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Unformatted text preview: Chapter 02 - Professional Standards Chapter 02 Professional Standards Answer Key 1. The attestation standards of reporting do not require the attestation report to include a statement that 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. 3. The responsibilities principle under generally accepted auditing standards does not include which of the following? 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. 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? C. Acceptance and continuance of clients. 6. Which of the following presumptions does not relate to the reliability of audit evidence? B. The auditors' opinion, to be economically useful, is formed within reasonable time and based on evidence obtained at a reasonable cost. 7. An important role of the Public Company Accounting Oversight Board (PCAOB) is to oversee the D. Regulation of firms that audit public companies. 8. Audit evidence is usually considered sufficient when B. There is enough quantity to afford a reasonable basis for an opinion on financial statements. 9. Which of the following is not considered a type of audit evidence? A. The company's trial balance. 10. The AICPA attestation standards differ from the AICPA responsibilities principle, performance principle and reporting principle in that: 2-1 Chapter 02 - Professional Standards A. The attestation standards contain no requirement to obtain an understanding of the entity and assess the risk of material misstatement. 11. An audit of the financial statements of Camden Corporation is being conducted by external auditors. The external auditors are expected to: C. Give an opinion on the fair presentation of Camden's financial statements in conformity 12. Auditors try to achieve independence in appearance in order to: A. Maintain public confidence in the profession. 13. The independent auditors' plan prepared prior to the start of field work is appropriately considered documentation of A. Planning. 14. Which of the following procedures would provide the most reliable audit evidence? C. Inspection of bank statements obtained directly from the client's financial institution. 15. Which of the following is not an attestation standard? D. A sufficient understanding of the client's internal controls shall be obtained to plan the engagement....
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- Fall '08
- Financial audit, professional standards