ACCY 131 FINAL UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
1. Which of the following is not correct relating to the
Sarbanes-Oxley Act?
A. It toughens penalties for corporate fraud.
Answer:
It applies to both public and nonpublic audit clients.
Question:
2. B. It restricts the types of consulting CPAs may perform
for audit clients.
C. It applies to both public and nonpublic audit clients.
D. It eliminates a significant portion of the accounting
profession's system of self-regulation.
Answer:
Question:
3. Which of the following best describes the reason why
independent auditors report on financial statements?
A. A management fraud may exist and it is more likely to
be detected by independent auditors.
B. An audit provides credibility to the financial statements.
C. A misstatement of account balances may exist and is
generally corrected as the result of the independent
auditors' work.
D. Poorly designed internal control may be in existence.
Answer:
An audit provides credibility to the financial statements
Question:
4. A typical objective of an operational audit is for the
auditor to:
A. Determine whether the financial statements fairly
present the entity's operations.
Answer:
Make recommendations for improving performance.
,Question:
5. B. Evaluate the feasibility of attaining the entity's
operational objectives.
Answer:
Question:
6. C. Make recommendations for improving performance.
Answer:
Question:
7. D. Report on the entity's relative success in attaining
profit maximization.
Answer:
Question:
8. International Standards on Auditing are issued by
A. International Standards Board.
Answer:
International Auditing and Assurance Standards Board.
Question:
9. B. International Auditing and Assurance Standards Board.
Answer:
Question:
10. C. Public Company Accounting Oversight Board.
Answer:
Question:
11. D. International Auditing Education Standards Board.
Answer:
Question:
12. Which of the following is not a type of auditors' opinion?
A. Unmodified.
Answer:
Advisory.
Question:
13. B. Qualified.
Answer:
,Question:
14. C. Advisory.
Answer:
Question:
15. D. Disclaimer.
Answer:
Question:
16. An adverse opinion is most likely to be included in an
audit report when:
A. A standard unmodified opinion is necessary.
Answer:
The financial statements depart from GAAP.
Question:
17. B. A public company is involved.
Answer:
Question:
18. C. A client refuses to allow an auditor to perform a
particular procedure.
Answer:
Question:
19. D. The financial statements depart from GAAP
Answer:
Question:
20. Audits of financial statements are designed to obtain
reasonable assurance of detecting misstatement due to:
Answer:
Option A
Question:
21. Fraudulent Financial Reporting Misappropriation of
Assets
A. Yes Yes
B. Yes No
C. No Yes
D. No No
Answer:
, Question:
22. Which of the following is one of the elements of AICPA
quality control?
A. Assurance of proper levels of association.
B. Due professional care.
C. Human Resources.
D. Supervision.
Answer:
Human Resources.
Question:
23. An attitude that includes a questioning mind, being alert
to conditions that may indicate possible misstatements,
and a critical assessment of audit evidence is referred to
as:
A. Reasonable assurance.
B. Professional skepticism.
C. Audit neutralism.
D. Auditing mindset.
Answer:
Professional skepticism
Question:
24. Which of the following is a principle underlying an audit
conducted in accordance with generally accepted
auditing standards?
A. The audit provides reasonable assurance the client will
remain in business for at least one year.
B. The audit report expresses an opinion on whether the
financial statements are free of material and immaterial
misstatement.
C. Auditors are responsible for, among other things,
maintaining professional objectivism, exercising
professional engagement, and obtaining appropriate
documentation.
D. An auditor's opinion enhances the degree of
confidence that intended users can place in the financial
statements.
Answer:
An auditor's opinion enhances the degree of confidence that intended users can
place in the financial statements.
CORRECT ANSWERS
Question:
1. Which of the following is not correct relating to the
Sarbanes-Oxley Act?
A. It toughens penalties for corporate fraud.
Answer:
It applies to both public and nonpublic audit clients.
Question:
2. B. It restricts the types of consulting CPAs may perform
for audit clients.
C. It applies to both public and nonpublic audit clients.
D. It eliminates a significant portion of the accounting
profession's system of self-regulation.
Answer:
Question:
3. Which of the following best describes the reason why
independent auditors report on financial statements?
A. A management fraud may exist and it is more likely to
be detected by independent auditors.
B. An audit provides credibility to the financial statements.
C. A misstatement of account balances may exist and is
generally corrected as the result of the independent
auditors' work.
D. Poorly designed internal control may be in existence.
Answer:
An audit provides credibility to the financial statements
Question:
4. A typical objective of an operational audit is for the
auditor to:
A. Determine whether the financial statements fairly
present the entity's operations.
Answer:
Make recommendations for improving performance.
,Question:
5. B. Evaluate the feasibility of attaining the entity's
operational objectives.
Answer:
Question:
6. C. Make recommendations for improving performance.
Answer:
Question:
7. D. Report on the entity's relative success in attaining
profit maximization.
Answer:
Question:
8. International Standards on Auditing are issued by
A. International Standards Board.
Answer:
International Auditing and Assurance Standards Board.
Question:
9. B. International Auditing and Assurance Standards Board.
Answer:
Question:
10. C. Public Company Accounting Oversight Board.
Answer:
Question:
11. D. International Auditing Education Standards Board.
Answer:
Question:
12. Which of the following is not a type of auditors' opinion?
A. Unmodified.
Answer:
Advisory.
Question:
13. B. Qualified.
Answer:
,Question:
14. C. Advisory.
Answer:
Question:
15. D. Disclaimer.
Answer:
Question:
16. An adverse opinion is most likely to be included in an
audit report when:
A. A standard unmodified opinion is necessary.
Answer:
The financial statements depart from GAAP.
Question:
17. B. A public company is involved.
Answer:
Question:
18. C. A client refuses to allow an auditor to perform a
particular procedure.
Answer:
Question:
19. D. The financial statements depart from GAAP
Answer:
Question:
20. Audits of financial statements are designed to obtain
reasonable assurance of detecting misstatement due to:
Answer:
Option A
Question:
21. Fraudulent Financial Reporting Misappropriation of
Assets
A. Yes Yes
B. Yes No
C. No Yes
D. No No
Answer:
, Question:
22. Which of the following is one of the elements of AICPA
quality control?
A. Assurance of proper levels of association.
B. Due professional care.
C. Human Resources.
D. Supervision.
Answer:
Human Resources.
Question:
23. An attitude that includes a questioning mind, being alert
to conditions that may indicate possible misstatements,
and a critical assessment of audit evidence is referred to
as:
A. Reasonable assurance.
B. Professional skepticism.
C. Audit neutralism.
D. Auditing mindset.
Answer:
Professional skepticism
Question:
24. Which of the following is a principle underlying an audit
conducted in accordance with generally accepted
auditing standards?
A. The audit provides reasonable assurance the client will
remain in business for at least one year.
B. The audit report expresses an opinion on whether the
financial statements are free of material and immaterial
misstatement.
C. Auditors are responsible for, among other things,
maintaining professional objectivism, exercising
professional engagement, and obtaining appropriate
documentation.
D. An auditor's opinion enhances the degree of
confidence that intended users can place in the financial
statements.
Answer:
An auditor's opinion enhances the degree of confidence that intended users can
place in the financial statements.
