Question 1

The serially-numbered pronouncements issued by the Auditing Standards Board over a period of years are known as:

Accepted Answer

A)  Auditing Statements of Position (ASPs) .
B)  Accounting Series Releases (ASRs) .
C)  Statements on Auditing Standards (SASs) .
D)  Statements on Auditing Principles (SAPs) .E) None of the above
F) A) and C)

Question 2

Independent audits of today place more emphasis on sampling than did the audits of the 19th century.

Accepted Answer

A) True 
 B)False

Question 3

An annual peer review is a requirement of the AICPA.

Accepted Answer

A) True 
 B)False

Question 4

Operational auditing is primarily oriented toward:

Accepted Answer

A)  Future improvements to accomplish the goals of management.
B)  The accuracy of data reflected in management's financial records.
C)  The verification that a company's financial statements are fairly presented.
D)  Past protection provided by existing internal control.E) A) and B)
F) A) and C)

Question 5

The risk that a company will not be able to meet its obligations when they become due is an aspect of:

Accepted Answer

A)  Information risk.
B)  Inherent risk.
C)  Relative risk.
D)  Business risk.E) A) and B)
F) All of the above

Question 6

Match between columns
                        Premises: Government Accounting Standards Board. 
State Boards of Accountancy. 
Financial Accounting Standards Board. 
American Institute of Certified Public Accountants. 
Public Company Accounting Oversight Board. 
Federal Accounting Standards Advisory Board.

Accepted Answer

The Answer of Issue CPA certificates and Develop accounting standards is...

Question 7

The American Institute of Certified Public Accountants has the primary authority to establish accounting standards.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following attributes most clearly differentiates a CPA who audits management's financial statements as contrasted to management?

Accepted Answer

A)  Integrity.
B)  Competence.
C)  Independence.
D)  Keeping informed on current professional developments.E) A) and C)
F) A) and B)

Question 9

The Statements on Auditing Standards have been issued by the:

Accepted Answer

A)  Auditing Standards Board.
B)  Financial Accounting Standards Board.
C)  Securities and Exchange Commission.
D)  Federal Bureau of Investigation.E) All of the above
F) A) and B)

Question 10

An integrated audit performed under the Sarbanes-Oxley Act requires that auditors report on:
   Financial Statements Internal Control A.  Yes  Yes  B.  Yes  No  C.  No  Yes  D.  No  No \begin{array} { c} & 	ext { Financial Statements} & 	ext { Internal Control} \	ext { A. } & 	ext { Yes } & 	ext { Yes } \	ext { B. } & 	ext { Yes } & 	ext { No } \	ext { C. } & 	ext { No } & 	ext { Yes } \	ext { D. } & 	ext { No } & 	ext { No }\end{array} A.  B.  C.  D. ​ Financial Statements Yes  Yes  No  No ​ Internal Control Yes  No  Yes  No ​

Accepted Answer

A)  Option A
B)  Option B
C)  Option C
D)  Option D E) A) and C)
F) A) and D)

Question 11

The risk that information is misstated is referred to as:

Accepted Answer

A)  Information risk.
B)  Inherent risk.
C)  Relative risk.
D)  Business risk.E) All of the above
F) C) and D)

Question 12

Which of the following is not correct relating to the Sarbanes-Oxley Act?

Accepted Answer

A)  It toughens penalties for corporate fraud.
B)  It restricts the types of consulting CPAs may perform for audit clients.
C)  It created the Public Company Accounting Oversight Board (PCAO
B)   as a replacement for the Financial Accounting Standards Board.
D)  It eliminates a significant portion of the accounting profession's system of self-regulation.E) A) and D)
F) A) and C)

Question 13

An operational audit differs in many ways from an audit of financial statements.Which of the following is the best example of one of these differences?

Accepted Answer

A)  The usual audit of financial statements covers the four basic statements, whereas the operational audit is usually limited to either the balance sheet or the income statement.
B)  The boundaries of an operational audit are often drawn from an organization chart and are not limited to a single accounting period.
C)  Operational audits do not ordinarily result in the preparation of a report.
D)  The operational audit deals with pre-tax income.E) C) and D)
F) A) and D)

Question 14

An engagement in which a CPA firm arranges for a critical review of its practices by another CPA firm is referred to as a(n) :

Accepted Answer

A)  Peer Review Engagement.
B)  Quality Control Engagement.
C)  Quality Assurance Engagement.
D)  Attestation Engagement.E) None of the above
F) B) and D)

Question 15

The organization charged with protecting investors and the public by requiring full disclosure of financial information by companies offering securities to the public is the:

Accepted Answer

A)  Auditing Standards Board.
B)  Financial Accounting Standards Board.
C)  Government Accounting Standards Boards.
D)  Securities and Exchange Commission.E) B) and D)
F) B) and C)

Question 16

Which of the following types of services is generally provided only by CPA firms?

Accepted Answer

A)  Tax audits.
B)  Financial statement audits.
C)  Compliance audits.
D)  Operational audits.E) A) and B)
F) C) and D)

Question 17

Which of the following are issued by the Securities and Exchange Commission?

Accepted Answer

A)  Accounting Research Studies.
B)  Accounting Trends and Techniques.
C)  Industry Audit Guides.
D)  Financial Reporting Releases.E) B) and C)
F) A) and D)

Question 18

An investor is considering investing in one of two companies.The companies have very similar reported financial position and results of operations.However,only one of the companies has its financial statements audited.
a.Describe what creates the demand for an audit in this situation.Include a discussion of how audited financial statements facilitate this investment transaction,and the effect of the audit on business risk and information risk.
b.Identify the potential consequences to the company of not having its financial statements audited.

Accepted Answer

a.Audits add credibility to the financia...

Question 19

Staff assistants in CPA firms generally are responsible for planning and coordinating audit engagements.

Accepted Answer

A) True 
 B)False

Question 20

The SEC does not pass on the merits of the securities that are registered with the agency.

Accepted Answer

A) True 
 B)False

Exam 1: The Role of the Public Accountant in the American Economy

The SEC does not pass on the merits of the securities that are registered with the agency.

Correct Answer
verified

Independent audits of today place more emphasis on sampling than did the audits of the 19^th century.

Correct Answer
verified

Which of the following types of services is generally provided only by CPA firms?

Correct Answer
verified

The Statements on Auditing Standards have been issued by the:

Correct Answer
verified

The organization charged with protecting investors and the public by requiring full disclosure of financial information by companies offering securities to the public is the:

Correct Answer
verified

Correct Answer
verified
a.Audits add credibility to the financia...
View Answer

The American Institute of Certified Public Accountants has the primary authority to establish accounting standards.

Correct Answer
verified

Which of the following attributes most clearly differentiates a CPA who audits management's financial statements as contrasted to management?

Correct Answer
verified

An operational audit differs in many ways from an audit of financial statements.Which of the following is the best example of one of these differences?

Correct Answer
verified

Operational auditing is primarily oriented toward:

Correct Answer
verified

Correct Answer
verified

Staff assistants in CPA firms generally are responsible for planning and coordinating audit engagements.

Correct Answer
verified

An annual peer review is a requirement of the AICPA.

Correct Answer
verified

The risk that information is misstated is referred to as:

Correct Answer
verified

An engagement in which a CPA firm arranges for a critical review of its practices by another CPA firm is referred to as a(n) :

Correct Answer
verified

Which of the following is not correct relating to the Sarbanes-Oxley Act?

Correct Answer
verified

Which of the following are issued by the Securities and Exchange Commission?

Correct Answer
verified

Accountants are regulated by a variety of organizations.Match the following statements with the most directly related organizations.Organizations may be used once or not at all.

The serially-numbered pronouncements issued by the Auditing Standards Board over a period of years are known as:

Correct Answer
verified

The risk that a company will not be able to meet its obligations when they become due is an aspect of:

Correct Answer
verified

Exam 1: The Role of the Public Accountant in the American Economy

The SEC does not pass on the merits of the securities that are registered with the agency.

Correct AnswerverifiedShow Answer

Independent audits of today place more emphasis on sampling than did the audits of the 19th century.

Correct AnswerverifiedShow Answer

Which of the following types of services is generally provided only by CPA firms?

Correct AnswerverifiedShow Answer

The Statements on Auditing Standards have been issued by the:

Correct AnswerverifiedShow Answer

The organization charged with protecting investors and the public by requiring full disclosure of financial information by companies offering securities to the public is the:

Correct AnswerverifiedShow Answer

Correct Answerverifieda.Audits add credibility to the financia...View AnswerShow Answer

The American Institute of Certified Public Accountants has the primary authority to establish accounting standards.

Correct AnswerverifiedShow Answer

Which of the following attributes most clearly differentiates a CPA who audits management's financial statements as contrasted to management?

Correct AnswerverifiedShow Answer

An operational audit differs in many ways from an audit of financial statements.Which of the following is the best example of one of these differences?

Correct AnswerverifiedShow Answer

Operational auditing is primarily oriented toward:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Staff assistants in CPA firms generally are responsible for planning and coordinating audit engagements.

Correct AnswerverifiedShow Answer

An annual peer review is a requirement of the AICPA.

Correct AnswerverifiedShow Answer

The risk that information is misstated is referred to as:

Correct AnswerverifiedShow Answer

An engagement in which a CPA firm arranges for a critical review of its practices by another CPA firm is referred to as a(n) :

Correct AnswerverifiedShow Answer

Which of the following is not correct relating to the Sarbanes-Oxley Act?

Correct AnswerverifiedShow Answer

Which of the following are issued by the Securities and Exchange Commission?

Correct AnswerverifiedShow Answer

Accountants are regulated by a variety of organizations.Match the following statements with the most directly related organizations.Organizations may be used once or not at all.

The serially-numbered pronouncements issued by the Auditing Standards Board over a period of years are known as:

Correct AnswerverifiedShow Answer

The risk that a company will not be able to meet its obligations when they become due is an aspect of:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Independent audits of today place more emphasis on sampling than did the audits of the 19^th century.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a.Audits add credibility to the financia...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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