ACCT 4421 Ch 11 & 12 SB UPDATED
ACTUAL Exam Questions and CORRECT
Answers
True or false: Only CPAs can be required to follow Generally Accepted Auditing Standards for
the audits they conduct. - CORRECT ANSWER - False
[Reason: State and federal auditors may also be required to follow GAAS, whether or not they
are CPAs.]
The written memorandum specifying the scope for work to be done as well as the auditing
standards to be applied is called a(n) ______. - CORRECT ANSWER - engagement letter
The audit report will contain a formal opinion stating which of the following? - CORRECT
ANSWER - auditor conclusions regarding fair presentation of the audited financial
statements
Generally accepted government auditing standards (GAGAS) are set forth in the publication
Government Auditing Standards which is referred to as the ______. - CORRECT
ANSWER - yellow book
An engagement letter between the auditor and the organization should clearly specify which of
the following? - CORRECT ANSWER - - the type of audit to be performed
- the auditing standards that will be followed
When performing government audits, CPAs are professionally and ethically obligated to follow
generally accepted auditing standards (GAAS) by which of the following? - CORRECT
ANSWER - Compliance with Standards Rule of the AICPA's Code of Professional
Conduct
, A written record of the agreement, the engagement letter, is essential for the protection of which
party or parties? - CORRECT ANSWER - both parties
GAGAS requirements use the word must to indicate what type of requirement? - CORRECT
ANSWER - unconditional requirement
The basic elements of the standard GAAS report include which of the following? - CORRECT
ANSWER - - a title that includes the word independent
- the signature of the auditor
- a section with the heading "Opinion"
______ is the act of using or expending resources carelessly, extravagantly, or to no purpose and
relates primarily to mismanagement, inappropriate actions, and inadequate oversight. -
CORRECT ANSWER - Waste
Which of the following are true of generally accepted government auditing standards (GAGAS)?
- CORRECT ANSWER - - GAGAS may apply to governments that receive federal funds.
- GAGAS may be required by contract.
- GAGAS may be required by statute or ordinance.
Internal auditors or state audit agencies often conduct ______. - CORRECT ANSWER -
performance audits
The fundamental ethical principles identified by GAGAS include which of the following? -
CORRECT ANSWER - - public interest
- integrity
ACTUAL Exam Questions and CORRECT
Answers
True or false: Only CPAs can be required to follow Generally Accepted Auditing Standards for
the audits they conduct. - CORRECT ANSWER - False
[Reason: State and federal auditors may also be required to follow GAAS, whether or not they
are CPAs.]
The written memorandum specifying the scope for work to be done as well as the auditing
standards to be applied is called a(n) ______. - CORRECT ANSWER - engagement letter
The audit report will contain a formal opinion stating which of the following? - CORRECT
ANSWER - auditor conclusions regarding fair presentation of the audited financial
statements
Generally accepted government auditing standards (GAGAS) are set forth in the publication
Government Auditing Standards which is referred to as the ______. - CORRECT
ANSWER - yellow book
An engagement letter between the auditor and the organization should clearly specify which of
the following? - CORRECT ANSWER - - the type of audit to be performed
- the auditing standards that will be followed
When performing government audits, CPAs are professionally and ethically obligated to follow
generally accepted auditing standards (GAAS) by which of the following? - CORRECT
ANSWER - Compliance with Standards Rule of the AICPA's Code of Professional
Conduct
, A written record of the agreement, the engagement letter, is essential for the protection of which
party or parties? - CORRECT ANSWER - both parties
GAGAS requirements use the word must to indicate what type of requirement? - CORRECT
ANSWER - unconditional requirement
The basic elements of the standard GAAS report include which of the following? - CORRECT
ANSWER - - a title that includes the word independent
- the signature of the auditor
- a section with the heading "Opinion"
______ is the act of using or expending resources carelessly, extravagantly, or to no purpose and
relates primarily to mismanagement, inappropriate actions, and inadequate oversight. -
CORRECT ANSWER - Waste
Which of the following are true of generally accepted government auditing standards (GAGAS)?
- CORRECT ANSWER - - GAGAS may apply to governments that receive federal funds.
- GAGAS may be required by contract.
- GAGAS may be required by statute or ordinance.
Internal auditors or state audit agencies often conduct ______. - CORRECT ANSWER -
performance audits
The fundamental ethical principles identified by GAGAS include which of the following? -
CORRECT ANSWER - - public interest
- integrity
