Question 1

An auditor is not permitted to contact the predecessor auditor when considering a prospective new client.

Accepted Answer

A) True 
 B)False

Question 2

The auditor is permitted to violate the confidentiality rule in providing relevant information to an inquiry by a major shareholder of the client.

Accepted Answer

A) True 
 B)False

Question 3

Auditors of public companies have additional requirements that extend beyond those of the AICPA.Which of the following is not one of those additional requirements?

Accepted Answer

A) Preapproval of audit services and permissible nonaudit services by the client's audit committee. 
B) Disclosure by the client of all fees paid to its auditors for audit,audit-related,tax,and other services. 
C) Changing audit firms every seven years with a two-year cooling off period. 
D) Rotating lead audit partners every five years with a five-year cooling off period. 
A) Preapproval of audit services and permissible nonaudit services by the client's audit committee. 
B) Disclosure by the client of all fees paid to its auditors for audit,audit-related,tax,and other services. 
C) Changing audit firms every seven years with a two-year cooling off period. 
D) Rotating lead audit partners every five years with a five-year cooling off period.

Question 4

Rule 102 on integrity and objectivity applies only to covered members as defined by the AICPA.

Accepted Answer

A) True 
 B)False

Question 5

Auditors are permitted to perform for a contingent fee an audit of the financial statements if the audit committee approves the agreement in advance of the services being provided.

Accepted Answer

A) True 
 B)False

Question 6

An integrated audit requires the auditor to assess the effectiveness of internal controls.

Accepted Answer

A) True 
 B)False

Question 7

A covered member may not have a direct financial interest in an audit client if the interest is material.

Accepted Answer

A) True 
 B)False

Question 8

The audit committee oversees both the internal and external auditors.

Accepted Answer

A) True 
 B)False

Question 9

To ensure audit quality,audits of public companies must be performed by multinational accounting firms.

Accepted Answer

A) True 
 B)False

Question 10

The Center for Audit Quality is dedicated to enhancing investor confidence in what?

Accepted Answer

A) The global capital markets. 
B) Management. 
C) Auditors. 
D) All of the above. 
A) The global capital markets. 
B) Management. 
C) Auditors. 
D) All of the above.

Question 11

Under Rule 201,what best describes how an AIPCA member should act?

Accepted Answer

A) With professional competence. 
B) With due professional care. 
C) With adequate planning and with appropriate supervision. 
D) All of the above 
A) With professional competence. 
B) With due professional care. 
C) With adequate planning and with appropriate supervision. 
D) All of the above

Question 12

If the auditor has no reservations about management's financial statements,then the auditor will issue a qualified opinion.

Accepted Answer

A) True 
 B)False

Question 13

Which of following is not part of the ethical framework derived from utilitarianism and rights theories?

Accepted Answer

A) Determination of relevant legal issues. 
B) Determination of affected parties and their rights. 
C) Determination of the most important rights. 
D) Development of alternative courses of action. 
A) Determination of relevant legal issues. 
B) Determination of affected parties and their rights. 
C) Determination of the most important rights. 
D) Development of alternative courses of action.

Question 14

An AICPA member who is not in public practice is not subject to any of the Principles of Professional Conduct.

Accepted Answer

A) True 
 B)False

Question 15

Professional Decision Making To achieve audit quality,auditors must make quality decisions throughout the audit process.What are the characteristics of quality audit decisions?

Accepted Answer

Quality decisions by auditors are unbias

Question 16

Users rely on the auditors' independent assessment of financial statement presentation because few users have direct knowledge of the company's operations.

Accepted Answer

A) True 
 B)False

Question 17

A contingency fee is a situation in which no fee will be charged unless a specified finding or result is attained.

Accepted Answer

A) True 
 B)False

Question 18

Audit Quality What is audit quality?

Accepted Answer

A definition published by the GAO (2003)

Question 19

A key responsibility of the internal audit function is to provide assurance on the reliability of financial information reported to external users of audited financial statements.

Accepted Answer

A) True 
 B)False

Question 20

What is the term used to describe a systematic process of objectively obtaining evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users?

Accepted Answer

A) Internal audit. 
B) Financial statement audit. 
C) External audit. 
D) Program audit 
A) Internal audit. 
B) Financial statement audit. 
C) External audit. 
D) Program audit

An auditor is not permitted to contact the predecessor auditor when considering a prospective new client.

The auditor is permitted to violate the confidentiality rule in providing relevant information to an inquiry by a major shareholder of the client.

Auditors of public companies have additional requirements that extend beyond those of the AICPA.Which of the following is not one of those additional requirements?

Rule 102 on integrity and objectivity applies only to covered members as defined by the AICPA.

Auditors are permitted to perform for a contingent fee an audit of the financial statements if the audit committee approves the agreement in advance of the services being provided.

An integrated audit requires the auditor to assess the effectiveness of internal controls.

A covered member may not have a direct financial interest in an audit client if the interest is material.

The audit committee oversees both the internal and external auditors.

To ensure audit quality,audits of public companies must be performed by multinational accounting firms.

The Center for Audit Quality is dedicated to enhancing investor confidence in what?

Under Rule 201,what best describes how an AIPCA member should act?

If the auditor has no reservations about management's financial statements,then the auditor will issue a qualified opinion.

Which of following is not part of the ethical framework derived from utilitarianism and rights theories?

An AICPA member who is not in public practice is not subject to any of the Principles of Professional Conduct.

Professional Decision Making To achieve audit quality,auditors must make quality decisions throughout the audit process.What are the characteristics of quality audit decisions?

Users rely on the auditors' independent assessment of financial statement presentation because few users have direct knowledge of the company's operations.

A contingency fee is a situation in which no fee will be charged unless a specified finding or result is attained.

Audit Quality What is audit quality?

A key responsibility of the internal audit function is to provide assurance on the reliability of financial information reported to external users of audited financial statements.

What is the term used to describe a systematic process of objectively obtaining evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users?

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 is not permitted to contact the predecessor auditor when considering a prospective new client.

The auditor is permitted to violate the confidentiality rule in providing relevant information to an inquiry by a major shareholder of the client.

Auditors of public companies have additional requirements that extend beyond those of the AICPA.Which of the following is not one of those additional requirements?

Rule 102 on integrity and objectivity applies only to covered members as defined by the AICPA.

Auditors are permitted to perform for a contingent fee an audit of the financial statements if the audit committee approves the agreement in advance of the services being provided.

An integrated audit requires the auditor to assess the effectiveness of internal controls.

A covered member may not have a direct financial interest in an audit client if the interest is material.

The audit committee oversees both the internal and external auditors.

To ensure audit quality,audits of public companies must be performed by multinational accounting firms.

The Center for Audit Quality is dedicated to enhancing investor confidence in what?

Under Rule 201,what best describes how an AIPCA member should act?

If the auditor has no reservations about management's financial statements,then the auditor will issue a qualified opinion.

Which of following is not part of the ethical framework derived from utilitarianism and rights theories?

An AICPA member who is not in public practice is not subject to any of the Principles of Professional Conduct.

Professional Decision Making To achieve audit quality,auditors must make quality decisions throughout the audit process.What are the characteristics of quality audit decisions?

Users rely on the auditors' independent assessment of financial statement presentation because few users have direct knowledge of the company's operations.

A contingency fee is a situation in which no fee will be charged unless a specified finding or result is attained.

Audit Quality What is audit quality?

A key responsibility of the internal audit function is to provide assurance on the reliability of financial information reported to external users of audited financial statements.

What is the term used to describe a systematic process of objectively obtaining evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users?

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