1
ACCT 3222-3 EXAM 1 WILEY LSU ONLINE PRACTICE
EXAM AND STUDY GUIDE | ALL QUESTIONS AND
CORRECT ANSWERS | LATEST EDITION | ALREADY
GRADED A+
Audit Services - (answers)services by an independent CPA that provide financial
statement users with (1) an opinion on whether the financial statements are
presented fairly, in all material respects, in accordance with an applicable
financial reporting framework and (2) an opinion on the effectiveness of ICFR,
which enhance the degree of confidence that intended users can place in the
financial statements
Attestation Services - (answers)Services performed when an independent
practitioner, or CPA, is engaged to issue a report on subject matter that is the
responsibility of another party
Relationship of assurance, attestation, and auditing services from most to least
improved of quality (i.e., assurance) - (answers)Audit - highest quality/reasonable
assurance (i.e., historical financial statements)
Attestation - mid quality/limited assurance (i.e., review of historical financial
statements, examination of internal controls, review of financial forecast)
Assurance - lowest quality (i.e., compilation of historical financial statements,
website security, IT operations, non-financial information)
Assurance Services - (answers)independent professional services that improve the
quality of information, or its context, for decision makers
, 2
Applicable financial reporting framework refers to - (answers)the set of standards
used in preparing the historical financial statements (i.e., GAAP, IFRS, or federal
income tax basis of accounting)
Independent implies that the service is performed by - (answers)someone who
was not involved with the creation of the information and who is objective in the
evaluation of the information
Quality refers to - (answers)the relevance and realiability of the information
Information refers to - (answers)subject matter that can be financial or
nonfinancial, historical or prospective, standalone data or entire systems of data,
internal or external to a company
CPAs are the only _________ accounting professionals in the US and the
________ are issued at the ____________ level - (answers)Licensed accounting
professionals in the US.
Licenses are issued at the state level, not federal
A state board of accountancy will only issue - (answers)a licence to practice after
all three Es have been earned
CPA Es - (answers)Education, Exam, and Experience
, 3
Public companies, or issuers, in the US are required by federal government to
have - (answers)an annual financial statement audit and an ICFR audit
Private companies, or non-issuers, are _______ to have an annual audit by federal
government, but - (answers)Not required by law, other interested users may
request audited financial statements (i.e., lenders)
ICFR - (answers)Internal Control over Financial Reporting
Integrated Audit - (answers)An audit that combines the financial statement audit
with an audit of the effectiveness of ICFR
The limitations of an audit are cause by - (answers)1. the nature of financial
reporting
2. the nature of audit procedures
3. the need for the audit to be conducted within a reasonable period of time at a
reasonable cost
The nature of financial reporting refers to - (answers)the use of judgment when
preparing financial statements due to the subjectivity required when arriving at
accounting estimates and judgment required when selecting and applying
accounting methods
The nature of audit procedures refers to - (answers)Reliance on evidence
provided by the client and its managements, as well as the concept of materiality
, 4
Materiality - (answers)the ability of information to influence decisions that users
make on the basis of the financial information of a specific reporting entity
Compliance Audit - (answers)an audit to determine whether the entity has
conformed with regulations, rules, or processes
Operational (Performance) Audit - (answers)An assessment of the economy,
efficiency, and effectiveness of an organization's operations
Operational Audit economy, efficiency, and effectiveness refer to -
(answers)Economy refers to the cost of inputs
Efficiency refers to the relationship between inputs and outputs
Effectiveness refers to the achievement of certain goals or the production of a
certain level of outputs
Internal Audit - (answers)A function within an entity which generally evaluates
and improves risk management, internal control procedures, and elements of the
governance process
Those charged with governance - (answers)Persons with responsibility for
overseeing the strategic direction of the entity and the obligations related to the
accountability of the entity
ACCT 3222-3 EXAM 1 WILEY LSU ONLINE PRACTICE
EXAM AND STUDY GUIDE | ALL QUESTIONS AND
CORRECT ANSWERS | LATEST EDITION | ALREADY
GRADED A+
Audit Services - (answers)services by an independent CPA that provide financial
statement users with (1) an opinion on whether the financial statements are
presented fairly, in all material respects, in accordance with an applicable
financial reporting framework and (2) an opinion on the effectiveness of ICFR,
which enhance the degree of confidence that intended users can place in the
financial statements
Attestation Services - (answers)Services performed when an independent
practitioner, or CPA, is engaged to issue a report on subject matter that is the
responsibility of another party
Relationship of assurance, attestation, and auditing services from most to least
improved of quality (i.e., assurance) - (answers)Audit - highest quality/reasonable
assurance (i.e., historical financial statements)
Attestation - mid quality/limited assurance (i.e., review of historical financial
statements, examination of internal controls, review of financial forecast)
Assurance - lowest quality (i.e., compilation of historical financial statements,
website security, IT operations, non-financial information)
Assurance Services - (answers)independent professional services that improve the
quality of information, or its context, for decision makers
, 2
Applicable financial reporting framework refers to - (answers)the set of standards
used in preparing the historical financial statements (i.e., GAAP, IFRS, or federal
income tax basis of accounting)
Independent implies that the service is performed by - (answers)someone who
was not involved with the creation of the information and who is objective in the
evaluation of the information
Quality refers to - (answers)the relevance and realiability of the information
Information refers to - (answers)subject matter that can be financial or
nonfinancial, historical or prospective, standalone data or entire systems of data,
internal or external to a company
CPAs are the only _________ accounting professionals in the US and the
________ are issued at the ____________ level - (answers)Licensed accounting
professionals in the US.
Licenses are issued at the state level, not federal
A state board of accountancy will only issue - (answers)a licence to practice after
all three Es have been earned
CPA Es - (answers)Education, Exam, and Experience
, 3
Public companies, or issuers, in the US are required by federal government to
have - (answers)an annual financial statement audit and an ICFR audit
Private companies, or non-issuers, are _______ to have an annual audit by federal
government, but - (answers)Not required by law, other interested users may
request audited financial statements (i.e., lenders)
ICFR - (answers)Internal Control over Financial Reporting
Integrated Audit - (answers)An audit that combines the financial statement audit
with an audit of the effectiveness of ICFR
The limitations of an audit are cause by - (answers)1. the nature of financial
reporting
2. the nature of audit procedures
3. the need for the audit to be conducted within a reasonable period of time at a
reasonable cost
The nature of financial reporting refers to - (answers)the use of judgment when
preparing financial statements due to the subjectivity required when arriving at
accounting estimates and judgment required when selecting and applying
accounting methods
The nature of audit procedures refers to - (answers)Reliance on evidence
provided by the client and its managements, as well as the concept of materiality
, 4
Materiality - (answers)the ability of information to influence decisions that users
make on the basis of the financial information of a specific reporting entity
Compliance Audit - (answers)an audit to determine whether the entity has
conformed with regulations, rules, or processes
Operational (Performance) Audit - (answers)An assessment of the economy,
efficiency, and effectiveness of an organization's operations
Operational Audit economy, efficiency, and effectiveness refer to -
(answers)Economy refers to the cost of inputs
Efficiency refers to the relationship between inputs and outputs
Effectiveness refers to the achievement of certain goals or the production of a
certain level of outputs
Internal Audit - (answers)A function within an entity which generally evaluates
and improves risk management, internal control procedures, and elements of the
governance process
Those charged with governance - (answers)Persons with responsibility for
overseeing the strategic direction of the entity and the obligations related to the
accountability of the entity
