TestBank for PrinciplesofAuditingand Other Assurance Servi
ces 22nd Edition by RayWhittington,KurtPany
Version1 1
,Chapter1
Studentname:_
1) Accountantsareregulated bya varietyoforganizations. Match thestatements withthemost yt yt yt j yt
directlyrelatedorganization:
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● Accounting and ReviewServicesCommittee. j yt
● AmericanInstituteofCertifiedPublic Accountants. yt
● Auditing Standards Board. j jy t
● Federal AccountingStandards AdvisoryBoard.
j yt
● FinancialAccounting Standards Board. j yt
● General Accounting O ffice. j j yt
● GovernmentAccounting StandardsBoard. yt j
● PublicCompanyAccounting Oversight Board. j yt
● Securitiesand ExchangeCommission. yt
● StateBoards of Accountancy. j j
Organizationsmaybeusedonce, morethanonce,ornotatall.
yt yt yt yt
Statements Organizations
A.Developsaccountingstandards
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y t
y
forpublicand nonpublic co mpanies.
t
y t
y j j yt
B.Developsaccountingstandardsfo r
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y t
y t
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y
theU.S.Government.
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y t
y
C.Improvesstandardsoffinancialac c
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y t
y yt
ountingforstateand localt
y t
y t
y j
government entities. j
D.Issuesauditingstandardsfor
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y t
y t
y
publiccompanies. t
y
E.IssuesCPAcertificates.
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y
F.Preparesthe CPA exam.
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y t
y j j
Organizations:AmericanInstituteof CertifiedPublicAccountants,Federal Accounting Standard s AdvisoryBoar
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inancial AccountingStandards Board, Government Accounting Standards Boar d,Public CompanyAccounting Ove
jyt yt yt yt j yt yt j j yt
ghtBoard,State Boardsof Accountancy.
yt yt j
Version1 2
,2) TheSarbanes-
OxleyActof2002 madesignificant reforms forpublic companies and theirauditors.
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a. Describe theeventsthat leduptothepassageof theAct.
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b. Describe the majorchangesmadebythe Act.
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3) Manypeopleconfusetheresponsibilitiesoftheindependentauditorsandtheclient'sman a j j j j yt
gement withrespect to audited financial statements.
jyt jy t yt yt j
a. Describe management's responsibilityregardingaudited financialstatements.
jy t yt yt
b. Describe the independent auditors'responsibilityregardingaudited financialstatements.
j yt j yt
c. Evaluatethefollowingstatement:"Iftheauditorsdisagreewithmanagementregardinganacco
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untingprincipleusedinthefinancialstatements,theauditorsshouldexpresstheirviewsinthenotest
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othefinancial statements." j
4) An investor isconsidering investing inone oftwo companies. Thecompanies haveverysimil
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arreportedfinancial position and resultsofoperations. However,onlyoneofthecompanieshas its fina
j j yt yt jy t yt yt
ncial statementsaudited.
j yt
a. Describe what creates the demand foranaudit in this situation. Includeadiscussionof howaudite
j yt j j yt j j yt yt j yt
dfinancialstatements facilitate this investmenttransaction, and theeffect ofthe audit onbusinessris
jyt yt yt yt j j yt j yt
kand information risk.
jyt j
b. Identifythepotentialconsequencesto thecompanyofnot having its financialstatementsaudit yt jyt yt yt yt
ed.
5) A summaryof findingsratherthan assurance is most likelytobeincluded ina(n):
j jyt j yt yt jy t yt yt
A) Agreed-upon proceduresreport. j
B) Compilationreport.
C) Auditreport.
D) Reviewreport.
Version1 3
, 6) TheStatements onAuditingStandards havebeen issued bythe:
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A) Auditing Standards Board. j yt
B) Financial Accounting StandardsBoard.
j j
C) Securitiesand ExchangeCommission. yt
D) Federal Bureauof Investigation.
j j
7) Therisk that acompany’s financial statementswill materiallydepart from generallyacce
j j yt yt jyt jyt yt j yt
ptedaccountingprinciples is referred to as: jy t yt yt yt
A) BusinessRisk.
B) Information Risk. j
C) Detection Risk. j
D) Document Risk. jyt
8) Historically, which ofthe following has the AICPAbeen most concerned with pro v
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iding?
A) Auditing standards. j
B) Professional guidance forregulating financial markets.
j yt yt jyt
C) Internal auditing standards.
j j
D) Staffsupportto Congress.
j j yt
9) Theorganization charged with protecting investors and thepublicbyrequiring full disc
j yt j jy t j yt jy t j
losureoffinancial information bycompaniesoffering securities to thepublic isthe:
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A) Auditing Standards Board. j yt
B) FinancialAccounting StandardsBoard. j
C) GovernmentAccounting StandardsBoards. yt j
D) Securitiesand ExchangeCommission. yt
Version1 4
ces 22nd Edition by RayWhittington,KurtPany
Version1 1
,Chapter1
Studentname:_
1) Accountantsareregulated bya varietyoforganizations. Match thestatements withthemost yt yt yt j yt
directlyrelatedorganization:
yt
● Accounting and ReviewServicesCommittee. j yt
● AmericanInstituteofCertifiedPublic Accountants. yt
● Auditing Standards Board. j jy t
● Federal AccountingStandards AdvisoryBoard.
j yt
● FinancialAccounting Standards Board. j yt
● General Accounting O ffice. j j yt
● GovernmentAccounting StandardsBoard. yt j
● PublicCompanyAccounting Oversight Board. j yt
● Securitiesand ExchangeCommission. yt
● StateBoards of Accountancy. j j
Organizationsmaybeusedonce, morethanonce,ornotatall.
yt yt yt yt
Statements Organizations
A.Developsaccountingstandards
t
y t
y t
y
forpublicand nonpublic co mpanies.
t
y t
y j j yt
B.Developsaccountingstandardsfo r
t
y t
y t
y yt t
y
theU.S.Government.
t
y t
y
C.Improvesstandardsoffinancialac c
t
y t
y t
y t
y yt
ountingforstateand localt
y t
y t
y j
government entities. j
D.Issuesauditingstandardsfor
t
y t
y t
y t
y
publiccompanies. t
y
E.IssuesCPAcertificates.
t
y t
y t
y
F.Preparesthe CPA exam.
t
y t
y j j
Organizations:AmericanInstituteof CertifiedPublicAccountants,Federal Accounting Standard s AdvisoryBoar
yt yt j yt yt yt jyt j yt j
inancial AccountingStandards Board, Government Accounting Standards Boar d,Public CompanyAccounting Ove
jyt yt yt yt j yt yt j j yt
ghtBoard,State Boardsof Accountancy.
yt yt j
Version1 2
,2) TheSarbanes-
OxleyActof2002 madesignificant reforms forpublic companies and theirauditors.
yt yt yt yt yt j j yt
a. Describe theeventsthat leduptothepassageof theAct.
j yt yt yt yt yt yt j yt
b. Describe the majorchangesmadebythe Act.
j yt yt
3) Manypeopleconfusetheresponsibilitiesoftheindependentauditorsandtheclient'sman a j j j j yt
gement withrespect to audited financial statements.
jyt jy t yt yt j
a. Describe management's responsibilityregardingaudited financialstatements.
jy t yt yt
b. Describe the independent auditors'responsibilityregardingaudited financialstatements.
j yt j yt
c. Evaluatethefollowingstatement:"Iftheauditorsdisagreewithmanagementregardinganacco
j j j j j j
untingprincipleusedinthefinancialstatements,theauditorsshouldexpresstheirviewsinthenotest
yt j j j j j yt
othefinancial statements." j
4) An investor isconsidering investing inone oftwo companies. Thecompanies haveverysimil
j yt jyt yt j jyt yt yt yt
arreportedfinancial position and resultsofoperations. However,onlyoneofthecompanieshas its fina
j j yt yt jy t yt yt
ncial statementsaudited.
j yt
a. Describe what creates the demand foranaudit in this situation. Includeadiscussionof howaudite
j yt j j yt j j yt yt j yt
dfinancialstatements facilitate this investmenttransaction, and theeffect ofthe audit onbusinessris
jyt yt yt yt j j yt j yt
kand information risk.
jyt j
b. Identifythepotentialconsequencesto thecompanyofnot having its financialstatementsaudit yt jyt yt yt yt
ed.
5) A summaryof findingsratherthan assurance is most likelytobeincluded ina(n):
j jyt j yt yt jy t yt yt
A) Agreed-upon proceduresreport. j
B) Compilationreport.
C) Auditreport.
D) Reviewreport.
Version1 3
, 6) TheStatements onAuditingStandards havebeen issued bythe:
j yt j yt
A) Auditing Standards Board. j yt
B) Financial Accounting StandardsBoard.
j j
C) Securitiesand ExchangeCommission. yt
D) Federal Bureauof Investigation.
j j
7) Therisk that acompany’s financial statementswill materiallydepart from generallyacce
j j yt yt jyt jyt yt j yt
ptedaccountingprinciples is referred to as: jy t yt yt yt
A) BusinessRisk.
B) Information Risk. j
C) Detection Risk. j
D) Document Risk. jyt
8) Historically, which ofthe following has the AICPAbeen most concerned with pro v
yt j yt yt j yt jyt j yt j yt
iding?
A) Auditing standards. j
B) Professional guidance forregulating financial markets.
j yt yt jyt
C) Internal auditing standards.
j j
D) Staffsupportto Congress.
j j yt
9) Theorganization charged with protecting investors and thepublicbyrequiring full disc
j yt j jy t j yt jy t j
losureoffinancial information bycompaniesoffering securities to thepublic isthe:
yt yt j j j yt jy t
A) Auditing Standards Board. j yt
B) FinancialAccounting StandardsBoard. j
C) GovernmentAccounting StandardsBoards. yt j
D) Securitiesand ExchangeCommission. yt
Version1 4
