Chapter 1 Multiple Choice Questions
And Answers
Governmentaldauditing,dindadditiondtodincludingdauditsdofdfinancialdstatements,doftendinclud
esdauditsdofdefficiency,deffectivenessdand:d-dCORRECTddANSWER-
4)dComplianced(withdlaws,dregulations...etc.)
Indgeneral,dinternaldauditors'dindependencedwilldbedgreatestdwhendtheydreportddirectlydtodth
e:d-dCORRECTddANSWER-
3)dAuditdcommitteedofdthedboarddofddirectorsdasditdincreasesdthedlikelihooddthatdthedinternald
auditordwilldbedabledtodactdindependentlydofdthosedbeingdaudited.
Thedmostdimportantdbenefitdofdhavingdandannualdauditdbydadpublicdaccountingdfirmdisdto:d-
dCORRECTddANSWER-
1)dProvidedassurancedtodinvestorsdanddotherdoutsidersdthatdthedfinancialdstatementsdaredrel
iable.
ThedSarbanes-
OxleydActdcreateddthedPublicdCompanydAccountingdOversightdBoardd(PCAOB).dWhichdofdt
hedfollowingdisdnotdonedofdthedresponsibilitiesdofdthedboard?
1)dEstablishdindependencedstandardsdfordauditorsdofdpublicdcompaniesd
2)dReviewdfinancialdreportsdfileddwithdthedSECd
3)dEstablishdauditingdstandardsdfordauditsdofdpublicdcompanies
4)dSanctiondregistereddauditdfirmsd-dCORRECTddANSWER-
2)dReviewdfinancialdreportsdfileddwithdthedSEC.dTheydmaydreviewdsuchdreportsdtodestablishd
theirdotherdresponsibilites
Whatdbestddescribesdthedpurposedofdthedauditors'dconsiderationdofdinternaldcontroldindadfina
ncialdstatementdauditdfordadnonpublicdcompany?d-dCORRECTddANSWER-
1)dToddeterminedthednature,dtiming,danddextentdofdauditdtesting
Whichdofdthedfollowingdbestddescribesdthedrelationshipdbetweendassurancedservicesdanddat
testdservices?d-dCORRECTddANSWER-
3)dBothdattestdanddassurancedservicesdrequiredindependence
WhichdofdthedfollowingddiddnotdprecipitatedthedpassagedofdthedSarbanes-
OxleydActdofd2002?
1)dDisclosuresdrelateddtodaccountingdirregularitiesdatdEnrondanddWorldCom
And Answers
Governmentaldauditing,dindadditiondtodincludingdauditsdofdfinancialdstatements,doftendinclud
esdauditsdofdefficiency,deffectivenessdand:d-dCORRECTddANSWER-
4)dComplianced(withdlaws,dregulations...etc.)
Indgeneral,dinternaldauditors'dindependencedwilldbedgreatestdwhendtheydreportddirectlydtodth
e:d-dCORRECTddANSWER-
3)dAuditdcommitteedofdthedboarddofddirectorsdasditdincreasesdthedlikelihooddthatdthedinternald
auditordwilldbedabledtodactdindependentlydofdthosedbeingdaudited.
Thedmostdimportantdbenefitdofdhavingdandannualdauditdbydadpublicdaccountingdfirmdisdto:d-
dCORRECTddANSWER-
1)dProvidedassurancedtodinvestorsdanddotherdoutsidersdthatdthedfinancialdstatementsdaredrel
iable.
ThedSarbanes-
OxleydActdcreateddthedPublicdCompanydAccountingdOversightdBoardd(PCAOB).dWhichdofdt
hedfollowingdisdnotdonedofdthedresponsibilitiesdofdthedboard?
1)dEstablishdindependencedstandardsdfordauditorsdofdpublicdcompaniesd
2)dReviewdfinancialdreportsdfileddwithdthedSECd
3)dEstablishdauditingdstandardsdfordauditsdofdpublicdcompanies
4)dSanctiondregistereddauditdfirmsd-dCORRECTddANSWER-
2)dReviewdfinancialdreportsdfileddwithdthedSEC.dTheydmaydreviewdsuchdreportsdtodestablishd
theirdotherdresponsibilites
Whatdbestddescribesdthedpurposedofdthedauditors'dconsiderationdofdinternaldcontroldindadfina
ncialdstatementdauditdfordadnonpublicdcompany?d-dCORRECTddANSWER-
1)dToddeterminedthednature,dtiming,danddextentdofdauditdtesting
Whichdofdthedfollowingdbestddescribesdthedrelationshipdbetweendassurancedservicesdanddat
testdservices?d-dCORRECTddANSWER-
3)dBothdattestdanddassurancedservicesdrequiredindependence
WhichdofdthedfollowingddiddnotdprecipitatedthedpassagedofdthedSarbanes-
OxleydActdofd2002?
1)dDisclosuresdrelateddtodaccountingdirregularitiesdatdEnrondanddWorldCom
