Question 1

The board that is similar to the FASB but provides rules for governmental entities is called:

Accepted Answer

A)  Securities and Exchange commission. 
B)  House Ethics committee. 
C)  Governmental Accounting Standards Board. 
D)  Governmental Board for Accounting Reporting.

Question 2

The FASB issues financial standards that are collectively known as:

Accepted Answer

A)  Financial Accounting Standards. 
B)  Internal Revenue Code. 
C)  Audit Review Standards. 
D)  Generally Accepted Accounting Principles.

Question 3

The effects of potentially bad financial statements being used by business stakeholders is called risk and is the fundamental reason why audits are performed.

Accepted Answer

A) True 
 B)False

Question 4

Who makes rules effecting the auditing profession?

Accepted Answer

A)  Public Company Accounting Oversight Board. 
B)  Governmental Standards Accounting Board. 
C)  Financial Accounting Standards Board. 
D)  All of the above.

Question 5

The auditor communicates his or her conclusions by issuing a(n)

Accepted Answer

A)  Auditors Statement. 
B)  Certificate of Assurance. 
C)  Audit Report. 
D)  White Paper of Findings.

Question 6

Information from third parties can never be used during an auditor's duty.

Accepted Answer

A) True 
 B)False

Question 7

Within the Scope paragraph of the audit report, the auditor provides __________ that the financial statements are free from material misstatements.

Accepted Answer

A)  Reasonable assurance. 
B)  Guaranteed assurance. 
C)  Auditing assurance. 
D)  Unqualified assurance.

Question 8

Which of the following is NOT an international board that effects the accounting profession?

Accepted Answer

A)  Financial Accounting Standards Board. 
B)  International Auditing and Assurance Standards Board. 
C)  The International Accounting Standards Board. 
D)  None of the above.

Question 9

Explain why there is a demand for auditing.

Accepted Answer

The answer of Explain why there is a demand for...

Question 10

An auditor may want to observe the physical count of inventory.

Accepted Answer

A) True 
 B)False

Exam 4: Fundamentals II: The Auditing Environment

The board that is similar to the FASB but provides rules for governmental entities is called:

The FASB issues financial standards that are collectively known as:

The effects of potentially bad financial statements being used by business stakeholders is called risk and is the fundamental reason why audits are performed.

Who makes rules effecting the auditing profession?

The auditor communicates his or her conclusions by issuing a(n)

Information from third parties can never be used during an auditor's duty.

Within the Scope paragraph of the audit report, the auditor provides __________ that the financial statements are free from material misstatements.

Which of the following is NOT an international board that effects the accounting profession?

Explain why there is a demand for auditing.

An auditor may want to observe the physical count of inventory.