Question 1

According to the Financial Reporting Council (FRC),when is the culture of an audit firm likely to provide a positive contribution to audit quality?

Accepted Answer

A) When the leadership of the audit firm ensures partners and other staff have sufficient time and resources to deal with difficult issues as they arise. 
B) When the leadership of the audit firm ensures robust systems for client acceptance and continuation based on the likelihood of increased audit fees. 
C) When the leadership of the audit firm creates an environment where achieving efficiency is valued,invested in and rewarded. 
D) When the leadership of the audit firm ensures financial considerations drive actions. 
A) When the leadership of the audit firm ensures partners and other staff have sufficient time and resources to deal with difficult issues as they arise. 
B) When the leadership of the audit firm ensures robust systems for client acceptance and continuation based on the likelihood of increased audit fees. 
C) When the leadership of the audit firm creates an environment where achieving efficiency is valued,invested in and rewarded. 
D) When the leadership of the audit firm ensures financial considerations drive actions.

Question 2

Specific rules of conduct contained in the AICPA Code of Professional Conduct and related interpretations of those rules cover many,but not all,relationships and circumstances that an auditor may encounter.

Accepted Answer

A) True 
 B)False

Question 3

An individual does not need to agree to uphold the AICPA's Code of Professional Conduct in order to become licensed as a CPA.

Accepted Answer

A) True 
 B)False

Question 4

Users of audited financial statements include a company's bondholders but not its stockholders,who are the owners of the company.

Accepted Answer

A) True 
 B)False

Question 5

The SEC and PCAOB independence rules for auditors are identical to those of the AICPA.

Accepted Answer

A) True 
 B)False

Question 6

When an auditor identifies threats to compliance with the rules of conduct,the auditor must demonstrate that safeguards were applied that totally eliminated the threat.

Accepted Answer

A) True 
 B)False

Question 7

Julie Webb,CPA takes out an automobile loan with First National Bank of Wellville (FNBW)while attending the University of Wellville.Julie graduates one year later and is hired as an auditor by Best and Driftwood,LLP.Her first assigned audit engagement is with First National Bank of Wellville,a client of Best and Driftwood.As a new audit assistant,Julie continues to pay her automobile loan payments each month.According to the AICPA,why is Julie is considered a covered member for FNBW independence purposes?

Accepted Answer

A) She will be working on the engagement. 
B) She has a direct financial interest in FNBW. 
C) She graduated in the same area as the client is operating. 
D) She has an immaterial direct financial interest in FNBW. 
A) She will be working on the engagement. 
B) She has a direct financial interest in FNBW. 
C) She graduated in the same area as the client is operating. 
D) She has an immaterial direct financial interest in FNBW.

Question 8

There is a hierarchy of rights to consider when applying rights theory.

Accepted Answer

A) True 
 B)False

Question 9

The PCAOB requires disclosure of the names of engagement partners for all public company audits.

Accepted Answer

A) True 
 B)False

According to the Financial Reporting Council (FRC),when is the culture of an audit firm likely to provide a positive contribution to audit quality?

Specific rules of conduct contained in the AICPA Code of Professional Conduct and related interpretations of those rules cover many,but not all,relationships and circumstances that an auditor may encounter.

An individual does not need to agree to uphold the AICPA's Code of Professional Conduct in order to become licensed as a CPA.

Users of audited financial statements include a company's bondholders but not its stockholders,who are the owners of the company.

The SEC and PCAOB independence rules for auditors are identical to those of the AICPA.

When an auditor identifies threats to compliance with the rules of conduct,the auditor must demonstrate that safeguards were applied that totally eliminated the threat.

There is a hierarchy of rights to consider when applying rights theory.

The PCAOB requires disclosure of the names of engagement partners for all public company audits.

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

According to the Financial Reporting Council (FRC),when is the culture of an audit firm likely to provide a positive contribution to audit quality?

Specific rules of conduct contained in the AICPA Code of Professional Conduct and related interpretations of those rules cover many,but not all,relationships and circumstances that an auditor may encounter.

An individual does not need to agree to uphold the AICPA's Code of Professional Conduct in order to become licensed as a CPA.

Users of audited financial statements include a company's bondholders but not its stockholders,who are the owners of the company.

The SEC and PCAOB independence rules for auditors are identical to those of the AICPA.

When an auditor identifies threats to compliance with the rules of conduct,the auditor must demonstrate that safeguards were applied that totally eliminated the threat.

There is a hierarchy of rights to consider when applying rights theory.

The PCAOB requires disclosure of the names of engagement partners for all public company audits.

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