Principles of Auditing Test 1

Last update by nikki.klover on 09/16/2012
33242 People have viewed this Quiz
  • Share

Which of the following has primary responsibility for the fairness of the representations made in financial statements?

1. Client's management
2. independent auditor
3. audit committee
4. AICPA

Answer:
client's management

View Principles of Auditing Test 1 as Flashcard Deck

Related Quiz Content
  • nikki klover
    The most important benefit of having an annual audit by a public accounting firm is to:

    1. provide assurance to investors and other outsiders that the financial statements are reliable.
    2. enable officers and directors to avoid personal responsibility for any misstatements in the financial statements.
    3. meet the requirements of government agencies.
    4. provide assurance that illegal acts, if any exist, will be brought to light.
    Provide assurance to investors and other outsiders that the financial statements are reliable.
  • nikki klover
    The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board (PCAOB). Which of the following is not one of the responsibilities of that board?

    1. establish independence standards for auditors of public companies
    2. review financial reports filed with the SEC
    3. establish auditing standards for audits of public companies
    4. sanction registered audit firms
    review financial reports filed with the SEC
  • nikki klover
    Which of these organizations has the responsibility to perform inspections of auditors of public companies?

    1. American Institute of Certified Public Accountants
    2. Securities and Exchange Commission
    3. Financial Accounting Standards Board
    4. Public Company Accounting Oversight Board
    Public Company Accounting Oversight Board
  • nikki klover
    Governmental auditing, in addition to including audits of financial statements, often includes audits of efficiency, effectiveness, and:

    1. adequacy
    2. evaluation
    3. accuracy
    4. compliance
    compliance
  • nikki klover
    In general, internal auditors' independence will be greatest when they report directly to the:

    1. Financial vice president
    2. Corporate controller
    3. Audit committee of the board of directors
    4. Chief executive officer
    Audit committee of the board of directors
  • nikki klover
    Which of the following did not precipitate the passage of the Sarbanes-Oxley Act of 2002 to regulate public accounting firms:

    1. disclosures related to accounting irregularities at Enron and WorldCom
    2. restatements of financial statements by a number of public companies
    3. Conviction of the accounting firm of Arthur Anderson LLP
    4. ethical scandals at the AICPA
    ethical scandals at the AICPA
  • nikki klover
    Which of the following organizations establishes accounting standards for U.S. government agencies?

    1. The Financial Accounting Standards Board
    2. The Governmental Accounting Standards Board
    3. The Federal Accounting Standards Advisory Board
    4. The Public Company Accounting Oversight Board
    The Federal Accounting Standards Advisory Board
  • nikki klover
    Which of the following is correct about forensic audits?

    1. all audit engagements are forensic in nature
    2. forensic audits are performed by law firms; they are not performed by CPA firms
    3. forensic audits are equivalent to compliance audits
    4. forensic audits are usually performed in situations in which fraud has been found or is suspected
    forensic audits are usually performed in situations in which fraud has been found or is suspected
  • nikki klover
    What best describes the purpose of the auditors' consideration of internal control in a financial statement audit for a nonpublic company?

    1. to determine the nature, timing, and extent of audit testing
    2. to make recommendations to the client regarding improvements in internal control
    3. to train new auditors on accounting and control systems
    4. to identify opportunities for fraud within the client's operations
    to determine the nature, timing, and extent of audit testing
  • nikki klover
    Which of the following is an example of a compliance audit?

    1. an audit of financial statements
    2. an audit of a company's policies and procedures for adhering to environmental laws and regulations
    3. an audit of a company's internal control over financial reporting
    4. an audit of the efficiency and effectiveness of a company's legal department
    an audit of a company's policies and procedures for adhering to environmental laws and regulations
  • nikki klover
    Which of the following organizations can revoke the right of an individual to practice as a CPA?

    1. The Public Company Accounting Oversight Board
    2. The American Institute of Certified Public Accountants
    3. The Securities and Exchange Commission
    4. The applicable state board of accountancy
    The applicable state board of accountancy