Which of the following is a principle underlying audit conducted in accordance with generally accepted auditing standards? Show
A. B. C. D. Which of the following is a principle underlying an audit conducted in accordance with generally accepted auditing standards? B. The audit report expresses an opinion on whether the financial statements are free of material and immaterial misstatement. C. Auditors are responsible for, among other things, maintaining professional objectivism, exercising professional engagement, and obtaining appropriate documentation. D. An auditor's opinion enhances the degree of confidence that intended users can place in the financial statements. 11. Audits of financial statements are designed to obtain reasonable assurance of detecting misstatement due to: Fraudulent Financial Reporting: Yes, Yes, No, No A. Option A A. Option A: Yes, Yes 12. Financial statements are prepared following a(an) A. Applicable financial reporting framework. 13. An attestation engagement: B. Includes a report on subject matter, or on an assertion about subject matter. 14. An audit provides reasonable assurance of detecting which of the following types of material illegal acts? Direct Effect: Yes, Yes, No, No A. Option A B. Option B: Yes, No 15. Which of the following is not a type of auditors' opinion? B. Ordinary. 16. Which of the following is one of the elements of AICPA quality control? C. Engagement performance. 17. A procedure in which a quality control partner periodically tests the application of quality control procedures is most directly related to which quality control element? D. Monitoring. 18. Requirements for training, independence and due professional care are included in which group of the generally accepted auditing standards of the PCAOB? B. General. 19. Which of the following is a principle underlying an audit conducted in
accordance with generally accepted auditing standards? D. An auditor's opinion enhances the degree of confidence that intended users can place in the financial statements. 20. A set of criteria used to determine measurement, recognition, representation, and disclosure of all material items appearing in the financial statements is referred to as a(n) A. Financial reporting framework. 21. An audit should be designed to obtain reasonable assurance of detecting material misstatements due to: C. Errors, fraud, and noncompliance with laws with a direct effect on financial statement amounts. 22. Which of the following is accurate, as indicated in the principles underlying an audit? B. An auditor is unable to obtain absolute assurance that the financial statements are free from material misstatement. 23. Which of the following is not an underlying premise of an audit? B. Management and the auditors have responsibility for the preparation of financial statements in accordance with the applicable financial reporting framework. 24. By definition, proper professional skepticism on an audit requires Questioning Mind: No, No, Yes, Yes A. Option A C. Option C: Yes, No 25. When a Statement Auditing Standards uses the word "should" relating to a requirement, it means that the auditor: B. Must comply with requirements unless the auditor demonstrates and documents that alternative actions are sufficient to achieve the objectives of the standards. 26. An unconditional responsibility to follow an AICPA professional standard exists when the professional standard uses the term(s) Must: Yes, Yes, No, No A. Option A B. Option B: Yes, No 27. Which of the following best describes a portion of the auditors' responsibility regarding noncompliance with laws by clients? B. If audit procedures reveal noncompliance, the auditors should take appropriate actions. 28. The auditors who find that the client has committed an illegal act would be most likely to withdraw from the engagement when the: A. Management fails to take appropriate corrective action. 29. Which of the following is not included as a part of the description of the auditor's responsibility in a nonpublic company unmodified report? A. The audit was performed in accordance with generally accepted accounting principles. 30. Primary responsibility for the financial statements lies with: Auditors: Yes, Yes, No, No A. Option A C. Option C: No, Yes 31. Which of the following is explicitly included as a part of the description of management's responsibility in an unmodified audit
report? C. Management is responsible for the design, implementation, and maintenance of internal control. 32. The auditors' report for a nonpublic company should indicate: A. That the audit was made in accordance with auditing standards generally accepted in the United States of America. 33. The Auditing Standards Board's guidance on matters such as the purpose of an audit, the premise of an audit, and auditor personal responsibilities is included in: D. Principles Underlying an Audit Conducted in Accordance with GAAS. 34. A requirement that working papers be reviewed by the supervisor, and any deficiencies be discussed with the preparer is an example of a quality control procedure in the area of: B. Engagement performance. 35. A requirement to design recruitment processes and procedures to help the firm select individuals meeting minimum academic requirements established by the firm is an example of a quality control procedure in the area of: C. Human resources. 36. The body that issues international pronouncements providing auditing procedural and reporting guidance is the: C. International Auditing and Assurance Standards Board. 37. To present fairly in conformity with generally accepted accounting principles the financial statements must: C. Reflect transactions and events within a range of reasonable limits. 38. Which of the following is not included in the auditors' standard unmodified audit report? D. Accounting principles have been consistently applied. 39. An audit performed in accordance with generally accepted auditing standards generally should: D. Not be relied upon to provide absolute assurance that all noncompliance with laws will be detected. 40. When the auditors express an opinion on financial statements their
responsibilities extend to: B. Whether the results of their client's operating decisions are fairly presented in the financial statements. 41. Authoritative GAAP sources include: FASB Concepts Statements: Yes, Yes, No, No A. Option A C. Option C: No, Yes 42. An investor reading the financial statements of The Sundby Corporation observes that the statements are accompanied by an unmodified
auditors' report. From this the investor may conclude that: A. Any disputes over significant accounting issues have been settled to the auditors' satisfaction. 43. The auditors' report may be addressed to the company whose financial statements are being examined or to that company's: C. Board of Directors. 44.
Which of the following best describes what is meant by generally accepted auditing standards? B. Measures of the quality of the auditors' performance. 45. If
noncompliance with a law is discovered during the audit of a publicly held company, the auditors should first: D. Report the act to high level personnel within the client's organization and to the audit committee. 46. Which of the following is the name used to describe financial reporting frameworks other than GAAP which include: cash basis, tax basis, regulatory basis, or contractual basis? D. Special purpose. 47. Which of the following statements best
describes the primary purpose of Statements on Auditing Standards? C. They are authoritative statements, enforced through the Code of Professional Conduct. 48. The primary responsibility for the adequacy of disclosure in the financial statements of a publicly held company rests with the: B. Management of the company. 49. Within the context of quality control, the primary purpose of continuing professional education and training activities is to enable a CPA firm to provide personnel within the firm with: C. Knowledge required to fulfill assigned responsibilities and to progress within the firm. 50. In pursuing a CPA firm's quality control objectives, a CPA firm may maintain records indicating which partners or employees of the CPA firm were previously employed by the CPA firm's clients. Which quality control objective would this be most likely to
satisfy? D. Relevant ethical requirements. 51. A CPA firm establishes quality control policies and procedures for deciding whether to accept a new client or continue to perform services for a current client. The primary purpose for establishing such policies
and procedures is: C. To minimize the likelihood of association with clients whose managements lack integrity. 52. Which of the following is not an element of quality control? A. Documentation. 53. Generally accepted auditing standards established by the AICPA through April of 2003: A. Have been accepted as interim standards by the Public Company Accounting Oversight Board. 54. The Public Company Accounting Oversight Board has authority to establish which of the following relating to public companies? Attestation Standards: Yes, Yes, No, No A. Option A A. Option A: Yes, Yes 55. Which of the following is least likely to be directly examined in an inspection performed by the PCAOB? C. Compilation engagements. 56. As compared with the US public company audit report, the international audit report: B. Includes enhanced explanation of the audit process. 57. A peer review in which the peer reviewers study and appraise a CPA firm's system of quality control to perform accounting and auditing work is referred to as a(n): D. System review. 58. An engagement review form of peer review is least likely to include a peer reviewer's detailed analysis of: C. Overall system of quality control. 59. Of the following, which are current types of peer review? System: Yes, Yes, No, No A. Option A A. Option A: Yes, Yes When the auditors express an opinion on financial statements the responsibilities extend to?When the auditors express an opinion on financial statements their responsibilities extend to: Whether the results of their client's operating decisions are fairly presented in the financial statements.
When the auditors express an opinion on financial statements?What Is an Auditor's Opinion? An auditor's opinion is a certification that accompanies financial statements. It is based on an audit of the procedures and records used to produce the statements and delivers an opinion as to whether material misstatements exist in the financial statements.
Which of the following statements best describes the primary purpose of Statements on Auditing Standards quizlet?Which of the following statements best describes the primary purpose of Statements on Auditing Standards? They are authoritative statements, enforced through the Code of Professional Conduct.
Who has the responsibility for preparing financial statements in accordance with generally accepted accounting principles?Today, the Financial Accounting Standards Board (FASB), an independent authority, continually monitors and updates GAAP. All 50 state governments prepare their financial reports according to GAAP.
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