Audit Chapter 2 – Exam 1 | Quick Review & Practice Guide
A series of business and related auditing failures led to the passage of the
Sarbanes-Oxley Act (2002). - (ANSWERS)True
The primary audit context with which an auditor is concerned is the
auditee's industry or business. - (ANSWERS)True
The audit committee generally includes senior executives of the
organization. - (ANSWERS)False
A financial statement audit is generally organized based on the five basic
business processes or cycles. - (ANSWERS)True
One of the five basic business processes is the warehousing cycle. -
(ANSWERS)False
The ASB's auditing standards contain a preface that includes Principles
Underlying an Audit Conducted in Accordance with GAAS. -
(ANSWERS)True
PCAOB auditing standards must be followed on all financial statement
audits performed in the U.S. - (ANSWERS)False
A financial statement audit must be conducted based on GAAP. -
(ANSWERS)False
Generally, the financial statements of U.S. companies must be prepared
based on GAAP. - (ANSWERS)True
1/9
, Audit Chapter 2 – Exam 1 | Quick Review & Practice Guide
PCAOB auditing standards must be followed on all audits of public
companies' financial statements. - (ANSWERS)True
The Audit Committee consists of: - (ANSWERS)members of the Board of
Directors
What organization is responsible for setting auditing standards for audits of
publicly-traded companies in the U.S.? - (ANSWERS)PCAOB
The Public Company Accounting Oversight Board's role is to: -
(ANSWERS)oversee the auditors of public companies in order to protect
the interests of investors
The authoritative body designed to promulgate standards concerning a
CPA's association with audited financial statements of an entity that is
required to file financial statements with the SEC is the: -
(ANSWERS)public company accounting oversight board
The auditor must be independent of the auditee unless: - (ANSWERS)none
of the above—the auditor cannot lack independence
Which principle of the Principles Underlying an Audit Conducted in
Accordance with GAAS describes where auditors are required to plan the
work and properly supervise any assistants? - (ANSWERS)Responsibilities
Which of the following best describes the general character of the three
2/9
A series of business and related auditing failures led to the passage of the
Sarbanes-Oxley Act (2002). - (ANSWERS)True
The primary audit context with which an auditor is concerned is the
auditee's industry or business. - (ANSWERS)True
The audit committee generally includes senior executives of the
organization. - (ANSWERS)False
A financial statement audit is generally organized based on the five basic
business processes or cycles. - (ANSWERS)True
One of the five basic business processes is the warehousing cycle. -
(ANSWERS)False
The ASB's auditing standards contain a preface that includes Principles
Underlying an Audit Conducted in Accordance with GAAS. -
(ANSWERS)True
PCAOB auditing standards must be followed on all financial statement
audits performed in the U.S. - (ANSWERS)False
A financial statement audit must be conducted based on GAAP. -
(ANSWERS)False
Generally, the financial statements of U.S. companies must be prepared
based on GAAP. - (ANSWERS)True
1/9
, Audit Chapter 2 – Exam 1 | Quick Review & Practice Guide
PCAOB auditing standards must be followed on all audits of public
companies' financial statements. - (ANSWERS)True
The Audit Committee consists of: - (ANSWERS)members of the Board of
Directors
What organization is responsible for setting auditing standards for audits of
publicly-traded companies in the U.S.? - (ANSWERS)PCAOB
The Public Company Accounting Oversight Board's role is to: -
(ANSWERS)oversee the auditors of public companies in order to protect
the interests of investors
The authoritative body designed to promulgate standards concerning a
CPA's association with audited financial statements of an entity that is
required to file financial statements with the SEC is the: -
(ANSWERS)public company accounting oversight board
The auditor must be independent of the auditee unless: - (ANSWERS)none
of the above—the auditor cannot lack independence
Which principle of the Principles Underlying an Audit Conducted in
Accordance with GAAS describes where auditors are required to plan the
work and properly supervise any assistants? - (ANSWERS)Responsibilities
Which of the following best describes the general character of the three
2/9
