Question 1

The SEC and PCOAB have independence requirements that apply only to auditors of public companies.

Accepted Answer

A) True 
 B)False

Question 2

Internal controls are the responsibility of management.

Accepted Answer

A) True 
 B)False

Question 3

The scope of the work to be done by the auditor on the audit is described in which document?

Accepted Answer

A) Contract letter. 
B) Engagement letter. 
C) Representation letter. 
D) Management letter. 
A) Contract letter. 
B) Engagement letter. 
C) Representation letter. 
D) Management letter.

Question 4

Independence is often referred to as the cornerstone of the auditing profession.

Accepted Answer

A) True 
 B)False

Question 5

To conduct an audit,what must an auditor do?

Accepted Answer

A) Comply with relevant ethical standards. 
B) Exercise perfect judgment. 
C) Obtain sufficient appropriate evidence to provide absolute assurance. 
D) All of the above. 
A) Comply with relevant ethical standards. 
B) Exercise perfect judgment. 
C) Obtain sufficient appropriate evidence to provide absolute assurance. 
D) All of the above.

Question 6

According to the framework for ethical decision making,which of the following should the decision maker consider?

Accepted Answer

A) All possible alternative courses of action. 
B) The consequences associated with possible actions. 
C) Whether the rights framework would cause any course of action to be added. 
D) All of the above. 
A) All possible alternative courses of action. 
B) The consequences associated with possible actions. 
C) Whether the rights framework would cause any course of action to be added. 
D) All of the above.

Question 7

What document communicates the conclusions of the financial statement audit?

Accepted Answer

A) The financial statements. 
B) Written management assertions. 
C) The audit report. 
D) None of the above. 
A) The financial statements. 
B) Written management assertions. 
C) The audit report. 
D) None of the above.

Question 8

Mark Pulley is an auditor at Pulley and Hurst,LLC.If Pulley's five-year-old daughter owns shares of stock in McBurgers Corporation,then what is Pulley considered to have?

Accepted Answer

A) An immaterial indirect financial interest in cc. 
B) A material indirect financial interest in the McBurgers Corporation. 
C) A loophole for claiming independence from McBurgers Corporation. 
D) A direct financial interest in McBurgers Corporation. 
A) An immaterial indirect financial interest in cc. 
B) A material indirect financial interest in the McBurgers Corporation. 
C) A loophole for claiming independence from McBurgers Corporation. 
D) A direct financial interest in McBurgers Corporation.

Question 9

Overview of Financial Statement Audit What is a financial statement audit,and what is the overall objective of the audit? What must the auditor do to accomplish this objective?

Accepted Answer

A financial statement audit has been def

Question 10

An Integrated Audit Report provides opinion(s)on which of the following?

Accepted Answer

A) The financial statements. 
B) Internal controls. 
C) Both financial statements and internal controls. 
D) Neither financial statements nor internal controls. 
A) The financial statements. 
B) Internal controls. 
C) Both financial statements and internal controls. 
D) Neither financial statements nor internal controls.

Question 11

What can users of the audit report reasonably expect from the audited financial statements?

Accepted Answer

A) The financial statements are complete and contain many of the important financial disclosures. 
B) The financial statements are presented fairly according to the substance of GAAP. 
C) The financial statements are free from all errors. 
D) All of the above. 
A) The financial statements are complete and contain many of the important financial disclosures. 
B) The financial statements are presented fairly according to the substance of GAAP. 
C) The financial statements are free from all errors. 
D) All of the above.

Question 12

The SEC has authority to establish GAAP for all business enterprises.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a principle of the Code of Ethics of the International Ethics Standards Board for Accountants but not a principle found in the AICPA Code of Professional Conduct?

Accepted Answer

A) Integrity 
B) Professional Behavior 
C) Confidentiality 
D) Objectivity 
A) Integrity 
B) Professional Behavior 
C) Confidentiality 
D) Objectivity

Question 14

Engagement letters issued to new clients do not specify the amount of audit fees to be charged because fees cannot be determined until the audit has been completed.

Accepted Answer

A) True 
 B)False

Question 15

An auditor may not disclose any confidential client information unless the auditor determines that disclosure is in the public interest.

Accepted Answer

A) True 
 B)False

Question 16

In which of the following situations would a CPA be considered independent?

Accepted Answer

A) A CPA's brother is the Vice-President of Sales at the CPA's audit client. 
B) A CPA's father was a salesman at the CPA's audit client,and now a major portion of the father's pension fund is invested in the audit client. 
C) A CPA's cousin works as a web-site designer at the audit client. 
D) A CPA's son works summers at the audit client and has earned 10 shares of stock in the audit client. 
A) A CPA's brother is the Vice-President of Sales at the CPA's audit client. 
B) A CPA's father was a salesman at the CPA's audit client,and now a major portion of the father's pension fund is invested in the audit client. 
C) A CPA's cousin works as a web-site designer at the audit client. 
D) A CPA's son works summers at the audit client and has earned 10 shares of stock in the audit client.

Question 17

Audit staff performing audit work must be appropriately supervised by partners and managers.

Accepted Answer

A) True 
 B)False

Question 18

Who is responsible for internal controls within an organization?

Accepted Answer

A) The internal auditor. 
B) The external auditor. 
C) Management. 
D) The PCAOB. 
A) The internal auditor. 
B) The external auditor. 
C) Management. 
D) The PCAOB.

Question 19

Which of the following is a driver of audit quality?

Accepted Answer

A) Audit firm culture. 
B) Engagement team skills and attributes. 
C) Factors outside control of auditors. 
D) All of the above. 
A) Audit firm culture. 
B) Engagement team skills and attributes. 
C) Factors outside control of auditors. 
D) All of the above.

Question 20

Some factors affecting audit quality are outside the direct control of the auditor,such as the amount of time allotted for completion of the audit.

Accepted Answer

A) True 
 B)False

The SEC and PCOAB have independence requirements that apply only to auditors of public companies.

Internal controls are the responsibility of management.

The scope of the work to be done by the auditor on the audit is described in which document?

Independence is often referred to as the cornerstone of the auditing profession.

To conduct an audit,what must an auditor do?

According to the framework for ethical decision making,which of the following should the decision maker consider?

What document communicates the conclusions of the financial statement audit?

Mark Pulley is an auditor at Pulley and Hurst,LLC.If Pulley's five-year-old daughter owns shares of stock in McBurgers Corporation,then what is Pulley considered to have?

Overview of Financial Statement Audit What is a financial statement audit,and what is the overall objective of the audit? What must the auditor do to accomplish this objective?

An Integrated Audit Report provides opinion(s)on which of the following?

What can users of the audit report reasonably expect from the audited financial statements?

The SEC has authority to establish GAAP for all business enterprises.

Which of the following is a principle of the Code of Ethics of the International Ethics Standards Board for Accountants but not a principle found in the AICPA Code of Professional Conduct?

Engagement letters issued to new clients do not specify the amount of audit fees to be charged because fees cannot be determined until the audit has been completed.

An auditor may not disclose any confidential client information unless the auditor determines that disclosure is in the public interest.

In which of the following situations would a CPA be considered independent?

Audit staff performing audit work must be appropriately supervised by partners and managers.

Who is responsible for internal controls within an organization?

Which of the following is a driver of audit quality?

Some factors affecting audit quality are outside the direct control of the auditor,such as the amount of time allotted for completion of the audit.

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

The SEC and PCOAB have independence requirements that apply only to auditors of public companies.

Internal controls are the responsibility of management.

The scope of the work to be done by the auditor on the audit is described in which document?

Independence is often referred to as the cornerstone of the auditing profession.

To conduct an audit,what must an auditor do?

According to the framework for ethical decision making,which of the following should the decision maker consider?

What document communicates the conclusions of the financial statement audit?

Mark Pulley is an auditor at Pulley and Hurst,LLC.If Pulley's five-year-old daughter owns shares of stock in McBurgers Corporation,then what is Pulley considered to have?

Overview of Financial Statement Audit What is a financial statement audit,and what is the overall objective of the audit? What must the auditor do to accomplish this objective?

An Integrated Audit Report provides opinion(s)on which of the following?

What can users of the audit report reasonably expect from the audited financial statements?

The SEC has authority to establish GAAP for all business enterprises.

Which of the following is a principle of the Code of Ethics of the International Ethics Standards Board for Accountants but not a principle found in the AICPA Code of Professional Conduct?

Engagement letters issued to new clients do not specify the amount of audit fees to be charged because fees cannot be determined until the audit has been completed.

An auditor may not disclose any confidential client information unless the auditor determines that disclosure is in the public interest.

In which of the following situations would a CPA be considered independent?

Audit staff performing audit work must be appropriately supervised by partners and managers.

Who is responsible for internal controls within an organization?

Which of the following is a driver of audit quality?

Some factors affecting audit quality are outside the direct control of the auditor,such as the amount of time allotted for completion of the audit.

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