Audit 451 Exam 1 In-Class Review
UPDATED ACTUAL Exam Questions and
CORRECT Answers
The primary reason for an audit by an independent, external audit firm is to? - CORRECT
ANSWER - Provide increased assurance to users as to the fairness of the financial
statements
Which of the following is not an AICPA pronouncement enforceable under the AICPA Code of
Professional Conduct? - CORRECT ANSWER - Statements on Responsibilities in
Personal Consulting Advisory Practice
Pursuant to the AICPA rules of conduct, the auditor's responsibility to the profession is defined
by? - CORRECT ANSWER - The AICPA Code of Professional Conduct
Independent CPAs perform audits on the financial statements of issuers. This type of auditing
can best be described as? - CORRECT ANSWER - A discipline that attests to financial
information presented by management
Through legal precedent, generally accepted auditing standards established by the AICPA apply?
- CORRECT ANSWER - To all CPAs
Who establishes generally accepted auditing standards? - CORRECT ANSWER -
Auditing Standards Board and the Public Company Accounting Oversight Board
Users of an issuer's financial statements demand independent audits because? - CORRECT
ANSWER - Management may not be objective in reporting
Because of the risk of material misstatement, an audit of financial statements in accordance with
generally accepted auditing standards should be planned and performed with an attitude of? -
CORRECT ANSWER - Professional skepticism
, Competence as an independent auditor includes all of the following except? - CORRECT
ANSWER - Warranting the infallibility of the work performed
An audit of the financial statements of Camden Corporation is being conducted by an external
auditor. The external auditor is expected to? - CORRECT ANSWER - Express an opinion
as to the fairness of Camden's financial statements
Notes that are included with financial statements are the responsibility of the? - CORRECT
ANSWER - Company's Management
GAAS require the auditor to be independent. An auditor is independent if (s)he is? - CORRECT
ANSWER - Independent in fact and in appearance
An auditor must obtain professional experience primarily to? - CORRECT ANSWER -
Exercise professional judgement
CPAs within each state have formed state societies or associations of CPAs. Which of the
following statements about these associations is false? - CORRECT ANSWER - All CPAs
in the state must be members of the state association or society
Beth Babett, CPA, is associated with a client's financial statements but is not independent with
respect to that client. If she is requested to perform an audit on the financial statements, she
should? - CORRECT ANSWER - Disclaim an opinion
Which AICPA Conduct Rule applies only to members in the practice of public accounting? -
CORRECT ANSWER - Independence
The AICPA Code of Professional Conduct? - CORRECT ANSWER - Expects the CPA to
honor the public trust
UPDATED ACTUAL Exam Questions and
CORRECT Answers
The primary reason for an audit by an independent, external audit firm is to? - CORRECT
ANSWER - Provide increased assurance to users as to the fairness of the financial
statements
Which of the following is not an AICPA pronouncement enforceable under the AICPA Code of
Professional Conduct? - CORRECT ANSWER - Statements on Responsibilities in
Personal Consulting Advisory Practice
Pursuant to the AICPA rules of conduct, the auditor's responsibility to the profession is defined
by? - CORRECT ANSWER - The AICPA Code of Professional Conduct
Independent CPAs perform audits on the financial statements of issuers. This type of auditing
can best be described as? - CORRECT ANSWER - A discipline that attests to financial
information presented by management
Through legal precedent, generally accepted auditing standards established by the AICPA apply?
- CORRECT ANSWER - To all CPAs
Who establishes generally accepted auditing standards? - CORRECT ANSWER -
Auditing Standards Board and the Public Company Accounting Oversight Board
Users of an issuer's financial statements demand independent audits because? - CORRECT
ANSWER - Management may not be objective in reporting
Because of the risk of material misstatement, an audit of financial statements in accordance with
generally accepted auditing standards should be planned and performed with an attitude of? -
CORRECT ANSWER - Professional skepticism
, Competence as an independent auditor includes all of the following except? - CORRECT
ANSWER - Warranting the infallibility of the work performed
An audit of the financial statements of Camden Corporation is being conducted by an external
auditor. The external auditor is expected to? - CORRECT ANSWER - Express an opinion
as to the fairness of Camden's financial statements
Notes that are included with financial statements are the responsibility of the? - CORRECT
ANSWER - Company's Management
GAAS require the auditor to be independent. An auditor is independent if (s)he is? - CORRECT
ANSWER - Independent in fact and in appearance
An auditor must obtain professional experience primarily to? - CORRECT ANSWER -
Exercise professional judgement
CPAs within each state have formed state societies or associations of CPAs. Which of the
following statements about these associations is false? - CORRECT ANSWER - All CPAs
in the state must be members of the state association or society
Beth Babett, CPA, is associated with a client's financial statements but is not independent with
respect to that client. If she is requested to perform an audit on the financial statements, she
should? - CORRECT ANSWER - Disclaim an opinion
Which AICPA Conduct Rule applies only to members in the practice of public accounting? -
CORRECT ANSWER - Independence
The AICPA Code of Professional Conduct? - CORRECT ANSWER - Expects the CPA to
honor the public trust
