AUDIT AND ASSURANCE FINAL PAPER TESTED QUESTIONS WITH VERIFIED ANSWERS COMPLETE STUDY SHEET

AUDIT AND ASSURANCE FINAL PAPER
TESTED QUESTIONS WITH VERIFIED
ANSWERS COMPLETE STUDY SHEET

●● The possibility that an entity will fail to meet its objectives is
__________ __________.
Answer: business risk


●● To minimize business risk and take advantage of opportunities,
CEOs demand information that is ______.
Answer: reliable
timely
relevant


●● Environmental conditions that increase user demand for relevant and
reliable information include __________, remoteness, time sensitivity
and __________.
Answer: complexity
consequences


●● The probability that data circulated by a company will be false or
misleading is __________ __________.
Answer: information risk

, ●● The Public Company Accounting Oversight Board (PCAOB)
______.
Answer: inspects audit firms' quality control processes
sets all audit standards for audits of public companies
performs inspections of completed audit work


●● The chance that customers will buy from competitors or product
lines will become obsolete are examples of __________ risk.
Answer: business


●● Financial statement frauds and potential __________ of __________
between information providers and users leads to a natural skepticism on
the part of users.
Answer: conflict of interest


●● High-quality information to make educated financial decisions is
demanded by ______.
Answer: investors and creditors


●● Environmental conditions that increase user demand for relevant and
reliable information include ______.
Answer: time sensitivity
complexity