Test bank for principles of auditing and other assurance services 22nd edition by ray whittington

Full Test Bank for Principles of Auditing and Other Assurance Services 22nd
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Edition by Ray Whittington, Kurt Pany
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Answers are at the end of each chapter C
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hapter 1 m




Student name:_
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1) Accountantsmaremregulatedmbymamvarietymofmorganizations.mMatchmthemstatementsmwithmt
hemmostm directlymrelatedmorganization:
● AccountingmandmReviewmServicesmCommittee.
● AmericanmInstitutemofmCertifiedmPublicmAccountants.
● AuditingmStandardsmBoard.
● FederalmAccountingmStandardsmAdvisorymBoard.
● FinancialmAccountingmStandardsmBoard.
● GeneralmAccountingmOffice.
● GovernmentmAccountingmStandardsmBoard.
● PublicmCompanymAccountingmOversightmBoard.
● SecuritiesmandmExchangemCommission.
● StatemBoardsmofmAccountancy.
Organizationsmmaymbemusedmonce,mmoremthanmonce,mormnotmatm all.
Statements Organizations
A.mDevelopsmaccountingmstandards
formpublicmandmnonpublicmc
ompanies.
B.mDevelopsmaccountingmstandardsmf
ormthemU.S.mGovernment.
C.mImprovesmstandardsmofmfinancialmac
countingmformstatemandmlocal
governmentmentities.
D.mIssuesmauditingmstandardsmformpu
blicmcompanies.
E.mIssuesmCPAmcertificates.

F.mPreparesmthemCPAmexam.

Organizations:mAmericanmInstitutemofmCertifiedmPublicmAccountants,mFederalmAccountingmStand
ardsmAdvisorymBoard,mFinancialmAccountingmStandardsmBoard,mGovernmentmAccountingmStandar
dsmBoard,mPublicmCompanymAccountingmOversightmBoard,mStatemBoardsmofmAccountancy.




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,2) ThemSarbanes-
OxleymActmofm2002mmademsignificantmreformsmformpublicmcompaniesmandmtheirmauditors.
a. DescribemthemeventsmthatmledmupmtomthempassagemofmthemAct.
b. DescribemthemmajormchangesmmadembymthemAct.




3) Manympeoplemconfusemthemresponsibilitiesmofmthemindependentmauditorsmandmthemclien
t'smmanagementm withmrespectmtom auditedm financialmstatements.
a. Describemmanagement'smresponsibilitymregardingmauditedmfinancialmstatements.
b. Describemthemindependentmauditors'mresponsibilitymregardingmauditedmfinancialmstatements.
c. Evaluatemthemfollowingmstatement:m"Ifmthemauditorsmdisagreemwithmmanagementmregardingm
anmaccountingmprinciplemusedminmthemfinancialmstatements,mthemauditorsmshouldmexpressmtheirmvie
wsminmthemnotesmtomthemfinancialmstatements."


4) Anminvestormismconsideringminvestingminmonemofmtwomcompanies.mThemcompaniesmhavemver
ymsimilarmreportedmfinancialmpositionmandmresultsmofmoperations.mHowever,monlymonemofmthemcomp
aniesmhasmitsmfinancialmstatementsmaudited.
a. Describemwhatmcreatesmthemdemandmformanmauditminmthismsituation.mIncludemamdiscussionmofmh
owmauditedmfinancialmstatementsmfacilitatemthisminvestmentmtransaction,mandmthemeffectmofmthemaud
itmonmbusinessmriskmandm informationmrisk.
b. Identifymthempotentialmconsequencesmtomthemcompanymofmnotmhavingmitsmfinancialmstateme
ntsmaudited.

5) Amsummarymofmfindingsmrathermthanmassurancemismmostmlikelymtombemincludedminma(n):

A) Agreed-uponmproceduresmreport.
B) Compilationmreport.
C) Auditmreport.
D) Reviewmreport.




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,6) ThemStatementsmonmAuditingmStandardsmhavembeenmissuedmbymthe:

A) AuditingmStandardsmBoard.
B) FinancialmAccountingmStandardsmBoard.
C) SecuritiesmandmExchangemCommission.
D) FederalmBureaumofmInvestigation.




7) Themriskmthatmamcompany’smfinancialmstatementsmwillmmateriallymdepartmfrommgeneral
lymacceptedmaccountingmprinciplesmismreferredmtom as:

A) BusinessmRisk.
B) InformationmRisk.
C) DetectionmRisk.
D) DocumentmRisk.




8) Historically,mwhichmofmthemfollowingmhasmthemAICPAmbeenmmostmconcernedmwi
thmproviding?

A) Auditingmstandards.
B) Professionalmguidancemformregulatingmfinancialmmarkets.
C) Internalmauditingmstandards.
D) StaffmsupportmtomCongress.




9) Themorganizationmchargedmwithmprotectingminvestorsmandmthempublicmbymrequiringmf
ullmdisclosuremofmfinancialminformationmbymcompaniesmofferingmsecuritiesmtomthempublicmismt
he:

A) AuditingmStandardsmBoard.
B) FinancialmAccountingmStandardsmBoard.
C) GovernmentmAccountingmStandardsmBoards.
D) SecuritiesmandmExchangemCommission.


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, 10) AnmengagementminmwhichmamCPAmfirmmarrangesmformamcriticalmreviewmofmitsmpracticesm
bymanothermCPAmfirmmismreferredmtom asma(n):

A) PeermReviewmEngagement.
B) QualitymControlmEngagement.
C) QualitymAssurancemEngagement.
D) AttestationmEngagement.




11) Themsequentially-
numberedmpronouncementsmissuedmbymthemAuditingmStandardsmBoardmovermamperiodmofmyearsm
aremknownmas:

A) AuditingmStatementsmofmPositionm(ASPs).
B) AccountingmSeriesmReleasesm(ASRs).
C) StatementsmonmAuditingmStandardsm(SASs).
D) StatementsmonmAuditingmPrinciplesm(SAPs).




12) GovernmentmAccountabilitymOfficem(GAO):

A) ismprimarilymconcernedmwithmrapidmprocessingmofmallmaccountsmpayablemincurredmbymt
hemfederalmgovernment.
B) responsibilitiesmincludemauditsmofmgovernmentmagencies.
C) ismanmorganizationmofmprofessionalmaccountantsmwhosemprimaryminterestm isminmt
hemeffectivenessmofmpresidentialmexpenditures.
D) ismprimarilymconcernedmwithmbudgetsmandmforecastsmapprovedmbymthemPCAOB.




13) Themriskmassociatedmwithmsurvivabilitymandmprofitabilitymismreferredmtomas:




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