Test bank for Auditing & Assurance Services: A
Systematic Approach 12th Edition by William F.
Messier Jr. complete guide
Which of the following is the essential purpose of the audit function?
A. Detection of fraud.
B. Examination of individual transactions to certify their validity.
C. Determination of whether the client's financial statement assertions are fairly stated.
D. Assurance of the consistent application of correct accounting procedures - answer-C.
Determination of whether the client's financial statement assertions are fairly stated.
Which of the following best describes the primary role and responsibility of the independent
external auditor?
A. Produce a company's annual financial statements and notes.
B. Express an opinion on the fairness of a company's annual financial statements and
footnotes.
C. Provide business consulting advice to audit clients.
D. Obtain an understanding of the client's internal control structure and give management a
report about control problems and deficiencies. - answer-B. Express an opinion on the fairness
of a company's annual financial statements and
footnotes.
Because of the risk of material misstatement, an audit of financial statements in accordance
1
,with generally accepted auditing standards should be planned and performed with an attitude
of
A. Objective judgment.
B. Independent integrity.
C. Professional skepticism.
D. Impartial conservatism. - answer-C. Professional skepticism
Which of the following best describes assurance services?
A. Independent professional services that report on the client's financial statements.
B. Independent professional services that improve the quality of information for decision
makers.
C. Independent professional services that report on specific written management assertions.
D. Independent professional services that improve the client's operations. - answer-B.
Independent professional services that improve the quality of information for decision
makers.
An attestation engagement is one in which a CPA is engaged to
A. Issue a report on subject matter or an assertion about the subject matter that is the
responsibility of another party.
B. Provide tax advice or prepare a tax return based on financial information the CPA has not
audited or reviewed.
C. Testify as an expert witness in accounting, auditing, or tax matters, given certain
stipulated facts.
D. Assemble prospective financial statements based on the assumptions of the entity's
management without expressing any assurance. - answer-A. Issue a report on subject matter or
2
, an assertion about the subject matter that is the
responsibility of another party.
The Sarbanes-Oxley Act of 2002 requires that the key company officials certify the financial
statements. Certification means that the company CEO and CFO must sign a statement
indicating
A. They have read the financial statements.
B. They are not aware of any false or misleading statements (or any key omitted disclosures)
C. They believe that the financial statements present an accurate picture of the company's
financial condition.
D. All of the above. - answer-D. All of the above.
The four basic requirements for becoming a CPA in most states relate to
A. Education, the CPA Examination, experience, and substantial equivalency.
B. The CPA Examination, experience, continuing professional education, and a state
certificate.
C. Continuing professional education, the CPA Examination, experience, and an AICPA
certificate.
D. Education, the CPA Examination, experience, and a state certificate. - answer-D. Education,
the CPA Examination, experience, and a state certificate.
An important role of the Public Company Accounting Oversight Board is to oversee the
A. Issuance of statements by the Financial Accounting Standards Board.
B. Preparation and grading of the Uniform CPA Examination.
C. Peer review of member firms of the Private Companies Practice Section.
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Systematic Approach 12th Edition by William F.
Messier Jr. complete guide
Which of the following is the essential purpose of the audit function?
A. Detection of fraud.
B. Examination of individual transactions to certify their validity.
C. Determination of whether the client's financial statement assertions are fairly stated.
D. Assurance of the consistent application of correct accounting procedures - answer-C.
Determination of whether the client's financial statement assertions are fairly stated.
Which of the following best describes the primary role and responsibility of the independent
external auditor?
A. Produce a company's annual financial statements and notes.
B. Express an opinion on the fairness of a company's annual financial statements and
footnotes.
C. Provide business consulting advice to audit clients.
D. Obtain an understanding of the client's internal control structure and give management a
report about control problems and deficiencies. - answer-B. Express an opinion on the fairness
of a company's annual financial statements and
footnotes.
Because of the risk of material misstatement, an audit of financial statements in accordance
1
,with generally accepted auditing standards should be planned and performed with an attitude
of
A. Objective judgment.
B. Independent integrity.
C. Professional skepticism.
D. Impartial conservatism. - answer-C. Professional skepticism
Which of the following best describes assurance services?
A. Independent professional services that report on the client's financial statements.
B. Independent professional services that improve the quality of information for decision
makers.
C. Independent professional services that report on specific written management assertions.
D. Independent professional services that improve the client's operations. - answer-B.
Independent professional services that improve the quality of information for decision
makers.
An attestation engagement is one in which a CPA is engaged to
A. Issue a report on subject matter or an assertion about the subject matter that is the
responsibility of another party.
B. Provide tax advice or prepare a tax return based on financial information the CPA has not
audited or reviewed.
C. Testify as an expert witness in accounting, auditing, or tax matters, given certain
stipulated facts.
D. Assemble prospective financial statements based on the assumptions of the entity's
management without expressing any assurance. - answer-A. Issue a report on subject matter or
2
, an assertion about the subject matter that is the
responsibility of another party.
The Sarbanes-Oxley Act of 2002 requires that the key company officials certify the financial
statements. Certification means that the company CEO and CFO must sign a statement
indicating
A. They have read the financial statements.
B. They are not aware of any false or misleading statements (or any key omitted disclosures)
C. They believe that the financial statements present an accurate picture of the company's
financial condition.
D. All of the above. - answer-D. All of the above.
The four basic requirements for becoming a CPA in most states relate to
A. Education, the CPA Examination, experience, and substantial equivalency.
B. The CPA Examination, experience, continuing professional education, and a state
certificate.
C. Continuing professional education, the CPA Examination, experience, and an AICPA
certificate.
D. Education, the CPA Examination, experience, and a state certificate. - answer-D. Education,
the CPA Examination, experience, and a state certificate.
An important role of the Public Company Accounting Oversight Board is to oversee the
A. Issuance of statements by the Financial Accounting Standards Board.
B. Preparation and grading of the Uniform CPA Examination.
C. Peer review of member firms of the Private Companies Practice Section.
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