Test Bank for Principles of Auditing and Other Assurance Services 22nd Edition by Whittington all chapters

TEST BANK
Principles of Auditing and Other Assurance
Services 22nd Edition by Ray Whittington, Kurt Pany




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,Answers`are`at`the`end`of`each`chapter`Chapter`1
Student`name:
1)
Accountants`are`regulated`by`a`variety`of`organizations.`Match`the`statements`with`the`mo
st`directly`related`organization:
● Accounting`and`Review`Services`Committee.
● American`Institute`of`Certified`Public`Accountants.
● Auditing`Standards`Board.
● Federal`Accounting`Standards`Advisory`Board.
● Financial`Accounting`Standards`Board.
● General`Accounting`Office.
● Government`Accounting`Standards`Board.
● Public`Company`Accounting`Oversight`Board.
● Securities`and`Exchange`Commission.
● State`Boards`of`Accountancy.
Organizations`may`be`used`once,`more`than`once,`or`not`at`all.
Statements Organizations
A.`Develops`accounting`standards
for`public`and`nonpublic`companies.
B.`Develops`accounting`standards`for`the`U.S.`Government.
C.`Improves`standards`of`financial`accounting`for`state`and`local
government`entities.
D.`Issues`auditing`standards`for`public`companies.
E.`Issues`CPA`certificates.
F.`Prepares`the`CPA`exam.


Organizations:`American`Institute`of`Certified`Public`Accountants,`Federal`Accounting`Standards
`Advisory`Board,`Financial`Accounting`Standards`Board,`Government`Accounting`Standards`Boa

rd,`Public`Company`Accounting`Oversight`Board,`State`Boards`of`Accountancy.
`



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,2) The`Sarbanes-
Oxley`Act`of`2002`made`significant`reforms`for`public`companies`and`their`auditors.
a. Describe`the`events`that`led`up`to`the`passage`of`the`Act.
b. Describe`the`major`changes`made`by`the`Act.




3)
Many`people`confuse`the`responsibilities`of`the`independent`auditors`and`the`client's`mana
gement`with`respect`to`audited`financial`statements.
a. Describe`management's`responsibility`regarding`audited`financial`statements.
b. Describe`the`independent`auditors'`responsibility`regarding`audited`financial`statements.
c.
Evaluate`the`following`statement:`"If`the`auditors`disagree`with`management`regarding`an`
accounting`principle`used`in`the`financial`statements,`the`auditors`should`express`their`views`in`th
e`notes`to`the`financial`statements."




4)
An`investor`is`considering`investing`in`one`of`two`companies.`The`companies`have`very`si
milar`reported`financial`position`and`results`of`operations.`However,`only`one`of`the`companies`ha
s`its`financial`statements`audited.
a.
Describe`what`creates`the`demand`for`an`audit`in`this`situation.`Include`a`discussion`of`ho
w`audited`financial`statements`facilitate`this`investment`transaction,`and`the`effect`of`the`audit`on`
business`risk`and`information`risk.
b.
Identify`the`potential`consequences`to`the`company`of`not`having`its`financial`statements`a
udited.



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, 5) A`summary`of`findings`rather`than`assurance`is`most`likely`to`be`included`in`a(n):


A) Agreed-upon`procedures`report.
B) Compilation`report.
C) Audit`report.
D) Review`report.
`

6) The`Statements`on`Auditing`Standards`have`been`issued`by`the:


A) Auditing`Standards`Board.
B) Financial`Accounting`Standards`Board.
C) Securities`and`Exchange`Commission.
D) Federal`Bureau`of`Investigation.




7)
The`risk`that`a`company’s`financial`statements`will`materially`depart`from`generally`accep
ted`accounting`principles`is`referred`to`as:


A) Business`Risk.
B) Information`Risk.
C) Detection`Risk.
D) Document`Risk.




8) Historically,`which`of`the`following`has`the`AICPA`been`most`concerned`with`providing?




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