Audit Midterm pages 1-3

Question 1 of 19

1

The Sarbanes-Oxley Act applies to which of the following companies?

Select one of the following:

All companies
Privately held companies
Public companies
All public companies and privately held companies with assets greater than $500 million

Explanation

Question 2 of 19

1

In "auditing" financial accounting data, the primary concern is with:

Select one of the following:

determining whether recorded information properly reflects the economic events that occurred during the accounting period.
determining if fraud has occurred.
determining if taxable income has been calculated correctly.
analyzing the financial information to be sure that it complies with government requirements.

Explanation

Question 3 of 19

1

Which of the following statements best describes the primary purpose of Statements on Auditing Standards?

Select one of the following:

They are guides intended to set forth auditing procedures that are applicable to a variety of situations.
They are procedural outlines that are intended to narrow the areas of inconsistency and divergence of auditor opinion
They are authoritative statements, enforced through the Code of Professional Conduct, and are intended to limit the degree of auditor judgment.
They are interpretations that are intended to clarify the meaning of "generally accepted auditing standards.

Explanation

Question 4 of 19

1

The AICPA has authority to establish standards and rules in all but which of the following areas?

Select one of the following:

Auditing standards applicable to financial statements of private companies
Compilation and review standards
Professional conduct
Auditing standards applicable to financial statements of private and public companies

Explanation

Question 5 of 19

1

The Statements on Auditing Standards issued by the Auditing Standards Board:

Select one of the following:

True
False

Explanation

Question 6 of 19

1

PCAOB Auditing Standard No. 2 requires the audit of internal control over financial reporting to be integrated with:

Select one of the following:

the audit of the financial statements.
the quarterly review of financial information.
the review of annual financial statements.
None of the above

Explanation

Question 7 of 19

1

Which of the following can be significantly affected by an audit?

Select one of the following:

Business risk.
Information risk
The risk-free interest rate
Inherent risk

Explanation

Question 8 of 19

1

An audit of financial statements is most often performed to determine whether the

Select one of the following:

entity is following specific procedures or rules set down by some higher authority
organization is operating efficiently and effectively.
management team is fulfilling its fiduciary responsibilities to shareholders
none of these choices.

Explanation

Question 9 of 19

1

Evidence may take which of the following forms?

Select one of the following:

Oral responses to the auditor from employees of the company under audit.
Written communications from company employees or outsiders.
Observations made by an auditor.
Evidence may take any of the above forms.

Explanation

Question 10 of 19

1

The statements most commonly included in An audit of financial statements are the

Select one of the following:

retained earnings, the income statement, and the statement of cash flows
income statement, the statement of cash flows, and the statement of net working capital.
statement of cash flows, the balance sheet, and the retained earnings statement.
balance sheet, the income statement, and the statement of cash flows

Explanation

Question 11 of 19

1

Which one of the following is not a Field Work Standard?

Select one of the following:

Adequate planning and supervision.
Due professional care.
Understand the entity and its environment including internal control.
Sufficient appropriate audit evidence.

Explanation

Question 12 of 19

1

Williams & Co., a member of the Private Companies Practice Section, is to have a “peer review.” The peer review can be performed by:

Select one of the following:

a CPA firm selected by Williams & Co.
a review team selected by the state society.
internal auditors.
either a or b.

Explanation

Question 13 of 19

1

Statements on Auditing Standards provide auditors of privately held companies with ______ guidance regarding the conduct of financial statement audits.

Select one of the following:

fairly extensive
some limited
practically no
specific and detailed

Explanation

Question 14 of 19

1

An auditor may not issue a qualified opinion when:

Select one of the following:

a scope limitation prevents the auditor from completing an important audit procedure.
the auditor’s report refers to the work of a specialist.
the auditor lacks independence with respect to the audited entity.
an accounting principle at variance with GAAP is used

Explanation

Question 15 of 19

1

The client has presented all required financial statements with the exception of the statement of cash flows. The auditor has completed the audit and is satisfied that all other statements are presented fairly. The auditor:

Select one of the following:

may issue either an unqualified or a qualified opinion
must issue an adverse opinion with “except for” in the opinion paragraph.
may issue an unqualified opinion.
must issue a qualified opinion with “except for” in the opinion paragraph

Explanation

Question 16 of 19

1

Whenever an auditor issues an unqualified opinion, the implication is that auditor

Select one of the following:

Is satisfied that the statements are presented fairly in accordance with GAAP except for a specific aspect of them.
Is satisfied that the statements are presented fairly in accordance with GAAP
Does not believe the statement are presented fairly in accordance with GAAP
Does not know if the statement are presented fairly in accordance with GAAP

Explanation

Question 17 of 19

1

	Created by Rebecca Escobar over 8 years ago

1 Audit Quiz on Audit Midterm pages 1-3, created by Rebecca Escobar on 24/02/2016.

Audit Midterm pages 1-3

Question 1 of 19

The Sarbanes-Oxley Act applies to which of the following companies?

Select one of the following:

Explanation

Question 2 of 19

In "auditing" financial accounting data, the primary concern is with:

Select one of the following:

Explanation

Question 3 of 19

Which of the following statements best describes the primary purpose of Statements on Auditing Standards?

Select one of the following:

Explanation

Question 4 of 19

The AICPA has authority to establish standards and rules in all but which of the following areas?

Select one of the following:

Explanation

Question 5 of 19

The Statements on Auditing Standards issued by the Auditing Standards Board:

Select one of the following:

Explanation

Question 6 of 19

PCAOB Auditing Standard No. 2 requires the audit of internal control over financial reporting to be integrated with:

Select one of the following:

Explanation

Question 7 of 19

Which of the following can be significantly affected by an audit?

Select one of the following:

Explanation

Question 8 of 19

An audit of financial statements is most often performed to determine whether the

Select one of the following:

Explanation

Question 9 of 19

Evidence may take which of the following forms?

Select one of the following:

Explanation

Question 10 of 19

The statements most commonly included in An audit of financial statements are the

Select one of the following:

Explanation

Question 11 of 19

Which one of the following is not a Field Work Standard?

Select one of the following:

Explanation

Question 12 of 19

Williams & Co., a member of the Private Companies Practice Section, is to have a “peer review.” The peer review can be performed by:

Select one of the following:

Explanation

Question 13 of 19

Statements on Auditing Standards provide auditors of privately held companies with ______ guidance regarding the conduct of financial statement audits.

Select one of the following:

Explanation

Question 14 of 19

An auditor may not issue a qualified opinion when:

Select one of the following:

Explanation

Question 15 of 19

The client has presented all required financial statements with the exception of the statement of cash flows. The auditor has completed the audit and is satisfied that all other statements are presented fairly. The auditor:

Select one of the following:

Explanation

Question 16 of 19

Whenever an auditor issues an unqualified opinion, the implication is that auditor

Select one of the following:

Explanation

Question 17 of 19

An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a(n):

Select one of the following:

Explanation

Question 18 of 19

The General Standards stress the importance of:

Select one of the following:

Explanation

Question 19 of 19

The audit program usually states all four of the choices below, but it always

Select one of the following:

Explanation