,DOWNLOAD THE Test Bank for Auditing The Art and Science of Assurance
Engagements 14th Edition Arens
Auditing,A14eA(Arens)
ChapterA2A A TheAPublicAAccountingAProfessionAandAAuditAQuality
2.1 DescribeAtheApublicAaccountingAindustry
1) OneAofAtheAmainAadvantagesAofAaA"big"ApublicAaccountingAfirmAis
A) theirAlowerAprofessionalAfeesAdueAtoAeconomiesAofAscale.
B) theirAabilityAtoAshareAwithAtheAclientAknowledgeAandAexperienceAfromAsimilarAcompaniesAtheyA
haveAaudited.
C) theirAabilityAtoAauditAnearlyAallAtheAlargestAcompaniesAworldwide.
D) theAincreasedAreliabilityAofAtheirAauditAreport
s.AAnswer:A C
Diff:A2 Type:AMCA A PageARef:A25
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
2) NationalAaccountingAfirmsAinA2015AwereAthoseAwith
A) officesAinAmostAmajorAcitiesAandArevenuesAoverA$100Amillion.
B) internationalArepresentationAinAmostAcitiesAaroundAtheAworld.
C) officesAinAallAmajorAcitiesAinACanadaAandArevenuesAoverA$75Amillion.
D) nationalAandAinternationalAaffiliationsAprovidingAservicesAinAallAmajorAcentr
es.AAnswer:A A
Diff:A3 Type:AMCA A PageARef:A25-26
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
3) ApproximatelyAhowAmanyApublicAaccountingAfirmsAinACanadaAhaveAmoreAthanA50AprofessionalAstaff?
A) 25
B) 50
C) 75
D) 100
Answer:A B
Diff:A3 Type:AMCA A PageARef:A26
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
4) WhatAisAtheAsizeAofAmostAsmallAlocalApublicAaccountingAfirmsAinACanada?
A) fewerAthanA25Aemployees
B) betweenA25AandA49Aemployees
C) betweenA50AandA75Aemployees
D) moreAthanA75Aemployee
sAAnswer:A A
Diff:A3 Type:AMCA A PageARef:A26
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
1
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,DOWNLOAD THE Test Bank for Auditing The Art and Science of Assurance Engagem
A A A A A A A A A A A A
ents 14th Edition Arens
A A A
5) TheAmostAcommonAorganizationalAformAusedAbyApublicAaccountingAfirmsAis
A) soleAproprietorshipAorApartnership.
B) professionalAcorporation.
C) corporation.
D) co-
operative.AAns
wer:A A
Diff:A1 Type:AMCA A PageARef:A26
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
6) LargeAaccountingAfirmsAareAoftenAlimitedAliabilityApartnershipsA(LLPs)AbecauseAifAtheirAaudits
AareAconductedAinAaccordanceAwithACASA(CanadianAAuditingAStandards),
A) partnersAnotAonAtheAengagementAwouldAnotAbeAliableAtoApayAwithAtheirApersonalAassetsAwhenAtheAL
LPAisAsued.
B) improvedAqualityAcontrolApracticesAcanAbeAinitiatedAusingAtechnicalApersonnel.
C) moreAformalArequirementsAareAinAplaceAwhenAreportingAtoAfederalAtaxAauthorities.
D) partnersAareAliableAtoApayAwithAonlyAaAlimitedAportionAofAtheirApersonalAassetsAwhenAtheALLPAisA
sued.AAnswer:A A
Diff:A3 Type:AMCA A PageARef:A26
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
7) MostAinternationalAandAnationalAaccountingAfirmsAinACanadaAareAcomprisedAofAprofessionalAaccount
antsAwithAtheAdesignation
A) CIA.
B) CPA.
C) CFE.
D) CISA.
Answer:A B
Diff:A2 Type:AMCA A PageARef:A27
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
8) WhatAareAtheAstaffAlevelsAandAresponsibilitiesAatApublicAaccountingAfirms?
Answer:A 1.APartnerA-
ALeadsAtheAengagement,AreviewsAtheAoverallAauditAwork,AandAisAinvolvedAinAsignificantAauditAdecisions.
AAApartnerAhasAtheAultimateAresponsibilityAforAconductingAtheAauditAandAmaintainingAclientArelations.AA
verageAexperienceAofA10Ayears.
2. SeniorAmanagerA-
ALeadsAtheAengagementAandAreviewsAtheAteam'sAwork.AWorksAdirectlyAwithAtheApartnerAandAassistsAinA
clientArelationships.AAverageAexperienceAofA7-10Ayears.
3. ManagerA-AHelpsAtheAin-chargeAplanAandAmanageAtheAaudit,AreviewsAtheAin-
charge'sAwork,AandAmanagesArelationsAwithAtheAclient.AAAmanagerAmayAbeAresponsibleAforAmoreAthanA
oneAengagementAatAtheAsameAtime.AAverageAexperienceAofA5-7Ayears.
4. SeniorAorAin-chargeAauditorA-
ACoordinatesAandAisAresponsibleAforAtheAauditAfieldAwork,AincludingAsupervisingAandAreviewin
gAstaffAwork.AAverageAexperienceAofA2-5Ayears.
5. StaffAaccountantA-APerformsAmostAofAtheAdetailedAauditAwork.AAverageAexperienceAofA0-
2Ayears.ADiff:A2 Type:AES PageARef:A27
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
2
©A2019APearsonACanadaAInc
.
mynursytest.store
, DOWNLOAD THE Test Bank for Auditing The Art and Science of Assurance Engagem
A A A A A A A A A A A A
ents 14th Edition Arens
A A A
9) WhatAareAtheAdifferentAbusinessAorganizationAstructuresAthatAanAaccountantAmayAuse?AWhatAare
AtheAadvantagesAofAtheseAstructures?
Answer:A AccountantsAmayAestablishAaAsoleAproprietorship,AaApartnership,AaAlimitedAliabilityApartners
hip,AorAaAlimitedAliabilityAcorporation.ATheAlatterAtwoAstructuresAareApermittedAonlyAinAcertainAprovinc
es,AbasedAuponAprovincialAlegislation.
Advantages:
AAsoleAproprietorshipAisAtheAonlyAchoiceAifAthereAisAonlyAoneAPA.AItAisAaAsimpleAbusinessAstructure.
AApartnershipAisAusedAtoAallocateAincomeAtoAallApartnersAandAhelpsAensureAthatAallApartnersAareAresponsi
bleAforAtheAactionsAofAtheAorganization.
AAlimitedAliabilityApartnershipA(orAlimitedAliabilityAcorporation)AisAusedAtoAlimitAliabilityAtoAonlyAthoseAp
artnersAwhoAworkedAonAorAsupervisedAaAparticularAengagement.AThisAhelpsAprotectAtheApersonalAassetsA
ofApartners.
Diff:A2 Type:AES PageARef:A26-27
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
2.2 IdentifyAtheAorganizationsAthatAaffectAtheApublicAaccountingAprofessionAandAtheirArole
1) TheACanadaABusinessACorporationAActAgaveAauthorityAtoACanadianAaccountingAandAauditingAstand
ard-AsettersAbyAstatingAthatAfinancialAstatements
A) mustAbeAcompiledAinAaccordanceAwithAInternationalAFinancialAReportingAStandards.
B) shouldAbeApreparedAinAaccordanceAwithAtheAstandardsAinAtheACPAACanadaAHandbook.
C) mustAbeAauditedAbyAaccountantsAthatAresideAinACanada.
D) shouldAbeApreparedAinAaccordanceAwithAlocalAfinancialAreportingAstandar
ds.AAnswer:A B
Diff:A2 Type:AMCA A PageARef:A29
LearningAObj.:A 2-2A IdentifyAtheAorganizationsAthatAaffectAtheApublicAaccountingAprofessionAandAtheirArole
2) TheAreasonAforAadoptingAtheACASsAisAto
A) complyAwithArequirementsAinAtheACanadaABusinessACorporationsAAct.
B) respondAtoAtheAincreasedAlitigationArisksAfacedAbyAauditors.
C) beAconsistentAwithAtheAinternationalAstandardsAofAauditing.
D) simplifyAtheAauditingAprocess
.AAnswer:A C
Diff:A2 Type:AMCA A PageARef:A29
LearningAObj.:A 2-2A IdentifyAtheAorganizationsAthatAaffectAtheApublicAaccountingAprofessionAandAtheirArole
3) TheAimplementationAofAtheASarbanes-
OxleyArequirementsAinAtheAU.S.AresultedAinAtheAcreationAofAtheAPCAOBAtoAoverseeAlistedAcompani
es'AauditorsAandAdevelopAauditAstandards.ATheAimpactAofAthisArequirementAinACanadaAwas
A) theAcreationAofAnewAauditingAstandardsAtoAensureAbetterAqualityAcontrolAforAaudits.
B) revisionAtoAtheArulesAofAprofessionalAconductAforACPAs.
C) additionalAtrainingArequirementsAforAbecomingAanAauditor.
D) theAcreationAofAtheACPABAtoAoverseeACanadianAauditAprofession
als.AAnswer:A D
Diff:A3 Type:AMCA A PageARef:A29
LearningAObj.:A 2-2A IdentifyAtheAorganizationsAthatAaffectAtheApublicAaccountingAprofessionAandAtheirArole
3
©A2019APearsonACanadaAInc
.
mynursytest.store
Engagements 14th Edition Arens
Auditing,A14eA(Arens)
ChapterA2A A TheAPublicAAccountingAProfessionAandAAuditAQuality
2.1 DescribeAtheApublicAaccountingAindustry
1) OneAofAtheAmainAadvantagesAofAaA"big"ApublicAaccountingAfirmAis
A) theirAlowerAprofessionalAfeesAdueAtoAeconomiesAofAscale.
B) theirAabilityAtoAshareAwithAtheAclientAknowledgeAandAexperienceAfromAsimilarAcompaniesAtheyA
haveAaudited.
C) theirAabilityAtoAauditAnearlyAallAtheAlargestAcompaniesAworldwide.
D) theAincreasedAreliabilityAofAtheirAauditAreport
s.AAnswer:A C
Diff:A2 Type:AMCA A PageARef:A25
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
2) NationalAaccountingAfirmsAinA2015AwereAthoseAwith
A) officesAinAmostAmajorAcitiesAandArevenuesAoverA$100Amillion.
B) internationalArepresentationAinAmostAcitiesAaroundAtheAworld.
C) officesAinAallAmajorAcitiesAinACanadaAandArevenuesAoverA$75Amillion.
D) nationalAandAinternationalAaffiliationsAprovidingAservicesAinAallAmajorAcentr
es.AAnswer:A A
Diff:A3 Type:AMCA A PageARef:A25-26
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
3) ApproximatelyAhowAmanyApublicAaccountingAfirmsAinACanadaAhaveAmoreAthanA50AprofessionalAstaff?
A) 25
B) 50
C) 75
D) 100
Answer:A B
Diff:A3 Type:AMCA A PageARef:A26
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
4) WhatAisAtheAsizeAofAmostAsmallAlocalApublicAaccountingAfirmsAinACanada?
A) fewerAthanA25Aemployees
B) betweenA25AandA49Aemployees
C) betweenA50AandA75Aemployees
D) moreAthanA75Aemployee
sAAnswer:A A
Diff:A3 Type:AMCA A PageARef:A26
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
1
©A2019APearsonACanadaAInc
.
mynursytest.store
,DOWNLOAD THE Test Bank for Auditing The Art and Science of Assurance Engagem
A A A A A A A A A A A A
ents 14th Edition Arens
A A A
5) TheAmostAcommonAorganizationalAformAusedAbyApublicAaccountingAfirmsAis
A) soleAproprietorshipAorApartnership.
B) professionalAcorporation.
C) corporation.
D) co-
operative.AAns
wer:A A
Diff:A1 Type:AMCA A PageARef:A26
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
6) LargeAaccountingAfirmsAareAoftenAlimitedAliabilityApartnershipsA(LLPs)AbecauseAifAtheirAaudits
AareAconductedAinAaccordanceAwithACASA(CanadianAAuditingAStandards),
A) partnersAnotAonAtheAengagementAwouldAnotAbeAliableAtoApayAwithAtheirApersonalAassetsAwhenAtheAL
LPAisAsued.
B) improvedAqualityAcontrolApracticesAcanAbeAinitiatedAusingAtechnicalApersonnel.
C) moreAformalArequirementsAareAinAplaceAwhenAreportingAtoAfederalAtaxAauthorities.
D) partnersAareAliableAtoApayAwithAonlyAaAlimitedAportionAofAtheirApersonalAassetsAwhenAtheALLPAisA
sued.AAnswer:A A
Diff:A3 Type:AMCA A PageARef:A26
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
7) MostAinternationalAandAnationalAaccountingAfirmsAinACanadaAareAcomprisedAofAprofessionalAaccount
antsAwithAtheAdesignation
A) CIA.
B) CPA.
C) CFE.
D) CISA.
Answer:A B
Diff:A2 Type:AMCA A PageARef:A27
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
8) WhatAareAtheAstaffAlevelsAandAresponsibilitiesAatApublicAaccountingAfirms?
Answer:A 1.APartnerA-
ALeadsAtheAengagement,AreviewsAtheAoverallAauditAwork,AandAisAinvolvedAinAsignificantAauditAdecisions.
AAApartnerAhasAtheAultimateAresponsibilityAforAconductingAtheAauditAandAmaintainingAclientArelations.AA
verageAexperienceAofA10Ayears.
2. SeniorAmanagerA-
ALeadsAtheAengagementAandAreviewsAtheAteam'sAwork.AWorksAdirectlyAwithAtheApartnerAandAassistsAinA
clientArelationships.AAverageAexperienceAofA7-10Ayears.
3. ManagerA-AHelpsAtheAin-chargeAplanAandAmanageAtheAaudit,AreviewsAtheAin-
charge'sAwork,AandAmanagesArelationsAwithAtheAclient.AAAmanagerAmayAbeAresponsibleAforAmoreAthanA
oneAengagementAatAtheAsameAtime.AAverageAexperienceAofA5-7Ayears.
4. SeniorAorAin-chargeAauditorA-
ACoordinatesAandAisAresponsibleAforAtheAauditAfieldAwork,AincludingAsupervisingAandAreviewin
gAstaffAwork.AAverageAexperienceAofA2-5Ayears.
5. StaffAaccountantA-APerformsAmostAofAtheAdetailedAauditAwork.AAverageAexperienceAofA0-
2Ayears.ADiff:A2 Type:AES PageARef:A27
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
2
©A2019APearsonACanadaAInc
.
mynursytest.store
, DOWNLOAD THE Test Bank for Auditing The Art and Science of Assurance Engagem
A A A A A A A A A A A A
ents 14th Edition Arens
A A A
9) WhatAareAtheAdifferentAbusinessAorganizationAstructuresAthatAanAaccountantAmayAuse?AWhatAare
AtheAadvantagesAofAtheseAstructures?
Answer:A AccountantsAmayAestablishAaAsoleAproprietorship,AaApartnership,AaAlimitedAliabilityApartners
hip,AorAaAlimitedAliabilityAcorporation.ATheAlatterAtwoAstructuresAareApermittedAonlyAinAcertainAprovinc
es,AbasedAuponAprovincialAlegislation.
Advantages:
AAsoleAproprietorshipAisAtheAonlyAchoiceAifAthereAisAonlyAoneAPA.AItAisAaAsimpleAbusinessAstructure.
AApartnershipAisAusedAtoAallocateAincomeAtoAallApartnersAandAhelpsAensureAthatAallApartnersAareAresponsi
bleAforAtheAactionsAofAtheAorganization.
AAlimitedAliabilityApartnershipA(orAlimitedAliabilityAcorporation)AisAusedAtoAlimitAliabilityAtoAonlyAthoseAp
artnersAwhoAworkedAonAorAsupervisedAaAparticularAengagement.AThisAhelpsAprotectAtheApersonalAassetsA
ofApartners.
Diff:A2 Type:AES PageARef:A26-27
LearningAObj.:A 2-1A DescribeAtheApublicAaccountingAindustry
2.2 IdentifyAtheAorganizationsAthatAaffectAtheApublicAaccountingAprofessionAandAtheirArole
1) TheACanadaABusinessACorporationAActAgaveAauthorityAtoACanadianAaccountingAandAauditingAstand
ard-AsettersAbyAstatingAthatAfinancialAstatements
A) mustAbeAcompiledAinAaccordanceAwithAInternationalAFinancialAReportingAStandards.
B) shouldAbeApreparedAinAaccordanceAwithAtheAstandardsAinAtheACPAACanadaAHandbook.
C) mustAbeAauditedAbyAaccountantsAthatAresideAinACanada.
D) shouldAbeApreparedAinAaccordanceAwithAlocalAfinancialAreportingAstandar
ds.AAnswer:A B
Diff:A2 Type:AMCA A PageARef:A29
LearningAObj.:A 2-2A IdentifyAtheAorganizationsAthatAaffectAtheApublicAaccountingAprofessionAandAtheirArole
2) TheAreasonAforAadoptingAtheACASsAisAto
A) complyAwithArequirementsAinAtheACanadaABusinessACorporationsAAct.
B) respondAtoAtheAincreasedAlitigationArisksAfacedAbyAauditors.
C) beAconsistentAwithAtheAinternationalAstandardsAofAauditing.
D) simplifyAtheAauditingAprocess
.AAnswer:A C
Diff:A2 Type:AMCA A PageARef:A29
LearningAObj.:A 2-2A IdentifyAtheAorganizationsAthatAaffectAtheApublicAaccountingAprofessionAandAtheirArole
3) TheAimplementationAofAtheASarbanes-
OxleyArequirementsAinAtheAU.S.AresultedAinAtheAcreationAofAtheAPCAOBAtoAoverseeAlistedAcompani
es'AauditorsAandAdevelopAauditAstandards.ATheAimpactAofAthisArequirementAinACanadaAwas
A) theAcreationAofAnewAauditingAstandardsAtoAensureAbetterAqualityAcontrolAforAaudits.
B) revisionAtoAtheArulesAofAprofessionalAconductAforACPAs.
C) additionalAtrainingArequirementsAforAbecomingAanAauditor.
D) theAcreationAofAtheACPABAtoAoverseeACanadianAauditAprofession
als.AAnswer:A D
Diff:A3 Type:AMCA A PageARef:A29
LearningAObj.:A 2-2A IdentifyAtheAorganizationsAthatAaffectAtheApublicAaccountingAprofessionAandAtheirArole
3
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.
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