ACC450_MC_Solutions_Chpt1 -...

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Chapter 1 SOLUTIONS FOR MULTIPLE CHOICE-QUESTIONS 1.23 a. Incorrect This is an attestation to the prize promoter’s claims. b. Incorrect This is an audit engagement to give an opinion on financial statements. c. Incorrect This is an assurance engagement on newspaper’s circulation data. d. Incorrect This is an assurance engagement on the performance of golf balls. e. Correct Since attestation and audit engagements are subsets of assurance  engagements, all are assurance engagements. 1.24 a. Correct This statement characterizes professional skepticism. b. Incorrect “Exclusively an auditor” is not an idea that seems to speak of “skepticism.” c. Incorrect Professional obligations” is not an idea that seems to speak of “skepticism.” d. Incorrect This is more an assumption of necessity than of skepticism. 1.25 a. Incorrect  While work on a forecast is covered by the attestation standards, the auditors  should give assurance or a disclaimer. b. Correct  This is the basic definition of attestation--giving a report on reliability of an  assertion one party makes to another. c. Incorrect  Tax work is not an attestation service. d. Incorrect  Litigation and expert witness services are not attestation services. 1.26 a.  Incorrect The objective of environmental auditing is to help achieve and maintain  compliance with environmental laws and regulations and to help identify and  correct unregulated environmental hazards b.  Incorrect The objective of financial auditing is to obtain assurance on the conformity of  financial statements with generally accepted accounting principles. c.  Incorrect   The objective of compliance auditing is the entity’s compliance with laws and  regulations. d.  Correct Operational auditing refers to the study of business operations for the purpose of  making recommendations about the economic and efficient use of resources,  effective achievement of business objectives, and compliance with company  policies. 1.27 a.  Incorrect While not the primary objective of an operational audit, auditors should still be  concerned about compliance with financial accounting standards. b.  Correct This statement is part of the basic definition of operational auditing. c. 
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This note was uploaded on 06/11/2011 for the course ACC 450 taught by Professor Null during the Spring '11 term at GWU.

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ACC450_MC_Solutions_Chpt1 -...

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