,DOWNLOAD THE Test Bank for Auditing and Assurance Services SystematicAppro
v v v v v v v v v v
ach 10th Edition Messierv v v
Chapter 02 v v
The Financial Statement Auditing Environment
v v v v
Truev/vFalsevQuestions
1. AvseriesvofvbusinessvandvrelatedvauditingvfailuresvledvtovthevpassagevofvthevSarbanes-
OxleyvActv(2002).
True False
2. Thevprimaryvauditvcontextvwithvwhichvanvauditorvisvconcernedvisvthevauditee'svindustryvorvbusiness.
True False
3. Thevauditvcommitteevgenerallyvincludesvseniorvexecutivesvofvthevorganization.
True False
4. Avfinancialvstatementvauditvisvgenerallyvorganizedvbasedvonvthevfivevbasicvbusinessvprocessesvorv
cycles.
True False
5. Onevofvthevfivevbasicvbusinessvprocessesvisvthevwarehousingvcycle.
True False
6. ThevIAASBvandvthevASBvcollaboratedvonvavreplacementvforvthev10vGAASvstandardsvwhichvincludevpr
inciplesvunderlyingvanvauditvconductedvinvaccordancevwithvgenerallyvacceptedvauditingvstandards.
True False
2-1
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ach 10th Edition Messierv v v
7. PCAOBvauditingvstandardsvmustvbevfollowedvonvallvfinancialvstatementvauditsvperformedvinvthevU.S.
True False
8. AvfinancialvstatementvauditvmustvbevconductedvbasedvonvGAAP.
True False
9. Generally,vthevfinancialvstatementsvofvU.S.vcompaniesvmustvbevpreparedvbasedvonvGAAP.
True False
10. PCAOBvauditingvstandardsvmustvbevfollowedvonvallvauditsvofvpublicvcompanies'vfinancialvstatements.
True False
Multiplev Choicev Questions
11. ThevAuditvCommitteevconsistsvof
A. Membersvofvmanagement.
B. AvsubcommitteevofvthevAICPAvwhovestablishvthevSAS.
C. MembersvofvthevBoardvofvDirectors.
D. Appointedvgovernmentvoverseers.
2-2
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ach 10th Edition Messier v v v
12. Whatvorganizationvisvresponsiblevforvsettingvauditingvstandardsvforvauditsvofvpublicly-
tradedvcompaniesvinvthevU.S.?
A. AICPA.
B. FASB.
C. GASB.
D. PCAOB.
13. ThevPublicvCompanyvAccountingvOversightvBoard'svrolevisvto
A. Conductvthevfinalvreviewvofvauditors'vworkvbeforevthevauditor'svopinionvisvissued.
B. Overseevthevauditorsvofvpublicvcompaniesvinvordervtovprotectvthevinterestsvofvinvestors.
C. Conductvauditsvofvgovernmentalventities.
D. SanctionvauditorsvwhovfailvtovfollowvGAAS.
14. ThevauthoritativevbodyvdesignedvtovpromulgatevstandardsvconcerningvavCPA'svassociationvwithvaud
itedvfinancialvstatementsvofvanventityvthatvisvrequiredvtovfilevfinancialvstatementsvwithvthevSECvisvthe
A. FinancialvAccountingvStandardsvBoard.
B. GeneralvAccountingvOffice.
C. PublicvCompanyvAccountingvOversightvBoard.
D. AuditingvStandardsvBoard.
15. Thevauditorvmustvbevindependentvofvthevauditeevunless
A. Thevlackvofvindependencevdoesvnotvinfluencevhisvorvhervprofessionalvjudgment.
B. Bothvpartiesvagreevthatvthevindependencevissuevisvnotvavproblem.
C. Thevlackvofvindependencevisvinsignificant.
D. Nonevofvthevabove—thevauditorvcannotvlackvindependence.
2-3
Copyrightv©v2017vMcGraw-HillvEducation.vAllvrightsvreserved.vNovreproductionvorvdistributionvwithoutvthevpriorvwrittenvconsentvofvMcGraw-
HillvEducation.
mynursytest.store
v v v v v v v v v v
ach 10th Edition Messierv v v
Chapter 02 v v
The Financial Statement Auditing Environment
v v v v
Truev/vFalsevQuestions
1. AvseriesvofvbusinessvandvrelatedvauditingvfailuresvledvtovthevpassagevofvthevSarbanes-
OxleyvActv(2002).
True False
2. Thevprimaryvauditvcontextvwithvwhichvanvauditorvisvconcernedvisvthevauditee'svindustryvorvbusiness.
True False
3. Thevauditvcommitteevgenerallyvincludesvseniorvexecutivesvofvthevorganization.
True False
4. Avfinancialvstatementvauditvisvgenerallyvorganizedvbasedvonvthevfivevbasicvbusinessvprocessesvorv
cycles.
True False
5. Onevofvthevfivevbasicvbusinessvprocessesvisvthevwarehousingvcycle.
True False
6. ThevIAASBvandvthevASBvcollaboratedvonvavreplacementvforvthev10vGAASvstandardsvwhichvincludevpr
inciplesvunderlyingvanvauditvconductedvinvaccordancevwithvgenerallyvacceptedvauditingvstandards.
True False
2-1
Copyrightv©v2017vMcGraw-HillvEducation.vAllvrightsvreserved.vNovreproductionvorvdistributionvwithoutvthevpriorvwrittenvconsentvofvMcGraw-
HillvEducation.
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,DOWNLOAD THE Test Bank for Auditing and Assurance Services SystematicAppro
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ach 10th Edition Messierv v v
7. PCAOBvauditingvstandardsvmustvbevfollowedvonvallvfinancialvstatementvauditsvperformedvinvthevU.S.
True False
8. AvfinancialvstatementvauditvmustvbevconductedvbasedvonvGAAP.
True False
9. Generally,vthevfinancialvstatementsvofvU.S.vcompaniesvmustvbevpreparedvbasedvonvGAAP.
True False
10. PCAOBvauditingvstandardsvmustvbevfollowedvonvallvauditsvofvpublicvcompanies'vfinancialvstatements.
True False
Multiplev Choicev Questions
11. ThevAuditvCommitteevconsistsvof
A. Membersvofvmanagement.
B. AvsubcommitteevofvthevAICPAvwhovestablishvthevSAS.
C. MembersvofvthevBoardvofvDirectors.
D. Appointedvgovernmentvoverseers.
2-2
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HillvEducation.
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, DOWNLOAD THE Test Bank for Auditing and Assurance Services SystematicAppro
v v v v v v v v v v
ach 10th Edition Messier v v v
12. Whatvorganizationvisvresponsiblevforvsettingvauditingvstandardsvforvauditsvofvpublicly-
tradedvcompaniesvinvthevU.S.?
A. AICPA.
B. FASB.
C. GASB.
D. PCAOB.
13. ThevPublicvCompanyvAccountingvOversightvBoard'svrolevisvto
A. Conductvthevfinalvreviewvofvauditors'vworkvbeforevthevauditor'svopinionvisvissued.
B. Overseevthevauditorsvofvpublicvcompaniesvinvordervtovprotectvthevinterestsvofvinvestors.
C. Conductvauditsvofvgovernmentalventities.
D. SanctionvauditorsvwhovfailvtovfollowvGAAS.
14. ThevauthoritativevbodyvdesignedvtovpromulgatevstandardsvconcerningvavCPA'svassociationvwithvaud
itedvfinancialvstatementsvofvanventityvthatvisvrequiredvtovfilevfinancialvstatementsvwithvthevSECvisvthe
A. FinancialvAccountingvStandardsvBoard.
B. GeneralvAccountingvOffice.
C. PublicvCompanyvAccountingvOversightvBoard.
D. AuditingvStandardsvBoard.
15. Thevauditorvmustvbevindependentvofvthevauditeevunless
A. Thevlackvofvindependencevdoesvnotvinfluencevhisvorvhervprofessionalvjudgment.
B. Bothvpartiesvagreevthatvthevindependencevissuevisvnotvavproblem.
C. Thevlackvofvindependencevisvinsignificant.
D. Nonevofvthevabove—thevauditorvcannotvlackvindependence.
2-3
Copyrightv©v2017vMcGraw-HillvEducation.vAllvrightsvreserved.vNovreproductionvorvdistributionvwithoutvthevpriorvwrittenvconsentvofvMcGraw-
HillvEducation.
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