ACC 409 Practice Exam Multiple Choice
With Complete Solutions
Which one of the following organizations is recognized for providing guidance
on a framework for internal control? - ANSWER COSO
Which phase of the audit opinion formulation process is most commonly thought
of as auditing by the general public?
Performing risk assessment.
Obtaining evidence about internal controls
.
Obtaining substantive evidence about accounts
.
Making reporting decisions. - ANSWER obtaining substantive evidence about
accounts
Which one of the following is not a management expectation for independent
auditors?
An outside source of expertise on accounting matters.
Individuals who perform tests and draw conclusions on assertions.
A participant in management decision making.
A provider of a written communication. - ANSWER A participant in management
decision making.
Why is auditing important in a free market society?
The public requires auditors to function as divisions of regulatory bodies.
Auditors detect all errors and fraud perpetrated by company employees.
,It provides reliable information upon which to judge economic performance.
The auditor is an amiable insurance policy for investors.
All of the above are true. - ANSWER It provides reliable information upon which
to judge economic performance.
Which governing board performs quality reviews on registered audit firms that
audit public companies? - ANSWER PCAOB
What is the primary ofjective of the independent auditor's report on financial
statements?
To report on all instances of fraud.
To assist the board in evaluating management's
effectiveness.
To attest to the credit-worthiness of the client.
To give credibility to management's prepared financial statements. - ANSWER
To give credibility to management's prepared financial statements.
What is the first phase in an audit? - ANSWER client acceptance or client
continuance
What is the management of a company responsible for? - ANSWER preparing the
financial statements
The Center for Audit Quality is dedicated to enhancing investor confidence in
what? - ANSWER the financial markets
Which of the following is a driver of audit quality?
Audit firm culture.
Engagement team skills and attributes.
Factors outside control of auditors.
Investor requirements.
A, B, and C only. - ANSWER Audit firm culture.
Engagement team skills and attributes.
, Factors outside control of auditors.
The criteria against which the auditor measures the fairness of financial
statement presentation are known as - ANSWER generally accepted accounting
principles.
Which one of the following is not a key attribute needed to perform assurance?
accounting skills
independence
subject matter knowledge
established criteria or standards - ANSWER accounting skills
A service provided by practitioners that always involves a report that goes to a
third party is
Both B and C.
attestation
audit
assurance - ANSWER audit and attestation
Independent professional services that are provided on financial or other
information that improve the quality of decision making are known as - ANSWER
assurance services
Internal auditors may perform all of the following types of audits except
operational audits.
computer system audits.
compliance audits.
all of the above may be performed by internal auditors. - ANSWER operational
audits.
computer system audits.
compliance audits.
An expectation of the public is that the auditor will recognize that the primary
users of audit assurance are - ANSWER third party users
With Complete Solutions
Which one of the following organizations is recognized for providing guidance
on a framework for internal control? - ANSWER COSO
Which phase of the audit opinion formulation process is most commonly thought
of as auditing by the general public?
Performing risk assessment.
Obtaining evidence about internal controls
.
Obtaining substantive evidence about accounts
.
Making reporting decisions. - ANSWER obtaining substantive evidence about
accounts
Which one of the following is not a management expectation for independent
auditors?
An outside source of expertise on accounting matters.
Individuals who perform tests and draw conclusions on assertions.
A participant in management decision making.
A provider of a written communication. - ANSWER A participant in management
decision making.
Why is auditing important in a free market society?
The public requires auditors to function as divisions of regulatory bodies.
Auditors detect all errors and fraud perpetrated by company employees.
,It provides reliable information upon which to judge economic performance.
The auditor is an amiable insurance policy for investors.
All of the above are true. - ANSWER It provides reliable information upon which
to judge economic performance.
Which governing board performs quality reviews on registered audit firms that
audit public companies? - ANSWER PCAOB
What is the primary ofjective of the independent auditor's report on financial
statements?
To report on all instances of fraud.
To assist the board in evaluating management's
effectiveness.
To attest to the credit-worthiness of the client.
To give credibility to management's prepared financial statements. - ANSWER
To give credibility to management's prepared financial statements.
What is the first phase in an audit? - ANSWER client acceptance or client
continuance
What is the management of a company responsible for? - ANSWER preparing the
financial statements
The Center for Audit Quality is dedicated to enhancing investor confidence in
what? - ANSWER the financial markets
Which of the following is a driver of audit quality?
Audit firm culture.
Engagement team skills and attributes.
Factors outside control of auditors.
Investor requirements.
A, B, and C only. - ANSWER Audit firm culture.
Engagement team skills and attributes.
, Factors outside control of auditors.
The criteria against which the auditor measures the fairness of financial
statement presentation are known as - ANSWER generally accepted accounting
principles.
Which one of the following is not a key attribute needed to perform assurance?
accounting skills
independence
subject matter knowledge
established criteria or standards - ANSWER accounting skills
A service provided by practitioners that always involves a report that goes to a
third party is
Both B and C.
attestation
audit
assurance - ANSWER audit and attestation
Independent professional services that are provided on financial or other
information that improve the quality of decision making are known as - ANSWER
assurance services
Internal auditors may perform all of the following types of audits except
operational audits.
computer system audits.
compliance audits.
all of the above may be performed by internal auditors. - ANSWER operational
audits.
computer system audits.
compliance audits.
An expectation of the public is that the auditor will recognize that the primary
users of audit assurance are - ANSWER third party users
