Chapter 2 Principles of Auditing & Other Assurance Services
Study online at https://quizlet.com/_73y4a3
1. What are the appropriate standard use for audit Nonpublic companies in the
guidance for: United States - AICPA Stan-
dards
Nonpublic companies in the United States
Public Company in the United
Public Company in the United States States - PCAOB Standards
International companies International companies - IAASB
Standards
2. A financial reporting framework is a set of criteria financial statements
used to prepare:
3. An auditor's personal responsibility to maintain a professional skepticism
questioning mind, be alert to conditions that may
indicate possible misstatement due to fraud or er-
ror, and a critical assessment of audit evidence is
called:
4. To obtain reasonable assurance, the auditor plan the work and properly su-
should: pervise assistants
determine and apply appropri-
ate materiality levels throughout
the audit.
5. The auditor's standard of independence is violated holds shares of stock in the com-
when an auditor: pany that he audits
6. The highest authoritative guidance in the GAAS Statements on Auditing Stan-
Hierarchy are: dards
7. Jones, CPA samples a large amount of the clients audit
invoices to reduce the risk that auditors may un-
, Chapter 2 Principles of Auditing & Other Assurance Services
Study online at https://quizlet.com/_73y4a3
knowingly fail to modify the opinion on financial
statements that are materially misstated. This is
known as _______ risk.
8. Auditing standards define unintentional misstate- errors
ments or omissions of amounts or disclosures in
the financial statements as_______.
9. An intentional misstatement of inventory to over- fraud
state net income is considered:
10. Materiality depends on the _______ and the nature dollar amount
of the item.
11. The PCAOB audit "Basis for Opinion" paragraph registration requirements
describes or alludes to: independence requirements
the nature of a PCAOB audit
12. Preparing proper financial statements for the use management
of stockholders and creditors is the responsibility
of _______ .
13. Because of the various types of evidence obtained, financial statements
it is appropriate for the auditors to state they have
audited the _______ of a company.
14. Effective in 2019 (large public companies) and 2020 critical audit
(other public companies) the PCAOB requires the
auditors to present _______ _______ matters in their
report
15. Blane, an auditor for Femi & Co. LLP, has been Auditor's Opinion
asked to draft an auditors' report for Sole Shoes Management's Responsibility
Auditor's Responsibility
, Chapter 2 Principles of Auditing & Other Assurance Services
Study online at https://quizlet.com/_73y4a3
Inc., a nonpublic company. The report should in-
clude:
16. True or false: Generally Accepted Accounting Prin- True
ciples are the most frequently used financial re-
porting framework in the United States.
17. Maria needs to research an issue for a nonpublic FASB Codification
company. Identify which source she is most likely
to search first:
18. A company failed to report in its financial state- adequate disclosure
ments a current lawsuit with a probable negative
outcome that will harm the company. This is a vio-
lation of the _______ concept.
19. When an item in the financial statements is not pre- qualified
sented in accordance with applicable accounting
principles, but not significant or material enough
to overshadow an overall opinion or misstate the
financial statements, the auditor will issue a(n)
_______ opinion.
20. If the auditors deem that the financial statement adverse
are not fairly presented, they will issue a(n) _______
opinion.
21. The concept of using the same accounting princi- consistency
ples from year to year so that the successive finan-
cial statements issued by a business entity will be
comparable is called:
22. audit
Study online at https://quizlet.com/_73y4a3
1. What are the appropriate standard use for audit Nonpublic companies in the
guidance for: United States - AICPA Stan-
dards
Nonpublic companies in the United States
Public Company in the United
Public Company in the United States States - PCAOB Standards
International companies International companies - IAASB
Standards
2. A financial reporting framework is a set of criteria financial statements
used to prepare:
3. An auditor's personal responsibility to maintain a professional skepticism
questioning mind, be alert to conditions that may
indicate possible misstatement due to fraud or er-
ror, and a critical assessment of audit evidence is
called:
4. To obtain reasonable assurance, the auditor plan the work and properly su-
should: pervise assistants
determine and apply appropri-
ate materiality levels throughout
the audit.
5. The auditor's standard of independence is violated holds shares of stock in the com-
when an auditor: pany that he audits
6. The highest authoritative guidance in the GAAS Statements on Auditing Stan-
Hierarchy are: dards
7. Jones, CPA samples a large amount of the clients audit
invoices to reduce the risk that auditors may un-
, Chapter 2 Principles of Auditing & Other Assurance Services
Study online at https://quizlet.com/_73y4a3
knowingly fail to modify the opinion on financial
statements that are materially misstated. This is
known as _______ risk.
8. Auditing standards define unintentional misstate- errors
ments or omissions of amounts or disclosures in
the financial statements as_______.
9. An intentional misstatement of inventory to over- fraud
state net income is considered:
10. Materiality depends on the _______ and the nature dollar amount
of the item.
11. The PCAOB audit "Basis for Opinion" paragraph registration requirements
describes or alludes to: independence requirements
the nature of a PCAOB audit
12. Preparing proper financial statements for the use management
of stockholders and creditors is the responsibility
of _______ .
13. Because of the various types of evidence obtained, financial statements
it is appropriate for the auditors to state they have
audited the _______ of a company.
14. Effective in 2019 (large public companies) and 2020 critical audit
(other public companies) the PCAOB requires the
auditors to present _______ _______ matters in their
report
15. Blane, an auditor for Femi & Co. LLP, has been Auditor's Opinion
asked to draft an auditors' report for Sole Shoes Management's Responsibility
Auditor's Responsibility
, Chapter 2 Principles of Auditing & Other Assurance Services
Study online at https://quizlet.com/_73y4a3
Inc., a nonpublic company. The report should in-
clude:
16. True or false: Generally Accepted Accounting Prin- True
ciples are the most frequently used financial re-
porting framework in the United States.
17. Maria needs to research an issue for a nonpublic FASB Codification
company. Identify which source she is most likely
to search first:
18. A company failed to report in its financial state- adequate disclosure
ments a current lawsuit with a probable negative
outcome that will harm the company. This is a vio-
lation of the _______ concept.
19. When an item in the financial statements is not pre- qualified
sented in accordance with applicable accounting
principles, but not significant or material enough
to overshadow an overall opinion or misstate the
financial statements, the auditor will issue a(n)
_______ opinion.
20. If the auditors deem that the financial statement adverse
are not fairly presented, they will issue a(n) _______
opinion.
21. The concept of using the same accounting princi- consistency
ples from year to year so that the successive finan-
cial statements issued by a business entity will be
comparable is called:
22. audit
