Test Bank for Principles of Auditing and Other
l# l# l# l# l# l# l#
Assurance Services 22nd Edition by Ray
l# l# l# l# l# l# l#
l# Whittington, Kurt Pany
l# l#
Version 1
l#1
,Full Test Bank for Principles of Auditing and Other Assurance Services
l# l# l# l# l# l# l# l# l# l#
22nd Edition by Ray Whittington, Kurt Pany
l# l# l# l# l# l# l#
Answers are at the end of each chapter
l# l# l# l# l# l# l#
l# Chapter 1 l#
Student name:_ l#
1) Accountants l#are l#regulated l#by l#a l#variety l#of l#organizations. l#Match l#the
l#statements l#with l#the l#most l#directly l#related l#organization:
● Accounting l#and l#Review l#Services l#Committee.
● American l#Institute l#of l#Certified l#Public l#Accountants.
● Auditing l#Standards l#Board.
● Federal l#Accounting l#Standards l#Advisory l#Board.
● Financial l#Accounting l#Standards l#Board.
● General l#Accounting l#Office.
● Government l#Accounting l#Standards l#Board.
● Public l#Company l#Accounting l#Oversight l#Board.
● Securities l#and l#Exchange l#Commission.
● State l#Boards l#of l#Accountancy.
Organizations l#may l#be l#used l#once, l#more l#than l#once, l#or l#not l#at l# all.
Statements Organizations
A. l#Develops l#accounting l#standards
for l#public l#and l#nonpublic l#companies.
B. l#Develops l#accounting l#standards l#for l#the
l#U.S. l#Government.
C. l#Improves l#standards l#of l#financial
l#accounting l#for l#state l#and l#local
government l#entities.
D. l#Issues l#auditing l#standards l#for
public l#companies.
E. l#Issues l#CPA l#certificates.
F. l#Prepares l#the l#CPA l#exam.
Organizations: l#American l#Institute l#of l#Certified l#Public l#Accountants, l#Federal
l#Accounting l#Standards l#Advisory l#Board, l#Financial l#Accounting l#Standards l#Board,
l#Government l#Accounting l#Standards l#Board, l#Public l#Company l#Accounting
l#Oversight l#Board, l#State l#Boards l#of l#Accountancy.
Version 2
l#1
,2) The l#Sarbanes-Oxley l#Act l#of l#2002 l#made l#significant l#reforms l#for l#public
l#companies l#and l#their l#auditors.
a. Describe l#the l#events l#that l#led l#up l#to l#the l#passage l#of l#the l#Act.
b. Describe l#the l#major l#changes l#made l#by l#the l#Act.
3) Many l#people l#confuse l#the l#responsibilities l#of l#the l#independent l#auditors
l#and l#the l#client's l#management l#with l#respect l#to l#audited l#financial l#statements.
a. Describe l#management's l#responsibility l#regarding l#audited l#financial l#statements.
b. Describe l#the l#independent l#auditors' l#responsibility l#regarding l#audited l#financial
l#statements.
c. Evaluate l#the l#following l#statement: l#"If l#the l#auditors l#disagree l#with
l#management l#regarding l#an l#accounting l#principle l#used l#in l#the l#financial
l#statements, l#the l#auditors l#should l#express l#their l#views l#in l#the l#notes l#to l#the
l#financial l#statements."
4) An l#investor l#is l#considering l#investing l#in l#one l#of l#two l#companies. l#The
l#companies l#have l#very l#similar l#reported l#financial l#position l#and l#results l#of
l#operations. l#However, l#only l#one l#of l#the l#companies l#has l#its l#financial l#statements
l#audited.
a. Describe l#what l#creates l#the l#demand l#for l#an l#audit l#in l#this l#situation. l#Include l#a
l#discussion l#of l#how l#audited l#financial l#statements l#facilitate l#this l#investment
l#transaction, l#and l#the l#effect l#of l#the l#audit l#on l#business l#risk l#and l#information l#risk.
b. Identify l#the l#potential l#consequences l#to l#the l#company l#of l#not l#having l#its
l#financial l#statements l#audited.
5) A l#summary l#of l#findings l#rather l#than l#assurance l#is l#most l# likely l#to l#be l#included l#in
l#a(n):
Version 3
l#1
, A) Agreed-upon l#procedures l#report.
B) Compilation l#report.
C) Audit l#report.
D) Review l#report.
Version 4
l#1
l# l# l# l# l# l# l#
Assurance Services 22nd Edition by Ray
l# l# l# l# l# l# l#
l# Whittington, Kurt Pany
l# l#
Version 1
l#1
,Full Test Bank for Principles of Auditing and Other Assurance Services
l# l# l# l# l# l# l# l# l# l#
22nd Edition by Ray Whittington, Kurt Pany
l# l# l# l# l# l# l#
Answers are at the end of each chapter
l# l# l# l# l# l# l#
l# Chapter 1 l#
Student name:_ l#
1) Accountants l#are l#regulated l#by l#a l#variety l#of l#organizations. l#Match l#the
l#statements l#with l#the l#most l#directly l#related l#organization:
● Accounting l#and l#Review l#Services l#Committee.
● American l#Institute l#of l#Certified l#Public l#Accountants.
● Auditing l#Standards l#Board.
● Federal l#Accounting l#Standards l#Advisory l#Board.
● Financial l#Accounting l#Standards l#Board.
● General l#Accounting l#Office.
● Government l#Accounting l#Standards l#Board.
● Public l#Company l#Accounting l#Oversight l#Board.
● Securities l#and l#Exchange l#Commission.
● State l#Boards l#of l#Accountancy.
Organizations l#may l#be l#used l#once, l#more l#than l#once, l#or l#not l#at l# all.
Statements Organizations
A. l#Develops l#accounting l#standards
for l#public l#and l#nonpublic l#companies.
B. l#Develops l#accounting l#standards l#for l#the
l#U.S. l#Government.
C. l#Improves l#standards l#of l#financial
l#accounting l#for l#state l#and l#local
government l#entities.
D. l#Issues l#auditing l#standards l#for
public l#companies.
E. l#Issues l#CPA l#certificates.
F. l#Prepares l#the l#CPA l#exam.
Organizations: l#American l#Institute l#of l#Certified l#Public l#Accountants, l#Federal
l#Accounting l#Standards l#Advisory l#Board, l#Financial l#Accounting l#Standards l#Board,
l#Government l#Accounting l#Standards l#Board, l#Public l#Company l#Accounting
l#Oversight l#Board, l#State l#Boards l#of l#Accountancy.
Version 2
l#1
,2) The l#Sarbanes-Oxley l#Act l#of l#2002 l#made l#significant l#reforms l#for l#public
l#companies l#and l#their l#auditors.
a. Describe l#the l#events l#that l#led l#up l#to l#the l#passage l#of l#the l#Act.
b. Describe l#the l#major l#changes l#made l#by l#the l#Act.
3) Many l#people l#confuse l#the l#responsibilities l#of l#the l#independent l#auditors
l#and l#the l#client's l#management l#with l#respect l#to l#audited l#financial l#statements.
a. Describe l#management's l#responsibility l#regarding l#audited l#financial l#statements.
b. Describe l#the l#independent l#auditors' l#responsibility l#regarding l#audited l#financial
l#statements.
c. Evaluate l#the l#following l#statement: l#"If l#the l#auditors l#disagree l#with
l#management l#regarding l#an l#accounting l#principle l#used l#in l#the l#financial
l#statements, l#the l#auditors l#should l#express l#their l#views l#in l#the l#notes l#to l#the
l#financial l#statements."
4) An l#investor l#is l#considering l#investing l#in l#one l#of l#two l#companies. l#The
l#companies l#have l#very l#similar l#reported l#financial l#position l#and l#results l#of
l#operations. l#However, l#only l#one l#of l#the l#companies l#has l#its l#financial l#statements
l#audited.
a. Describe l#what l#creates l#the l#demand l#for l#an l#audit l#in l#this l#situation. l#Include l#a
l#discussion l#of l#how l#audited l#financial l#statements l#facilitate l#this l#investment
l#transaction, l#and l#the l#effect l#of l#the l#audit l#on l#business l#risk l#and l#information l#risk.
b. Identify l#the l#potential l#consequences l#to l#the l#company l#of l#not l#having l#its
l#financial l#statements l#audited.
5) A l#summary l#of l#findings l#rather l#than l#assurance l#is l#most l# likely l#to l#be l#included l#in
l#a(n):
Version 3
l#1
, A) Agreed-upon l#procedures l#report.
B) Compilation l#report.
C) Audit l#report.
D) Review l#report.
Version 4
l#1
