Chapter 1 1. Which of the following best describes the relationship between assurance and attest services? a. While attest services involve financial data, assurance services involve nonfinancial data b. While attest services require objectivity, assurance services do not require objectivity c. Both attest and assurance services require independence d. Attest and assurance services are different terms referring to the same type of services 2. Which of the following has primary responsibility for the fairness of the representations made in financial statement? a. Client’s management b. Independent auditor c. Audit committee d. AICPA 3. The most important benefit of having an annual audit by a public accounting firm is to a. Provide assurance to investors and other outsides that the financial statements are reliable b. Enable officers and directors to avoid personal responsibility for any misstatements in the financial statements c. Meet the requirements of government agencies d. Provide assurance that illegal acts, if any, will be brought to light 4. The Sarbanes-Oxley Act created Public Company Accounting Oversight Board. Which of the following is not one of the responsibilities of that board? a. Establish independence standards for auditors of public companies b. Review financial reports with the SEC c. Establish auditing standards for audits of public companies d. Sanction registered audit firms 5. Which of these organizations has the responsibility to perform inspections of auditors of public companies? a. American Institute of Certified Public Accountants b. Securities and Exchange Commission c. Financial Accounting Standards Board d. Public Company Accounting Oversight Board 6. Governmental auditing, in addition to including audits of financial statements, often includes audits of efficiency, effectiveness and a. Adequacy b. Evaluation c. Accuracy d. Compliance 7. In general, internal auditors’ independence will be greatest when they report directly to the a. Financial vice president b. Corporate controller c. Audit committee of the board of directors d. Chief executive officer
8. Which of the following did not precipitate the passage of the Sarbanes-Oxley Act of 2002 to regulate public accounting firms a. Disclosures related to accounting irregularities at Enron and WorldCom b. Restatements of financial statements by a number of public companies c. Conviction of the accounting firms of Arthur Andersen LLP. d. Ethical scandals at the AICPA 9. Which of the following organizations establishes accounting standards for U.S. government agencies? a. FASB b. The governmental accounting standards board c. The federal accounting standards advisory board d. PCAOB 10. Which of the following is correct about forensic audits? a.
This is the end of the preview. Sign up to
access the rest of the document.