A100 Final Exam With 100% Correct
Answers
Financial Audit - correct answers ✔✔Carry out thorough examination of an entity's books and
records, financial accounts, and policies and procedures
Internal Controls - correct answers ✔✔Procedures and systems designed to promote efficiency,
safeguard assets, avoid fraud and errors, and keep accounting data accurate
Sarbanes-Oxley - correct answers ✔✔Public Company Accounting Reform and Investor
Protection Act of 2002
Section 404 - correct answers ✔✔Part of Sarbanes-Oxley is an audit of internal controls
Internal Control 1: Control Environment - correct answers ✔✔Tone at the top, management
must set an ethical tone for its employees
Internal Control 2: Risk Assessment - correct answers ✔✔The company must realize the risks it
faces and take steps to control the risks.
Internal Control 3: Control activities - correct answers ✔✔The company must establish
procedures and policies to protect its assets
Internal Control 4: Information and Communication - correct answers ✔✔The policies and
procedures must be communicated to employees
, Internal Control 5: Monitoring - correct answers ✔✔There must be continual followup to see
how the procedures are working and to make any necessary modifications.
Sampling - correct answers ✔✔Using a random subset of the population in order to form an
opinion on the population as a whole
Audit evidence - correct answers ✔✔Information gathered by the auditors for their analysis and
evaluation.
Materiality - correct answers ✔✔Refers to the size of an error in financial statements. Its
material if it is likely that a reasonable person would be impacted by the error or omission
Corporate governance - correct answers ✔✔The laws and rules in place which determine how a
company operates. Both internal and external factors.
Best practices - correct answers ✔✔The techniques and methods that have been proven to lead
to desired results.
GAAS - correct answers ✔✔Generally Accepted Auditing Standards
PCAOB - correct answers ✔✔Public Company Accounting Oversight Board under SEC and
Sarbanes-Oxley
Sarbanes-Oxley Auditor Implication - correct answers ✔✔7-year paper retention
Second partner review
Quality review by PCAOB ever year
Can't provide consulting to audit clients
Report to audit committee
Answers
Financial Audit - correct answers ✔✔Carry out thorough examination of an entity's books and
records, financial accounts, and policies and procedures
Internal Controls - correct answers ✔✔Procedures and systems designed to promote efficiency,
safeguard assets, avoid fraud and errors, and keep accounting data accurate
Sarbanes-Oxley - correct answers ✔✔Public Company Accounting Reform and Investor
Protection Act of 2002
Section 404 - correct answers ✔✔Part of Sarbanes-Oxley is an audit of internal controls
Internal Control 1: Control Environment - correct answers ✔✔Tone at the top, management
must set an ethical tone for its employees
Internal Control 2: Risk Assessment - correct answers ✔✔The company must realize the risks it
faces and take steps to control the risks.
Internal Control 3: Control activities - correct answers ✔✔The company must establish
procedures and policies to protect its assets
Internal Control 4: Information and Communication - correct answers ✔✔The policies and
procedures must be communicated to employees
, Internal Control 5: Monitoring - correct answers ✔✔There must be continual followup to see
how the procedures are working and to make any necessary modifications.
Sampling - correct answers ✔✔Using a random subset of the population in order to form an
opinion on the population as a whole
Audit evidence - correct answers ✔✔Information gathered by the auditors for their analysis and
evaluation.
Materiality - correct answers ✔✔Refers to the size of an error in financial statements. Its
material if it is likely that a reasonable person would be impacted by the error or omission
Corporate governance - correct answers ✔✔The laws and rules in place which determine how a
company operates. Both internal and external factors.
Best practices - correct answers ✔✔The techniques and methods that have been proven to lead
to desired results.
GAAS - correct answers ✔✔Generally Accepted Auditing Standards
PCAOB - correct answers ✔✔Public Company Accounting Oversight Board under SEC and
Sarbanes-Oxley
Sarbanes-Oxley Auditor Implication - correct answers ✔✔7-year paper retention
Second partner review
Quality review by PCAOB ever year
Can't provide consulting to audit clients
Report to audit committee
