Question 1

Internal auditing only provides assurance services to clients.

Accepted Answer

A) True 
 B)False  False

Question 2

Businesses that use independent auditors do not need the use of internal auditors.

Accepted Answer

A) True 
 B)False  False

Question 3

Attributes of assurance providers
Discuss the three or more attributes that an assurance professional must possess in order to maintain credibility.Explain the importance of these attributes to the assurance process.

Accepted Answer

1)
Subject Matter Knowle clge - The assurance provider must be at expert in the are of service provide Expertis e in a complex bocly of lnowledge sets the assurance professional apart from others.

2) Independence - The assurance provider must be unbiased, free from conflict of interest, objective and independent of the conpany receiving assurance services. This allows the profe ssional to remain neutral and free from influence by parties with a veste dintere st in the outcome of assurance services.

3) 
Agreed UponCriteria - Clear criteria must be av ailable for the assurance provider to me asure objectives and results against. In a financial statement assurance engagement, the criteria are represented by Generally Accepted Accounting Principles.

4) 
Process Expertise - Evidence is obt ained and evaluated churing the course of an assurance engagement. Profes sionals providing these servicesmust be able to draw accurate conclusions based upon the results of testing competent, sufficient evidence obtained.

Question 4

The degree of confidence that users place on management's financial statements is higher than that placed on audited financial statements because few users have direct knowledge of the company's operations and management is the most knowledgeable about operations.

Accepted Answer

A) True 
 B)False

Question 5

The need for assurance services
Identify three reasons for the rise of assurance services.

Accepted Answer

Three potential reasons for the rise of

Question 6

Assurance services may include which of the following?

Accepted Answer

A) attesting to financial statements 
B) examination of the economy and efficiency of governmental operations 
C) evaluation of a division's performance for management 
D) tax preparation services 
E) A,B,and C only 
A) attesting to financial statements 
B) examination of the economy and efficiency of governmental operations 
C) evaluation of a division's performance for management 
D) tax preparation services 
E) A,B,and C only

Question 7

A CPA automatically qualifies as an assurance provider in all areas of business.

Accepted Answer

A) True 
 B)False

Question 8

Which one of the following is not a critical component of assurance services?

Accepted Answer

A) a process on which service is provided 
B) an assurance service provider 
C) a user who derives value 
D) a CPA 
A) a process on which service is provided 
B) an assurance service provider 
C) a user who derives value 
D) a CPA

Question 9

The objective of an operational audit is to

Accepted Answer

A) evaluate whether laws have been broken by management. 
B) evaluate fairness of presentation of financial statements. 
C) evaluate compliances with company rules and regulations. 
D) evaluate the effectiveness and efficiency with which resources are employed. 
A) evaluate whether laws have been broken by management. 
B) evaluate fairness of presentation of financial statements. 
C) evaluate compliances with company rules and regulations. 
D) evaluate the effectiveness and efficiency with which resources are employed.

Question 10

The internal audit profession has emerged and has become active for all of the following reasons except:

Accepted Answer

A) management's need for an objective appraisal of organizational or departmental performance 
B) increased internal and external emphasis on effective procedures to detect or prevent fraud 
C) compliance with Section 404 of the Sarbanes-Oxley Act of 2002 
D) management's need to delegate the responsibility of the financial statements 
A) management's need for an objective appraisal of organizational or departmental performance 
B) increased internal and external emphasis on effective procedures to detect or prevent fraud 
C) compliance with Section 404 of the Sarbanes-Oxley Act of 2002 
D) management's need to delegate the responsibility of the financial statements

Question 11

Third-party users of the audit report expect the auditor to do all of the following except:

Accepted Answer

A) to evaluate measurements and disclosures made by management 
B) to provide a biased evaluation of the financial statements 
C) to determine whether financial statements are presented in accordance with GAAP 
D) to gather sufficient evidence to support their opinion 
A) to evaluate measurements and disclosures made by management 
B) to provide a biased evaluation of the financial statements 
C) to determine whether financial statements are presented in accordance with GAAP 
D) to gather sufficient evidence to support their opinion

Question 12

When the auditor has no reservations about management's financial statements,then the report issued is called a qualified report.

Accepted Answer

A) True 
 B)False

Question 13

Independence is only required for assurance service providers.

Accepted Answer

A) True 
 B)False

Question 14

The audit committee of the board of directors of a company is responsible for

Accepted Answer

A) hiring the auditor. 
B) preparing the financial statements. 
C) the audit workpapers. 
D) independence and obtaining evidence. 
A) hiring the auditor. 
B) preparing the financial statements. 
C) the audit workpapers. 
D) independence and obtaining evidence.

Question 15

The primary governing board that performs quality reviews on registered CPA firms that audit public companies is the

Accepted Answer

A) PCAOB 
B) GAO 
C) AICPA 
D) FASB 
A) PCAOB 
B) GAO 
C) AICPA 
D) FASB

Question 16

Governmental audit standards are developed by the Public Company Accounting Oversight Board.

Accepted Answer

A) True 
 B)False

Question 17

The public expects auditors to

Accepted Answer

A) understand and enforce principles that best portray the spirit of FASB concepts. 
B) be neutral to preparers and users of financial information. 
C) recognize that the public are the primary users of audit services. 
D) take more responsibility for the discovery of fraud. 
E) all of the above are expectations of the public. 
A) understand and enforce principles that best portray the spirit of FASB concepts. 
B) be neutral to preparers and users of financial information. 
C) recognize that the public are the primary users of audit services. 
D) take more responsibility for the discovery of fraud. 
E) all of the above are expectations of the public.

Question 18

Congress authorized which of the following organizations to establish generally accepted accounting principles for public companies?

Accepted Answer

A) SEC 
B) APB 
C) AICPA 
D) FASB 
A) SEC 
B) APB 
C) AICPA 
D) FASB

Question 19

Auditing primarily exists because users need unbiased information on which to assess management performance and make economic decisions.

Accepted Answer

A) True 
 B)False

Question 20

CPAs are licensed by the

Accepted Answer

A) PCAOB. 
B) AICPA. 
C) state's board of accountancy. 
D) state's society of CPAs. 
A) PCAOB. 
B) AICPA. 
C) state's board of accountancy. 
D) state's society of CPAs.

Internal auditing only provides assurance services to clients.

Businesses that use independent auditors do not need the use of internal auditors.

Attributes of assurance providers Discuss the three or more attributes that an assurance professional must possess in order to maintain credibility.Explain the importance of these attributes to the assurance process.

The degree of confidence that users place on management's financial statements is higher than that placed on audited financial statements because few users have direct knowledge of the company's operations and management is the most knowledgeable about operations.

The need for assurance services Identify three reasons for the rise of assurance services.

Assurance services may include which of the following?

A CPA automatically qualifies as an assurance provider in all areas of business.

Which one of the following is not a critical component of assurance services?

The objective of an operational audit is to

The internal audit profession has emerged and has become active for all of the following reasons except:

Third-party users of the audit report expect the auditor to do all of the following except:

When the auditor has no reservations about management's financial statements,then the report issued is called a qualified report.

Independence is only required for assurance service providers.

The audit committee of the board of directors of a company is responsible for

The primary governing board that performs quality reviews on registered CPA firms that audit public companies is the

Governmental audit standards are developed by the Public Company Accounting Oversight Board.

The public expects auditors to

Congress authorized which of the following organizations to establish generally accepted accounting principles for public companies?

Auditing primarily exists because users need unbiased information on which to assess management performance and make economic decisions.

CPAs are licensed by the

Corporate Governance and Audits

Judgmental and Ethical Decision-Making Frameworks and Associated Professional Standards

Audit Risk,business Risk,and Audit Planning

Internal Control Over Financial Reporting

Performing an Integrated Audit

A Framework for Audit Evidence

Tools Used in Gathering Audit Evidence

Auditing for Fraud

Auditing Revenue and Related Accounts

Audit of Acquisition and Payment Cycle and Inventory

Audit of Cash and Other Liquid Assets

Audit of Long-Lived Assets and Related Expense Accounts

Audit of Longer-Term Liabilities, equity, acquisitions, and Related-Entity Transactions, long-Term Liabilities, and Equity

Ensuring Audit Quality in Completing the Audit

Auditors Reports

Professional Liability

Advanced Topics Concerning Complex Audit Judgments

Filters

Exam 1: Auditing: Integral to the Economy

Internal auditing only provides assurance services to clients.

Businesses that use independent auditors do not need the use of internal auditors.

Attributes of assurance providers Discuss the three or more attributes that an assurance professional must possess in order to maintain credibility.Explain the importance of these attributes to the assurance process.

The degree of confidence that users place on management's financial statements is higher than that placed on audited financial statements because few users have direct knowledge of the company's operations and management is the most knowledgeable about operations.

The need for assurance services Identify three reasons for the rise of assurance services.

Assurance services may include which of the following?

A CPA automatically qualifies as an assurance provider in all areas of business.

Which one of the following is not a critical component of assurance services?

The objective of an operational audit is to

The internal audit profession has emerged and has become active for all of the following reasons except:

Third-party users of the audit report expect the auditor to do all of the following except:

When the auditor has no reservations about management's financial statements,then the report issued is called a qualified report.

Independence is only required for assurance service providers.

The audit committee of the board of directors of a company is responsible for

The primary governing board that performs quality reviews on registered CPA firms that audit public companies is the

Governmental audit standards are developed by the Public Company Accounting Oversight Board.

The public expects auditors to

Congress authorized which of the following organizations to establish generally accepted accounting principles for public companies?

Auditing primarily exists because users need unbiased information on which to assess management performance and make economic decisions.

CPAs are licensed by the

Corporate Governance and Audits

Judgmental and Ethical Decision-Making Frameworks and Associated Professional Standards

Audit Risk,business Risk,and Audit Planning

Internal Control Over Financial Reporting

Performing an Integrated Audit

A Framework for Audit Evidence

Tools Used in Gathering Audit Evidence

Auditing for Fraud

Auditing Revenue and Related Accounts

Audit of Acquisition and Payment Cycle and Inventory

Audit of Cash and Other Liquid Assets

Audit of Long-Lived Assets and Related Expense Accounts

Audit of Longer-Term Liabilities, equity, acquisitions, and Related-Entity Transactions, long-Term Liabilities, and Equity

Ensuring Audit Quality in Completing the Audit

Auditors Reports

Professional Liability

Advanced Topics Concerning Complex Audit Judgments

Filters