Question 1

An auditor who is professionally skeptical will do which of the following?

Accepted Answer

A) Critically question contradictory audit evidence. 
B) Carefully evaluate the reliability of audit evidence,especially in situations in which fraud risk is high. 
C) Reasonably question the authenticity of documentation,while accepting that documents are to be considered genuine unless there is reason to believe the contrary. 
D) All of the above. 
A) Critically question contradictory audit evidence. 
B) Carefully evaluate the reliability of audit evidence,especially in situations in which fraud risk is high. 
C) Reasonably question the authenticity of documentation,while accepting that documents are to be considered genuine unless there is reason to believe the contrary. 
D) All of the above. D

Question 2

Auditors should conduct their work with an attitude of professional skepticism.

Accepted Answer

A) True 
 B)False  True

Question 3

According to the Financial Reporting Council (FRC),which of the following attributes contributes to the reliability and usefulness of audit reporting?

Accepted Answer

A) The audit methodology is well structured. 
B) Quality technical support is available when auditors require guidance. 
C) Auditors appropriately conclude as to the truth and fairness of the financial statements. 
D) The audit work is effectively reviewed. 
A) The audit methodology is well structured. 
B) Quality technical support is available when auditors require guidance. 
C) Auditors appropriately conclude as to the truth and fairness of the financial statements. 
D) The audit work is effectively reviewed. C

Question 4

According to the framework for professional decision making,the first step in decision-making is to structure the audit problem.

Accepted Answer

A) True 
 B)False

Question 5

The PCAOB provides the criteria against which the auditor measures the fairness of financial statement presentation.

Accepted Answer

A) True 
 B)False

Question 6

Rights theory focuses on evaluating actions in terms of the fundamental rights of the parties involved.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a correct statement regarding the Code of Ethics of the International Ethics Standards Board for Accountants (IESBA)?

Accepted Answer

A) The IESBA Code applies only to members in public practice. 
B) The five fundamental principles of the IESBA Code are identical to the AICPA's principles of professional conduct. 
C) The IESBA Code contains specific standards addressing many of the same issues addressed in the AICPA Code of Professional Conduct. 
D) All of the above statements are correct. 
A) The IESBA Code applies only to members in public practice. 
B) The five fundamental principles of the IESBA Code are identical to the AICPA's principles of professional conduct. 
C) The IESBA Code contains specific standards addressing many of the same issues addressed in the AICPA Code of Professional Conduct. 
D) All of the above statements are correct.

Question 8

Independence is required for which of the following types of services?

Accepted Answer

A) Audit work. 
B) Tax work. 
C) Consulting. 
D) Independence is always required of the CPA. 
A) Audit work. 
B) Tax work. 
C) Consulting. 
D) Independence is always required of the CPA.

Question 9

A financial statement audit is a systematic process of objectively obtaining and evaluating evidence.

Accepted Answer

A) True 
 B)False

Question 10

Professional and regulatory organizations Identify at least four professional or regulatory organizations that affect the auditing profession.Explain how and why they assist and/or monitor the auditing profession.

Accepted Answer

Public Company Accounting Oversight Boar

Question 11

Loans between the auditor and the client are permitted in some circumstances.

Accepted Answer

A) True 
 B)False

Question 12

International Standards on Auditing (ISAs)are set by which of the following organizations?

Accepted Answer

A) International Center for Audit Quality. 
B) International Auditing and Assurance Standards Board. 
C) American Institute of Certified Public Accountants 
D) All of the above organizations participate in setting ISAs. 
A) International Center for Audit Quality. 
B) International Auditing and Assurance Standards Board. 
C) American Institute of Certified Public Accountants 
D) All of the above organizations participate in setting ISAs.

Question 13

Though often relying on the FASB,the SEC has authority to establish GAAP for public companies.

Accepted Answer

A) True 
 B)False

Question 14

Auditing is the process of verifying the accuracy of the financial statements.

Accepted Answer

A) True 
 B)False

Question 15

A covered member's investment in a mutual fund that owns stock in a firm being audited by the covered member is a direct financial interest resulting in the impairment of independence.

Accepted Answer

A) True 
 B)False

Question 16

The need for independent assurance arises because the interests of the users of information may be different from the interests of those responsible for providing information.

Accepted Answer

A) True 
 B)False

Question 17

A covered member's independence would be impaired if an immediate family member was employed by the client company in any position.

Accepted Answer

A) True 
 B)False

Question 18

Both client acceptance decisions and client continuance decisions are based on an evaluation of relative risk and audit fees.

Accepted Answer

A) True 
 B)False

Question 19

Which term best describes a situation in which an individual is morally or ethically required to do something that conflicts with his or her immediate self-interest?

Accepted Answer

A) An ethical dilemma. 
B) An ethical problem. 
C) An ethical theory. 
D) None of the above. 
A) An ethical dilemma. 
B) An ethical problem. 
C) An ethical theory. 
D) None of the above.

Question 20

An auditor who has reservations about the effectiveness of a client company's internal controls would issue an adverse opinion on internal controls.

Accepted Answer

A) True 
 B)False

An auditor who is professionally skeptical will do which of the following?

Auditors should conduct their work with an attitude of professional skepticism.

According to the Financial Reporting Council (FRC),which of the following attributes contributes to the reliability and usefulness of audit reporting?

According to the framework for professional decision making,the first step in decision-making is to structure the audit problem.

The PCAOB provides the criteria against which the auditor measures the fairness of financial statement presentation.

Rights theory focuses on evaluating actions in terms of the fundamental rights of the parties involved.

Which of the following is a correct statement regarding the Code of Ethics of the International Ethics Standards Board for Accountants (IESBA)?

Independence is required for which of the following types of services?

A financial statement audit is a systematic process of objectively obtaining and evaluating evidence.

Professional and regulatory organizations Identify at least four professional or regulatory organizations that affect the auditing profession.Explain how and why they assist and/or monitor the auditing profession.

Loans between the auditor and the client are permitted in some circumstances.

International Standards on Auditing (ISAs)are set by which of the following organizations?

Though often relying on the FASB,the SEC has authority to establish GAAP for public companies.

Auditing is the process of verifying the accuracy of the financial statements.

A covered member's investment in a mutual fund that owns stock in a firm being audited by the covered member is a direct financial interest resulting in the impairment of independence.

The need for independent assurance arises because the interests of the users of information may be different from the interests of those responsible for providing information.

A covered member's independence would be impaired if an immediate family member was employed by the client company in any position.

Both client acceptance decisions and client continuance decisions are based on an evaluation of relative risk and audit fees.

Which term best describes a situation in which an individual is morally or ethically required to do something that conflicts with his or her immediate self-interest?

An auditor who has reservations about the effectiveness of a client company's internal controls would issue an adverse opinion on internal controls.

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditor

Professional Legal Liability

Professional Auditing Standards and the Audit Opinion Formulation Process

Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Long-Term Liabilities and Stockholders Equity Transactions

Completing a Quality Audit

Audit Reports

Filters

Exam 1: Quality Auditing: Why It Matters

An auditor who is professionally skeptical will do which of the following?

Auditors should conduct their work with an attitude of professional skepticism.

According to the Financial Reporting Council (FRC),which of the following attributes contributes to the reliability and usefulness of audit reporting?

According to the framework for professional decision making,the first step in decision-making is to structure the audit problem.

The PCAOB provides the criteria against which the auditor measures the fairness of financial statement presentation.

Rights theory focuses on evaluating actions in terms of the fundamental rights of the parties involved.

Which of the following is a correct statement regarding the Code of Ethics of the International Ethics Standards Board for Accountants (IESBA)?

Independence is required for which of the following types of services?

A financial statement audit is a systematic process of objectively obtaining and evaluating evidence.

Professional and regulatory organizations Identify at least four professional or regulatory organizations that affect the auditing profession.Explain how and why they assist and/or monitor the auditing profession.

Loans between the auditor and the client are permitted in some circumstances.

International Standards on Auditing (ISAs)are set by which of the following organizations?

Though often relying on the FASB,the SEC has authority to establish GAAP for public companies.

Auditing is the process of verifying the accuracy of the financial statements.

A covered member's investment in a mutual fund that owns stock in a firm being audited by the covered member is a direct financial interest resulting in the impairment of independence.

The need for independent assurance arises because the interests of the users of information may be different from the interests of those responsible for providing information.

A covered member's independence would be impaired if an immediate family member was employed by the client company in any position.

Both client acceptance decisions and client continuance decisions are based on an evaluation of relative risk and audit fees.

Which term best describes a situation in which an individual is morally or ethically required to do something that conflicts with his or her immediate self-interest?

An auditor who has reservations about the effectiveness of a client company's internal controls would issue an adverse opinion on internal controls.

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditor

Professional Legal Liability

Professional Auditing Standards and the Audit Opinion Formulation Process

Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Long-Term Liabilities and Stockholders Equity Transactions

Completing a Quality Audit

Audit Reports

Filters