Auditing and Assurance Services Test 1
UPDATED Exam Questions and CORRECT
Answers
The primary reason for any audit by an independent, external audit firm is to
A)satisfy governmental regulatory requirements
B) Guarantee that there are no misstatements in the financial statements and ensure that any
fraud will be discovered
C) Relieve management of responsibility for the Financial statments
D) Provide increased assurance to users as to the fairness of financial statements - CORRECT
ANSWER -D
Independent CPAs perform audits on the financial statements of issuers. This type of auditing
can best be described as
a)an activity whose purpose is to search for fraud
b) a discipline that attests to financial information presented by management
c) a professional activity that measures and communicates financial and business data
d) which way did the chicken go to cross the road to hurt the hens - CORRECT
ANSWER -B
who establishes generally accepted auditing standards
,a) auditing standards board and the PCAOB
b) FASB and the GASB
c) State boards of accountancy
d) SEC - CORRECT ANSWER -A
Users of an issuer's financial statements demand independent audits because
a) users demand assurance that fraud does not exist
b) management may not be objective in reporting
c) users expect auditors to correct management errors
d) management relies on the auditor to improve internal control - CORRECT ANSWER -
B
an audit of the financial statements of Camden Corporation is being conducted by an external
auditor. the external auditor is expected to
a) express an opinion as to the fairness of Camden's financial statments
b) express an opinion as to the attractiveness
c) Certify the correctness of camden's financial statements
,d) make a 100% examination of camden's records - CORRECT ANSWER -A
Notes that are included with financial statements are the responsibility of
a) SEC
b) Company's management
c) Independent Auditor
d) internal trading routes - CORRECT ANSWER -B
Brandnew company is going public, and its stock will be listed on a stock exchange. Audited
financial statements are required to be filed with the SEC. Who is expected to be primary user of
the audited financial statements
a) the stock exchange
b) brandnew company's investors
c) the SEC
d) Brandnew company's board of directors - CORRECT ANSWER -B
The committee of sponsoring organizations of the treadway commission issued a document in
1992 that has been embraced by the numerous organizations, including the AICPA and the GAO.
That document is titled:
a) the yellow book
, b) Internal control--Integrated framework
c) statements on auditing statndards
d) code of professional conduct - CORRECT ANSWER -b
CPAs within each state have formed state societes or associations of CPAs. Which of the
following statements about these associations is false
a) most associations have their own codes of professional ethics that closely parallel the AICPA
Code of professional conduct
b) the state societies are independent of the AICPA
c) All CPAs in the state must be members of the state association or society
d) members of hte state associations may also be members of the AICPA - CORRECT
ANSWER -C
according to AU-C 200, overall objectives of the independent auditor and the conduct of an audit
in accordance with generally accepting auditing standards presumptively mandatory
requriements in the auditing standards use which word
a) must
b)can
c)should
UPDATED Exam Questions and CORRECT
Answers
The primary reason for any audit by an independent, external audit firm is to
A)satisfy governmental regulatory requirements
B) Guarantee that there are no misstatements in the financial statements and ensure that any
fraud will be discovered
C) Relieve management of responsibility for the Financial statments
D) Provide increased assurance to users as to the fairness of financial statements - CORRECT
ANSWER -D
Independent CPAs perform audits on the financial statements of issuers. This type of auditing
can best be described as
a)an activity whose purpose is to search for fraud
b) a discipline that attests to financial information presented by management
c) a professional activity that measures and communicates financial and business data
d) which way did the chicken go to cross the road to hurt the hens - CORRECT
ANSWER -B
who establishes generally accepted auditing standards
,a) auditing standards board and the PCAOB
b) FASB and the GASB
c) State boards of accountancy
d) SEC - CORRECT ANSWER -A
Users of an issuer's financial statements demand independent audits because
a) users demand assurance that fraud does not exist
b) management may not be objective in reporting
c) users expect auditors to correct management errors
d) management relies on the auditor to improve internal control - CORRECT ANSWER -
B
an audit of the financial statements of Camden Corporation is being conducted by an external
auditor. the external auditor is expected to
a) express an opinion as to the fairness of Camden's financial statments
b) express an opinion as to the attractiveness
c) Certify the correctness of camden's financial statements
,d) make a 100% examination of camden's records - CORRECT ANSWER -A
Notes that are included with financial statements are the responsibility of
a) SEC
b) Company's management
c) Independent Auditor
d) internal trading routes - CORRECT ANSWER -B
Brandnew company is going public, and its stock will be listed on a stock exchange. Audited
financial statements are required to be filed with the SEC. Who is expected to be primary user of
the audited financial statements
a) the stock exchange
b) brandnew company's investors
c) the SEC
d) Brandnew company's board of directors - CORRECT ANSWER -B
The committee of sponsoring organizations of the treadway commission issued a document in
1992 that has been embraced by the numerous organizations, including the AICPA and the GAO.
That document is titled:
a) the yellow book
, b) Internal control--Integrated framework
c) statements on auditing statndards
d) code of professional conduct - CORRECT ANSWER -b
CPAs within each state have formed state societes or associations of CPAs. Which of the
following statements about these associations is false
a) most associations have their own codes of professional ethics that closely parallel the AICPA
Code of professional conduct
b) the state societies are independent of the AICPA
c) All CPAs in the state must be members of the state association or society
d) members of hte state associations may also be members of the AICPA - CORRECT
ANSWER -C
according to AU-C 200, overall objectives of the independent auditor and the conduct of an audit
in accordance with generally accepting auditing standards presumptively mandatory
requriements in the auditing standards use which word
a) must
b)can
c)should
