Solutions with Test Bank for AuditingThe Art and Science of Assurance Engagements, 16th Canadian Edition by Arens.pdf

,DOWNLOAD THE Test Bank for Auditing and Assurance Services 16th Edition Arens
m m m m m m m m m m m




AuditingmandmAssurancemServices,m16em(Arens/Elder/Beasley)mCha
pterm2m ThemCPA mProfession

2.1 LearningmObjectivem2-1

1) Themlegalmright mtomperformmauditsmismgranted mtomamCPA mfirmmbymregulationmof
A) eachmstate.
B) themFinancialmAccountingmStandardsmBoard m(FASB).
C) themAmericanmInstitutemof mCertified mPublicmAccountantsm(AICPA).
D) themAuditingmStandardsmBoard
.mAnswer:m A
Terms:m Legalmrightsmtomperformmauditsm
Diff:m Moderate
Objective:m LO m2-1
AACSB:m Reflectivemthinking

2) Whichmof mthemfollowingmismnotmamcharacteristicmof mamsmallmfirm?
A) Most msmallmfirmsmhavemfewermthanm25mprofessionals.
B) Smallmfirmsmperformmauditsmonmsmallmand mnot-for-profit mbusinesses.
C) Taxmservicesmaremmoremimportant mthanmauditingmservicesmtomthemsmallmfirm.
D) Smallmfirmsmaremprohibited mbymthemSECmfrommauditingmpubliclymtraded mcompanie
s.mAnswer:m D
Terms:m Characteristicsmof mamsmallmfirmm
Diff:m Moderate
Objective:m LO m2-1
AACSB:m Reflectivemthinking

3) Sarbanes-
Oxleymand mthemSecuritiesmand mExchangemCommissionm restrict mauditorsmfrommprovidingmmanymcon
sultingmservicesmtomtheir mpubliclymtraded maudit mclients.mWhichmof mthemfollowingmismtruemformaudito
rsmof mpubliclymtraded mcompanies?
I. Theymaremrestricted mfrommprovidingmconsultingmservicesmtomprivatelymheld mcompanies.
II. Theremismnomrestrictionmonmprovidingmconsultingmservicesmtomnon-audit mclients.
A) I monly
B) II monly
C) I mand mII
D) NeithermI mnormI
I mAnswer:m B
Terms:m Sarbanes-
Oxleymand mSecuritiesmExchangemCommissionmrestrictionsmDiff:m Moderate
Objective:m LO m2-1
AACSB:m ReflectivemthinkingmTopi
c:m SOX




1
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c.
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,DOWNLOAD THE Test Bank for Auditing and Assurance Services 16th Edition Arens
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4) Whichmof mthemfollowingmdoesmnotmdescribemamsizemcategorymformamCPA mfirm?
A) BigmFourmnationalmfirms
B) BigmFourminternationalmfirms
C) localmfirms
D) nationalmand mregionalmfirm
smAnswer:m A
Terms:m Threemcategoriesmformdescribingmsizemof maudit mfirm
smDiff:m Easy
Objective:m LO m2-1
AACSB:m Reflectivemthinking

5) ismonemof mthemBigmFourminternationalmCPA mfirms.
A) Deloitte
B) KPMG
C) Ernst m&mYoung
D) Allmof mthemabovemaremclassified masmBigmFourminternationalmCPA mfirm
s.mAnswer:m D
Terms:m Threemcategoriesmformdescribingmsizemof maudit mfirm
smDiff:m Moderate
Objective:m LO m2-1
AACSB:m Reflectivemthinking

6) Inmwhichmtypemof mservicemdoesmthemCPA massemblemthemfinancialmstatementsmbut mprovidem
nomassurancemtomthird mparties?
A) audit
B) compilation
C) review
D) bookkeeping
mAnswer:m B

Terms:m Compilation
mDiff:m ModeratemOb

jective:m LOm2-1
AACSB:m Reflectivemthinking

7) Inmadditionmtomattestationmand massurancemservices,mCPA mfirmsmprovidemothermservicesmtomth
eirmclients.mList mthreemof mthesemservices.
Answer:m Othermservicesmperformed mbymamCPA mfirmminclude:
• accountingmand mbookkeepingmservices
• taxmservices
• management mconsultingmand mriskmadvisorymservices
.mTerms:m Activitiesmof mCPA mfirms
Diff:m ModeratemObj
ective:m LO m2-1
AACSB:m Reflectivemthinking




2
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c.
mynursytest.store

, DOWNLOAD THE Test Bank for Auditing and Assurance Services 16th Edition Arens
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8) Manymsmall,mlocalmaccountingmfirmsmperformmauditsmasmtheirmprimarymservicemtomtheirmclien
ts.mAnswer:m FALSE
Terms:m Smallmaccountingmfirmsmdomnot mperformmaudit
smDiff:m Easy
Objective:m LO m2-1
AACSB:m Reflectivemthinking

9) Sarbanes-
Oxleymand mthemSecuritiesmand mExchangemCommissionmrestrict mauditorsmfrommprovidingmmanymcon
sultingmservicesmtomtheirmpubliclymtraded maudit mclients.
Answer:m TRUE
Terms:m Sarbanes-
Oxleymand mSecuritiesmExchangemCommissionmrestrictionsmDiff:m Easy
Objective:m LO m2-1
AACSB:m ReflectivemthinkingmTopi
c:m SOX

2.2 LearningmObjectivem2-2

1) Whichmof mthemfollowingmstatementsmismtruemasmit mrelatesmtomlimited mliabilitympartnerships?
A) Onlymseniormpartnersmaremliablemformthempartnershipsmdebts.
B) Partnersmhavemnomliabilityminmamlimited mliabilitympartnership marrangement.
C) Partnersmarempersonallymliablemformthemactsmof mthosemundermtheirmsupervision.
D) Allmpartnersmmust mbemAICPA mmembers
.mAnswer:m C
Terms:m Limited mliabilitympartnershipsm
Diff:m Challenging
Objective:m LO m2-2
AACSB:m Reflectivemthinking

2) Whichmstaff mlevelminmamCPA mfirmmperformsmmost mof mthemdetailed maudit mwork?
A) partner
B) staff massistant
C) seniormauditor
D) seniormmanage
rmAnswer:m B
Terms:m Staff mlevelsminmCPA mfirmm
Diff:m Easy
Objective:m LO m2-2
AACSB:m Reflectivemthinking




3
Copyright m©m2017 mPearson mEducation,mIn
c.
mynursytest.store