1. In determining auditor independence, the SEC considers which
of the following as an independence impairment? (pg. 137)
An auditor performs the accounting work and then audits it.
An auditor has no conflicting interest with the client.
1. The first general standard of the PCAOB requires that an audit be
performed by which type of person?
An auditor with seasoned judgment in varying degrees of supervision and
An auditor with appropriate technical training and proficiency.
Balance Related Audit
evaluations of financial
information through analysis
of plausible relationships
among financial and
8 objectives must be met before the auditor can conclu
1. Which the following is not a reason for a public company to
receive an audit?
Potential bias in providing information.
Closeness between a user and the organization.
Complexity of the processing systems.
Remoteness between a user and the or
Audit Theory and Practice Chapter 7 UWB
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evaluations of financial information
through analysis of plausible relationships
among financial and non-financial data
Acceptable Audit Risk
Client Business Risk
a measure of how willing the auditor
is to accept that the financial
statements may be materially
misstated after the audit is
completed and an unqualified
opinion has bee