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Chapter 1 Homework

Chapter 1 Homework - ACC 450 Chapter 1 1.23 Which of the...

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ACC 450 Chapter 1 1.23 Which of the following would be considered an assurance engagement? a. Giving an opinion on a prize promoter’s claims about the amount of sweepstakes prizes awarded in the past. b. Giving an opinion on the conformity of the financial statements of a university with generally accepted accounting principles. c. Giving an opinion on the fair presentation of a newspaper’s circulation data. d. Giving assurance about the average drive length achieved by golfers with a client’s golf balls. e. All of the above. 1.24 It is always a good idea for auditors to begin an audit with the professional skepticism characterized by the assumption that a. A potential conflict of interest always exists between the auditor and the management of the enterprise under audit. b. In audits of financial statements, the auditor acts exclusively in the capacity of an auditor. c. The professional status of the independent auditor imposes commensurate professional obligations. d. Financial statements and financial data are verifiable. 1.25 In an attestation engagement, a CPA practitioner is engaged to a. Compile a company's financial forecast based on management's assumptions without expressing any form of assurance. b. Prepare a written report containing a conclusion about the reliability of a management assertion. c. Prepare a tax return using information the CPA has not audited or reviewed. d. Give expert testimony in court on particular facts in a corporate income tax controversy.
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1.26 A determination of cost savings obtained by outsourcing cafeteria services is most likely to be an objective of a. Environmental auditing. b. Financial auditing. c. Compliance auditing. d. Operational auditing. 1.27 The primary difference between operational auditing and financial auditing is that in operational auditing a. The operational auditor is not concerned with whether the audited activity is generating information in compliance with financial accounting standards. b. The operational auditor is seeking to help management use resources in the most efficient manner possible. c. The operational auditor starts with the financial statements of an activity being audited and works backward to the basic processes involved in producing them.
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