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Exam (elaborations)

Auditing & Assurance Services Chapter 1 Questions and Answers

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Auditing & Assurance Services Chapter 1 Questions and Answers A determination of cost savings obtained by outsourcing cafeteria services is most likely to be an objective of - Environmental auditing. - Operational auditing. - Compliance auditing. - Financial auditing. - CORRECT ANSWER-Operational auditing. According to the AICPA, the purpose of an audit of financial statements is to - Obtain systematic and objective evidence about financial assertions and report the results to interested users. - Express an opinion on the fairness with which they present financial position, results of operations, and cash flows in conformity with accounting standards promulgated by the U.S. Securities and Exchange Commission. - Express an opinion on the fairness with which they present financial position, results of operations, and cash flows in conformity with accounting standards promulgated by the Financial Accounting Standards Board. - Enhance the degree of confidence that intended users can place in the financial statements. - CORRECT ANSWER-Enhance the degree of confidence that intended users can place in the financial statements. ACCURACY (auditor obtain?) - CORRECT ANSWER-Auditors obtain evidence about specific valuations and MATHEMATICAL accuracy by comparing vendors' invoices to inventory prices, obtaining lower-of-cost-or-market data, evaluating collectability of receivables, recalculating depreciation schedules, and so forth. An attestation engagement is one in which a CPA is engaged to A) testify as an expert witness in accounting, auditing or tax matters, given certain stipulated facts. B) provide tax advice or prepare a tax return based on financial information the CPA has not audited or reviewed. C) assemble prospective financial statements based on the assumptions of the entity's management without expressing any assurance. D) issue, or does issue, a report on subject matter or an assertion about the subject matter that is the responsibility of another party. - CORRECT ANSWER-issue, or does issue, a report on subject matter or an assertion about the subject matter that is the responsibility of another party.

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Institution
Auditing And Assurance
Course
Auditing and Assurance

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Auditing & Assurance Services Chapter 1
Questions and Answers
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