AICPA Study Guide Questions with 100%
Correct Answers
According to the Sarbanes-Oxley Act of 2002, each of the following is a corporate
responsibility requirement, except:
The audit committee of the issuer is directly responsible for the appointment,
compensation, and oversight of the registered accounting firm.
The audit committee chairperson must certify that the quarterly report filed with the
SEC fairly presents the financial condition and results of operations.
The audit committee of the issuer must establish whistleblowing mechanisms and
procedures within the issuer.
Each audit committee member of the issuer must be independent.
The audit committee chairperson must certify that the quarterly report filed with the SEC
fairly presents the financial condition and results of operations.
Which of the following individuals or groups within an organization reviews and
approves long- range plans and oversees its information systems?
Systems steering committee.
A credit card company that processes millions of transactions each year has experienced
an increase in fraudulent transactions. The company maintains a data warehouse with
data about customers and transactions from the past five years. How could the
,company best use this data to detect potentially fraudulent charges within 24 hours of
receipt of transaction data?
Employ data mining.
A company has established and communicated baseline expectations for performance to
all employees. The company's action demonstrates a focus on which of the following
components of the COSO Internal Control Framework?
Control environment.
When risk is evaluated, which of the following risk responses is generally considered a
sharing response?
Diversifying product offerings.
Entering into syndication agreements.
Reallocating capital among operating units.
Rebalancing the asset portfolio to reduce exposure to certain types of losses.
Entering into syndication agreements.
According to the Sarbanes-Oxley Act of 2002, the audit committee of an issuer is
responsible for each of the following activities, EXCEPT:
Evaluating and reporting on the effectiveness of the company's internal control over
financial reporting.
Preapproving all audit and nonaudit services provided by the company's auditor.
Establishing procedures for the receipt, retention, and treatment of complaints received
, by the company regarding accounting, internal control, and auditing matters.
The appointment, compensation, and oversight of the work of the registered public
accounting firm employed by the company.
Evaluating and reporting on the effectiveness of the company's internal control over financial
reporting. (Auditor's Job)
A client owns a $1,000 10-year bond. The coupon rate is 6%. The client acquired the
bond three years ago at a discount. What is known about the interest rates three years
ago?
The stated rate was less than 6%.
The stated rate was more than 6%.
The market rate was less than 6%.
The market rate was more than 6%.
The market rate was more than 6%.
An investment manager has been asked to prepare an analysis to show the difference
between the interest rates on U.S. Treasury bonds and corporate bonds of equal
maturity and marketability. What type of interest rate premium is being analyzed?
Default risk premium.
The transfer price set by a parent or subsidiary for goods or services most likely can be
used by multinational companies to:
Transfer as much of the cost as allowable to the country with the lowest overall tax
burden.
Correct Answers
According to the Sarbanes-Oxley Act of 2002, each of the following is a corporate
responsibility requirement, except:
The audit committee of the issuer is directly responsible for the appointment,
compensation, and oversight of the registered accounting firm.
The audit committee chairperson must certify that the quarterly report filed with the
SEC fairly presents the financial condition and results of operations.
The audit committee of the issuer must establish whistleblowing mechanisms and
procedures within the issuer.
Each audit committee member of the issuer must be independent.
The audit committee chairperson must certify that the quarterly report filed with the SEC
fairly presents the financial condition and results of operations.
Which of the following individuals or groups within an organization reviews and
approves long- range plans and oversees its information systems?
Systems steering committee.
A credit card company that processes millions of transactions each year has experienced
an increase in fraudulent transactions. The company maintains a data warehouse with
data about customers and transactions from the past five years. How could the
,company best use this data to detect potentially fraudulent charges within 24 hours of
receipt of transaction data?
Employ data mining.
A company has established and communicated baseline expectations for performance to
all employees. The company's action demonstrates a focus on which of the following
components of the COSO Internal Control Framework?
Control environment.
When risk is evaluated, which of the following risk responses is generally considered a
sharing response?
Diversifying product offerings.
Entering into syndication agreements.
Reallocating capital among operating units.
Rebalancing the asset portfolio to reduce exposure to certain types of losses.
Entering into syndication agreements.
According to the Sarbanes-Oxley Act of 2002, the audit committee of an issuer is
responsible for each of the following activities, EXCEPT:
Evaluating and reporting on the effectiveness of the company's internal control over
financial reporting.
Preapproving all audit and nonaudit services provided by the company's auditor.
Establishing procedures for the receipt, retention, and treatment of complaints received
, by the company regarding accounting, internal control, and auditing matters.
The appointment, compensation, and oversight of the work of the registered public
accounting firm employed by the company.
Evaluating and reporting on the effectiveness of the company's internal control over financial
reporting. (Auditor's Job)
A client owns a $1,000 10-year bond. The coupon rate is 6%. The client acquired the
bond three years ago at a discount. What is known about the interest rates three years
ago?
The stated rate was less than 6%.
The stated rate was more than 6%.
The market rate was less than 6%.
The market rate was more than 6%.
The market rate was more than 6%.
An investment manager has been asked to prepare an analysis to show the difference
between the interest rates on U.S. Treasury bonds and corporate bonds of equal
maturity and marketability. What type of interest rate premium is being analyzed?
Default risk premium.
The transfer price set by a parent or subsidiary for goods or services most likely can be
used by multinational companies to:
Transfer as much of the cost as allowable to the country with the lowest overall tax
burden.
