Audit Exam 1 UPDATED ACTUAL Exam
Questions and CORRECT Answers
True - CORRECT ANSWER - Although independent audits of today place more emphasis
on sampling than did the audits of the 19th century, in increasing circumstances, changes in
information technology are again making possible audits of aspects of all transactions in large
populations.
True. False.
A summary of findings rather than assurance is most likely to be included in a(n): - CORRECT
ANSWER - Agreed upon procedures report
Information Risk - CORRECT ANSWER - The risk that a company's financial statements
will materially depart from generally accepted accounting principles is referred to as: a) business
risk
b) information risk
c) detection risk
d) document risk
Attest Function - CORRECT ANSWER - Includes the preparation of a report of the CPA's
findings.
Review of financial statements - CORRECT ANSWER - Is substantially less in scope of
procedures than an audit
review - CORRECT ANSWER - Inquiries and analytical procedures ordinarily form the
basis for which type of engagement? a) agreed upon procedures
b) audit
c)Examination
d) review
, b) only financial statement - CORRECT ANSWER - An integrated audit performed under
the sarbanes-oxley act requires that auditors provide opinions on:
a) Financial statements and law compliance
b) only financial statements
c) only law compliance
d) neither
AICPA (American Institute of Certified Public Accountants) - CORRECT ANSWER -
Prepares the CPA exam
FASAB (Federal Accounting Standards Advisory Board) - CORRECT ANSWER -
Develops accounting standards for the U.S. Government
FASB (Financial Accounting Standards Board) - CORRECT ANSWER - Develops
accounting standards for public and nonpublic companies
GASB (Governmental Accounting Standards Board) - CORRECT ANSWER - Improves
standards of financial accounting for state and local government entities
PCAOB (Public Company Accounting Oversight Board) - CORRECT ANSWER - Issues
auditing standards for public companies
State Boards of Accountancy - CORRECT ANSWER - Issues CPA Certificates
What events led up to the Sarbanes-Oxley Act of 2002 - CORRECT ANSWER -
Misstatements of financial statements. Aurthur Andersen destroyed evidence
What major reforms did the Sarbanes-Oxley Act of 2002 - CORRECT ANSWER -
tougher penalties for fraud. creation of the PCAOB
Questions and CORRECT Answers
True - CORRECT ANSWER - Although independent audits of today place more emphasis
on sampling than did the audits of the 19th century, in increasing circumstances, changes in
information technology are again making possible audits of aspects of all transactions in large
populations.
True. False.
A summary of findings rather than assurance is most likely to be included in a(n): - CORRECT
ANSWER - Agreed upon procedures report
Information Risk - CORRECT ANSWER - The risk that a company's financial statements
will materially depart from generally accepted accounting principles is referred to as: a) business
risk
b) information risk
c) detection risk
d) document risk
Attest Function - CORRECT ANSWER - Includes the preparation of a report of the CPA's
findings.
Review of financial statements - CORRECT ANSWER - Is substantially less in scope of
procedures than an audit
review - CORRECT ANSWER - Inquiries and analytical procedures ordinarily form the
basis for which type of engagement? a) agreed upon procedures
b) audit
c)Examination
d) review
, b) only financial statement - CORRECT ANSWER - An integrated audit performed under
the sarbanes-oxley act requires that auditors provide opinions on:
a) Financial statements and law compliance
b) only financial statements
c) only law compliance
d) neither
AICPA (American Institute of Certified Public Accountants) - CORRECT ANSWER -
Prepares the CPA exam
FASAB (Federal Accounting Standards Advisory Board) - CORRECT ANSWER -
Develops accounting standards for the U.S. Government
FASB (Financial Accounting Standards Board) - CORRECT ANSWER - Develops
accounting standards for public and nonpublic companies
GASB (Governmental Accounting Standards Board) - CORRECT ANSWER - Improves
standards of financial accounting for state and local government entities
PCAOB (Public Company Accounting Oversight Board) - CORRECT ANSWER - Issues
auditing standards for public companies
State Boards of Accountancy - CORRECT ANSWER - Issues CPA Certificates
What events led up to the Sarbanes-Oxley Act of 2002 - CORRECT ANSWER -
Misstatements of financial statements. Aurthur Andersen destroyed evidence
What major reforms did the Sarbanes-Oxley Act of 2002 - CORRECT ANSWER -
tougher penalties for fraud. creation of the PCAOB
