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Chapter 2- Audit Theory and Practice |
UPDATE|COMPREHENSIVE MOST TESTED
QUESTIONS AND VERIFIED
SOLUTIONS|GET IT 100% ACCURATE!!
Generally accepted accounting principles (GAAP) are distinguished from generally
accepted auditing standards (GAAS) in that:
A) GAAP are the principles for presentation of financial statements and
underlying transactions, while GAAS are the standards auditors should follow
when conducting an audit.
B) GAAP are the principles auditors follow when conducting an audit, while GAAS
are the standards for presentation of financial statements and underlying
transactions.
C) GAAP are promulgated by the SEC, while GAAS are promulgated by the FASB.
D) When GAAP are violated, sufficiently strong GAAS may make up for most
GAAP deficiencies. - (ANSWER).A) GAAP are the principles for presentation of
financial statements and underlying transactions, while GAAS are the standards
auditors should follow when conducting an audit.
In situation in which GAAS do not provide "hard and fast rules," they provide
subjective guidance which allows auditors to:
A) Tailor their audit to procedures requested by management.
B) Only apply those standards that are important to the audit.
C) Accurately interpret the profession's Code of Professional Conduct.
D) Use adequate professional judgment when applying the standards. -
(ANSWER)D) Use adequate professional judgment when applying the standards.
, 2
The Sarbanes-Oxley Act requires that auditors of certain large publicly traded
companies in the United States perform an integrated audit that includes
providing an audit report on a company's internal control and which of the
following?
A) Financial statements and compliance with laws and regulations.
B) Financial statements.
C) Compliance with laws and regulations
D) Neither financial statements nor compliance with laws and regulations. -
(ANSWER)B) Financial statements
Which of the following is not an underlying premise of an audit relating to
management's responsibility to provide an auditor?
A) Provide all information relevant to the preparation and fair presentation of the
financial statements.
B) Provide any additional information requested by the auditor.
C) Provide inner-connectivity to all operational databases used during the
previous three year period.
D) Provide unrestricted access to those within the entity whom the auditor
determines it necessary to obtain audit evidence. - (ANSWER)C) Provide inner-
connectivity to all operational databases used during the previous three year
period.
The auditors provide an opinion on whether the financial statements are
presented in accordance with the:
Chapter 2- Audit Theory and Practice |
UPDATE|COMPREHENSIVE MOST TESTED
QUESTIONS AND VERIFIED
SOLUTIONS|GET IT 100% ACCURATE!!
Generally accepted accounting principles (GAAP) are distinguished from generally
accepted auditing standards (GAAS) in that:
A) GAAP are the principles for presentation of financial statements and
underlying transactions, while GAAS are the standards auditors should follow
when conducting an audit.
B) GAAP are the principles auditors follow when conducting an audit, while GAAS
are the standards for presentation of financial statements and underlying
transactions.
C) GAAP are promulgated by the SEC, while GAAS are promulgated by the FASB.
D) When GAAP are violated, sufficiently strong GAAS may make up for most
GAAP deficiencies. - (ANSWER).A) GAAP are the principles for presentation of
financial statements and underlying transactions, while GAAS are the standards
auditors should follow when conducting an audit.
In situation in which GAAS do not provide "hard and fast rules," they provide
subjective guidance which allows auditors to:
A) Tailor their audit to procedures requested by management.
B) Only apply those standards that are important to the audit.
C) Accurately interpret the profession's Code of Professional Conduct.
D) Use adequate professional judgment when applying the standards. -
(ANSWER)D) Use adequate professional judgment when applying the standards.
, 2
The Sarbanes-Oxley Act requires that auditors of certain large publicly traded
companies in the United States perform an integrated audit that includes
providing an audit report on a company's internal control and which of the
following?
A) Financial statements and compliance with laws and regulations.
B) Financial statements.
C) Compliance with laws and regulations
D) Neither financial statements nor compliance with laws and regulations. -
(ANSWER)B) Financial statements
Which of the following is not an underlying premise of an audit relating to
management's responsibility to provide an auditor?
A) Provide all information relevant to the preparation and fair presentation of the
financial statements.
B) Provide any additional information requested by the auditor.
C) Provide inner-connectivity to all operational databases used during the
previous three year period.
D) Provide unrestricted access to those within the entity whom the auditor
determines it necessary to obtain audit evidence. - (ANSWER)C) Provide inner-
connectivity to all operational databases used during the previous three year
period.
The auditors provide an opinion on whether the financial statements are
presented in accordance with the:
