Principles of Auditing and Other Assurance
Services Comprehensive Test Bank for
Student Success | Exam-Ready Version
• Which of the following organizations can revoke the right of an
individual to practice as a CPA?
(a) The Public Company Accounting Oversight Board.
(b) The American Institute of Certified Public Accountants.
(c) The Securities and Exchange Commission.
(d) The applicable state board of accountancy. Answer: (d) The
applicable state board of accountancy.
• The AICPA over time has played an important role in standards
setting. Which of the following standards are currently established by
the AICPA?
(a) Accounting standards applicable to nonpublic companies.
(b) Auditing standards applicable to audits of nonpublic companies.
,(c) Quality control standards applicable to audits of public companies.
(d) Standards for reviews of the interim financial information issued by
public companies. Answer: (b) Auditing standards applicable to audits
of nonpublic companies
• Which of the following does the FASB consider a source of
nonauthoritative guidance for use when there is no authoritative
guidance available?
(a) The FASB Codification.
(b) FASB Concepts Statements.
(c) SEC Rules.
(d) SEC Interpretive Releases Answer: (b) FASB Concepts Statements.
• Financial statement audits performed under PCAOB requirements are
designed to provide which type(s) of assurance with respect to the
detection of material misstatements due to errors or fraud?
Reasonable Absolute
(a) Yes Yes
(b) Yes No
, (c) No Yes
(d) No No Answer: (b) Yes No
• A basic objective of a CPA firm is to provide professional services that
conform with professional standards. Reasonable assurance of achieving
this basic objective is provided through:
(a) Compliance with generally accepted reporting standards.
(b) A system of quality control.
(c) A system of peer review.
(d) Continuing professional education. Answer: (b) A system of quality
control.
• Which of the following is not explicitly included in a standard report
for a nonpublic company?
(a) The CPA's opinion that the financial statements comply with
generally accepted accounting principles.
(b) That generally accepted auditing standards were followed during the
audit.
Services Comprehensive Test Bank for
Student Success | Exam-Ready Version
• Which of the following organizations can revoke the right of an
individual to practice as a CPA?
(a) The Public Company Accounting Oversight Board.
(b) The American Institute of Certified Public Accountants.
(c) The Securities and Exchange Commission.
(d) The applicable state board of accountancy. Answer: (d) The
applicable state board of accountancy.
• The AICPA over time has played an important role in standards
setting. Which of the following standards are currently established by
the AICPA?
(a) Accounting standards applicable to nonpublic companies.
(b) Auditing standards applicable to audits of nonpublic companies.
,(c) Quality control standards applicable to audits of public companies.
(d) Standards for reviews of the interim financial information issued by
public companies. Answer: (b) Auditing standards applicable to audits
of nonpublic companies
• Which of the following does the FASB consider a source of
nonauthoritative guidance for use when there is no authoritative
guidance available?
(a) The FASB Codification.
(b) FASB Concepts Statements.
(c) SEC Rules.
(d) SEC Interpretive Releases Answer: (b) FASB Concepts Statements.
• Financial statement audits performed under PCAOB requirements are
designed to provide which type(s) of assurance with respect to the
detection of material misstatements due to errors or fraud?
Reasonable Absolute
(a) Yes Yes
(b) Yes No
, (c) No Yes
(d) No No Answer: (b) Yes No
• A basic objective of a CPA firm is to provide professional services that
conform with professional standards. Reasonable assurance of achieving
this basic objective is provided through:
(a) Compliance with generally accepted reporting standards.
(b) A system of quality control.
(c) A system of peer review.
(d) Continuing professional education. Answer: (b) A system of quality
control.
• Which of the following is not explicitly included in a standard report
for a nonpublic company?
(a) The CPA's opinion that the financial statements comply with
generally accepted accounting principles.
(b) That generally accepted auditing standards were followed during the
audit.
