ACC 441, CH. 1-4 EXAM UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Question:
1. What is a due diligence defense? (Chapter 2)
Answer:
An audit firm must show that it made a reasonable investigation, that the firm
followed auditing standards, and accordingly had reasonable grounds to believe,
and did believe, that the statements certified were true at the date of the
statements and as of the time the registration statement became effective.
Question:
2. The first step in the process to assist the CPA in making
an ethical judgment is _______. (Chapter 2)
Answer:
identify threats to compliance with rules
Question:
3. Which of the following activities is not a prohibited
activity that impairs independence? (Chapter 2)
Answer:
Having a home mortgage from a bank who is an attest client
Question:
4. Private companies, or non-issuers, in the U.S. are ________.
(Chapter 1)
Answer:
not required by the federal government to have financial statement audits
Question:
5. Which of the following provides guidance to all members
of the AICPA with respect to performance of their
professional responsibilities? (Chapter 2)
Answer:
Code of Professional Conduct
Question:
6. Public companies, or issuers, in the U.S. are ________.
(Chapter 1)
Answer:
required by the federal government to have annual financial statement audits
, Question:
7. Compared to an audit of historical financial statements, a
review engagement is _______. (Chapter 1)
Answer:
less extensive and also less expensive
Question:
8. With regard to financial statements, the auditor is
required to obtain reasonable assurance, which is a level
of assurance that is _______. (Chapter 1)
Answer:
high, but not absolute
Question:
9. Within a U.S. context, the applicable financial reporting
framework is typically _______. (Chapter 1)
Answer:
Generally Accepted Accounting Principles (GAAP)
Question:
10. Materiality is a relative concept, and it differs from
company to company and from year to year for a given
company. (Chapter 1)
Answer:
True
Question:
11. The term independent with respect to assurance services
implies that the service is ________. (Chapter 1)
Answer:
performed by someone who was not involved with the creation of the information
Question:
12. Which of the following comes under the purview of the
Public Company Accounting Oversight Board? (Chapter
1)
Answer:
Auditing Standards (AS)
QUESTIONS AND CORRECT ANSWERS
Question:
1. What is a due diligence defense? (Chapter 2)
Answer:
An audit firm must show that it made a reasonable investigation, that the firm
followed auditing standards, and accordingly had reasonable grounds to believe,
and did believe, that the statements certified were true at the date of the
statements and as of the time the registration statement became effective.
Question:
2. The first step in the process to assist the CPA in making
an ethical judgment is _______. (Chapter 2)
Answer:
identify threats to compliance with rules
Question:
3. Which of the following activities is not a prohibited
activity that impairs independence? (Chapter 2)
Answer:
Having a home mortgage from a bank who is an attest client
Question:
4. Private companies, or non-issuers, in the U.S. are ________.
(Chapter 1)
Answer:
not required by the federal government to have financial statement audits
Question:
5. Which of the following provides guidance to all members
of the AICPA with respect to performance of their
professional responsibilities? (Chapter 2)
Answer:
Code of Professional Conduct
Question:
6. Public companies, or issuers, in the U.S. are ________.
(Chapter 1)
Answer:
required by the federal government to have annual financial statement audits
, Question:
7. Compared to an audit of historical financial statements, a
review engagement is _______. (Chapter 1)
Answer:
less extensive and also less expensive
Question:
8. With regard to financial statements, the auditor is
required to obtain reasonable assurance, which is a level
of assurance that is _______. (Chapter 1)
Answer:
high, but not absolute
Question:
9. Within a U.S. context, the applicable financial reporting
framework is typically _______. (Chapter 1)
Answer:
Generally Accepted Accounting Principles (GAAP)
Question:
10. Materiality is a relative concept, and it differs from
company to company and from year to year for a given
company. (Chapter 1)
Answer:
True
Question:
11. The term independent with respect to assurance services
implies that the service is ________. (Chapter 1)
Answer:
performed by someone who was not involved with the creation of the information
Question:
12. Which of the following comes under the purview of the
Public Company Accounting Oversight Board? (Chapter
1)
Answer:
Auditing Standards (AS)
