B)  Extends to various groups and probably is different for the different people and entities. 
C)  Is exactly the same as the value generated by a financial statement audit of a nonpublic company. 
D)  None of the above are correct.

Question 14

Auditing is defined as a:

Accepted Answer

A)  set pattern of tests. 
B)  random process. 
C)  systematic process. 
D)  All of the above. 
A)  set pattern of tests. 
B)  random process. 
C)  systematic process. 
D)  All of the above.

Question 15

If management has presented the actual economic events and situation according to the accounting standards, then there is a high degree of correspondence between the underlying evidence and the resulting financial statements.

Accepted Answer

A) True 
 B)False

Question 16

Who is responsible for the design and operation of ICFR?

Accepted Answer

A)  The auditor. 
B)  The company's management. 
C)  Both a and b 
D)  None of the above. 
A)  The auditor. 
B)  The company's management. 
C)  Both a and b 
D)  None of the above.

Question 17

Financial statements must be prepared:

Accepted Answer

A)  in accordance with GAAP. 
B)  in accordance with IFRS. 
C)  in accordance with OCBOA. 
D)  Any of the above, depending on which set of standards the circumstances dictate as applicable. 
A)  in accordance with GAAP. 
B)  in accordance with IFRS. 
C)  in accordance with OCBOA. 
D)  Any of the above, depending on which set of standards the circumstances dictate as applicable.

Question 18

The SEC requires publicly traded companies to file

Accepted Answer

A)  10Ks that include audited quarterly financial statements and audited management reports on internal control over financial reporting. 
B)  10Qs that include audited quarterly financial statements. 
C)  10Ks that include audited annual financial statements, with or without a management report on ICFR. 
D)  10Ks that include annual financial statements, a management report on ICFR, and the audit opinions resulting from an integrated audit. 
A)  10Ks that include audited quarterly financial statements and audited management reports on internal control over financial reporting. 
B)  10Qs that include audited quarterly financial statements. 
C)  10Ks that include audited annual financial statements, with or without a management report on ICFR. 
D)  10Ks that include annual financial statements, a management report on ICFR, and the audit opinions resulting from an integrated audit.

Question 19

An auditor's report on an integrated audit will be unqualified if internal control over financial reporting does not have any material weaknesses and the financial statements are fairly presented.

Accepted Answer

A) True 
 B)False

Question 20

The organization of a typical CPA firm is similar to that of a corporation.

Accepted Answer

A) True 
 B)False

Forensic auditors:

Auditors consider and examine ICFR for all of the same reasons, whether they are auditing a public or a nonpublic company.

The Audit Committee of the Board of Directors performs the audit and reports the results to shareholders and the Board of Directors.

Assertions are:

What is the purpose of a financial statement audit?

The AICPA (American Institute of Certified Public Accountants):

Errors in financial statements are:

The Board of Directors:

Shareholders use audit reports to monitor management performance. An example of an item that an audit report does NOT provide is:

The PCAOB was formed to meet one of the requirements in the Sarbanes-Oxley Act of 2002.

The audit engagement team:

Which of the following is NOT a "Big Four" firm?

The value of an integrated audit

Auditing is defined as a:

If management has presented the actual economic events and situation according to the accounting standards, then there is a high degree of correspondence between the underlying evidence and the resulting financial statements.

Who is responsible for the design and operation of ICFR?

Financial statements must be prepared:

The SEC requires publicly traded companies to file

An auditor's report on an integrated audit will be unqualified if internal control over financial reporting does not have any material weaknesses and the financial statements are fairly presented.

The organization of a typical CPA firm is similar to that of a corporation.

Overview of an Integrated Audit

The Auditors Role in Society

Legal Environment Affecting Audits Pt Iii Executing an Integrated Audit

Client Acceptance and Continuance and Preliminary Engagement Procedures

Audit Planning and Risk Assessment

Internal Control, Understanding the Clients Internal Control Over Financial Reporting and Auditing Design Effectiveness

Planning and Testing Operating Effectiveness of Internal Control Over Financial Reporting

Substantive Procedures and the Financial Statement Audit

Auditing Revenue Process: Sales, Billing and Collection in the Health-Care Provider and Retailing Industries

Completing the Integrated Audit and Reporting

The Acquisition and Payments Cycle and Related Accounts: Purchases, Cash Disbursements and Other Related Activities in the Automotive Industry

Auditing Human Resources Cycle Process: Personnel and Payroll in Service Industries

Auditing Inventory Processes: Tracking and Costing Products in the Land Development and Home Building Industry

Assets, Liabilities and Equity Related to the Financing Cycle

Topics Beyond the Integrated Audit

Filters

Exam 1: An Introduction to Auditing

Forensic auditors:

Auditors consider and examine ICFR for all of the same reasons, whether they are auditing a public or a nonpublic company.

The Audit Committee of the Board of Directors performs the audit and reports the results to shareholders and the Board of Directors.

Assertions are:

What is the purpose of a financial statement audit?

The AICPA (American Institute of Certified Public Accountants):

Errors in financial statements are:

The Board of Directors:

Shareholders use audit reports to monitor management performance. An example of an item that an audit report does NOT provide is:

The PCAOB was formed to meet one of the requirements in the Sarbanes-Oxley Act of 2002.

The audit engagement team:

Which of the following is NOT a "Big Four" firm?

The value of an integrated audit

Auditing is defined as a:

If management has presented the actual economic events and situation according to the accounting standards, then there is a high degree of correspondence between the underlying evidence and the resulting financial statements.

Who is responsible for the design and operation of ICFR?

Financial statements must be prepared:

The SEC requires publicly traded companies to file

An auditor's report on an integrated audit will be unqualified if internal control over financial reporting does not have any material weaknesses and the financial statements are fairly presented.

The organization of a typical CPA firm is similar to that of a corporation.

Overview of an Integrated Audit

The Auditors Role in Society

Legal Environment Affecting Audits Pt Iii Executing an Integrated Audit

Client Acceptance and Continuance and Preliminary Engagement Procedures

Audit Planning and Risk Assessment

Internal Control, Understanding the Clients Internal Control Over Financial Reporting and Auditing Design Effectiveness

Planning and Testing Operating Effectiveness of Internal Control Over Financial Reporting

Substantive Procedures and the Financial Statement Audit

Auditing Revenue Process: Sales, Billing and Collection in the Health-Care Provider and Retailing Industries

Completing the Integrated Audit and Reporting

The Acquisition and Payments Cycle and Related Accounts: Purchases, Cash Disbursements and Other Related Activities in the Automotive Industry

Auditing Human Resources Cycle Process: Personnel and Payroll in Service Industries

Auditing Inventory Processes: Tracking and Costing Products in the Land Development and Home Building Industry

Assets, Liabilities and Equity Related to the Financing Cycle

Topics Beyond the Integrated Audit

Filters