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Unformatted text preview: Chapter 02 - Professional Standards Chapter 02 Professional Standards Multiple Choice Questions 1. The attestation standards of reporting do not require the attestation report to include a statement that A. Provides a conclusion whether the subject matter is presented in conformity with established or stated criteria. B. Indicates that the practitioner has significant reservations about the engagement. C. Identifies the subject matter or assertion being reported on. D. Indicates that the accountant assumes no responsibility to update the report. 2. Control risk is A. The probability that a material misstatement could not be prevented or detected by the entity's internal control policies and procedures. B. The probability that a material misstatement could occur and not be detected by auditors' procedures. C. The risk that auditors will not be able to complete the audit on a timely basis. D. The risk that auditors will not properly control the staff on the audit engagement. 3. The responsibilities principle under generally accepted auditing standards does not include which of the following? A. Competence and capabilities. B. Independent attitude. C. Due care. D. Planning and supervision. 4. Which of the following types of auditors' reports does not require an explanatory paragraph to support the opinion? A. Unqualified opinion. B. Adverse opinion. C. Qualified opinion. D. Disclaimer of opinion. 2-1 Chapter 02 - Professional Standards 5. Which of the following is an element of a system of quality control that should be considered by a public accounting firm in establishing its quality control policies and procedures? A. Lending credibility to a client's financial statements. B. Using statistical sampling techniques. C. Acceptance and continuance of clients. D. Membership in the Center for Public Company Audit Firms (CPCAF). 6. Which of the following presumptions does not relate to the reliability of audit evidence? A. The more effective the client's internal control, the more assurance it provides about the accounting data and financial statements. B. The auditors' opinion, to be economically useful, is formed within reasonable time and based on evidence obtained at a reasonable cost. C. Evidence obtained from independent sources outside the entity is more reliable than evidence secured solely within the entity. D. The independent auditors' direct personal knowledge, obtained through observation and inspection, is more persuasive than information obtained indirectly. 7. An important role of the Public Company Accounting Oversight Board (PCAOB) is to oversee the A. Issuance of statements by the Financial Accounting Standards Board. B. Preparation and grading of the Uniform CPA Examination....
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- Spring '11