Chapter 04 - Legal Liability of CPAs
Chapter 04
Legal Liability of CPAs
True / False Questions
1. Fraud is defined as failure to use reasonable care in the performance of services.
True False
2. Most of the burden of affirmative proof is on the defendant
Chapter 07 - Internal Control
Chapter 07
Internal Control
True / False Questions
1. Internal control is concerned with the reliability of financial information.
True False
2. The Foreign Corrupt Practices Act prohibits bribes to foreign corporate official
Chapter 12 - Inventories and Cost of Goods Sold
Chapter 12
Inventories and Cost of Goods Sold
True / False Questions
1. Observation of inventories is a generally accepted auditing standard.
True False
2. The receiving department should accept only goods f
Chapter 16 - Auditing Operations and Completing the Audit
Chapter 16
Auditing Operations and Completing the Audit
True / False Questions
1. Analytical procedures are often used for verification of income statement accounts.
True False
2. The Miscellaneous
Chapter 17 - Auditors' Reports
Chapter 17
Auditors' Reports
True / False Questions
1. Audit reports should be dated the date on which sufficient appropriate audit evidence has
been collected.
True False
2. When the auditors are unable to comply with gener
Chapter 18 - Integrated Audits of Public Companies
Chapter 18
Integrated Audits of Public Companies
True / False Questions
1. Section 404 of the Sarbanes-Oxley Act of 2002 includes internal control reporting
requirements for both management and auditors.
Chapter 19 - Additional Assurance Services: Historical Financial Information
Chapter 19
Additional Assurance Services: Historical Financial Information
True / False Questions
1. An audit opinion on cash basis financial statements is an example of an opini
Chapter 20 - Additional Assurance Services: Other Information
Chapter 20
Additional Assurance Services: Other Information
True / False Questions
1. Assurance services improve the quality of information or its context for decision makers.
True False
2. Att
Chapter 10 - Cash and Financial Investments
Chapter 10
Cash and Financial Investments
True / False Questions
1. The auditors should count small petty cash funds at year-end to make sure that balance is
not understated on the financial statements.
True Fal
Chapter 09 - Audit Sampling
Chapter 09
Audit Sampling
True / False Questions
1. Stratification of the population generally results in a more efficient sampling plan.
True False
2. Discovery sampling is equivalent to an attributes sampling plan with a spec
Chapter 14 - Accounts Payable and Other Liabilities
Chapter 14
Accounts Payable and Other Liabilities
True / False Questions
1. Overstatement of financial results can involve failure to record a transaction.
True False
2. Confirmation of accounts payable
Chapter 13 - Property, Plant, and Equipment: Depreciation and Depletion
Chapter 13
Property, Plant, and Equipment: Depreciation and Depletion
True / False Questions
1. The auditors' approach to the audit of property, plant, and equipment largely results f
Chapter 01 - The Role of the Public Accountant in the American Economy
Chapter 01
The Role of the Public Accountant in the American Economy
True / False Questions
1. Independent audits of today place more emphasis on sampling than did the audits of the
19
Chapter 02 - Professional Standards
Chapter 02
Professional Standards
True / False Questions
1. To express an opinion on financial statements, the auditor obtains reasonable assurance
about whether the financial statements as a whole are free from materia
Chapter 03 - Professional Ethics
Chapter 03
Professional Ethics
True / False Questions
1. The Rules portion of the AICPA Code of Professional Conduct must be followed by only
those members in private practice.
True False
2. The AICPA Code of Professional
Chapter 05 - Audit Evidence and Documentation
Chapter 05
Audit Evidence and Documentation
True / False Questions
1. The professional standards consider calculating depreciation expense a "routine"
transaction.
True False
2. The most reliable form of docum
Chapter 06 - Audit Planning, Understanding the Client, Assessing Risks, and Responding
Chapter 06
Audit Planning, Understanding the Client, Assessing Risks, and
Responding
True / False Questions
1. Audit committees should be made up of the most qualified
Chapter 08 - Consideration of Internal Control in an Information Technology Environment
Chapter 08
Consideration of Internal Control in an Information Technology
Environment
True / False Questions
1. Magnetic tape drives have the advantage of direct acces
Chapter 15 - Debt and Equity Capital
Chapter 15
Debt and Equity Capital
True / False Questions
1. The formal documentation creating bond indebtedness is called the indenture.
True False
2. Registered bondholders receive periodic interest payments without
