Auditing and Assurance Services Chapter 1
Study online at https://quizlet.com/_54ki1c
1. occurrence; existence As a general rule the ________ assertion relates to events, transactions, pre-
sentations and footnote disclosures and the __________ assertion relates
to account balances.
2. c. attestation engage- An audit is a specific type of:
ment a. assertion
b. explicit representation
c. attestation engagement
d. internal control
3. - provides tax services The PCAOB prohibits an accounting firm from providing auditing services to
for key company exec- a public company if the accounting firm:
utives - provides tax services for key company executives
- consults on "listed" - provides normal tax advice to the company
transaction tax strate- - consults on "listed" transaction tax strategies
gies - accepts fees that are based on tax outcomes
- accepts fees that
are based on tax out-
comes
4. True True or False: Understanding management assertions is a key component
of planning an audit.
5. - auditing and as- Which of the following statements are correct?
surance services are - The level of auditing activity provided increases as the size of the public
the largest source of accounting firm decreases.
revenue for most of - Auditing and assurance services are the largest source of revenue for most
the Big 4 accounting of the Big 4 accounting firms.
firms - Larger CPA firms usually provide more nonaudit and attestation services
- traditional finan- for their clients than smaller firms.
cial statement audits - Traditional financial statement audits are the most frequent assurance
are the most fre- engagement requested y most medium nonpublic companies.
, Auditing and Assurance Services Chapter 1
Study online at https://quizlet.com/_54ki1c
quent assurance en-
gagement requested
by most medium non-
public companies
6. existence; occurence The assertions about the actuality of each balance sheet and income state-
ment balance is ___________, while ______________ asserts that each
event and transaction actually happened.
7. - management or hu- Services that public accounting firms are prohibited from providing to audit
man resource ser- clients under Sarbanes-Oxley include:
vices - management or human resource services
- financial information - financial information system design and implementation
system design and - tax return preparation advice
implementation - bookkeeping and related services
- bookkeeping and re- - appraisal or valuation services
lated services
- appraisal or valua-
tion services
8. attestation engage- When a practitioner is engaged to issue a report on a subject matter or an
ment assertion about subject matter that is the responsibility of another party is
a(n): _________ _________
9. c. provides tax ser- The PCAOB argues that auditor independence would be impaired if the
vices to key execu- firm:
tives a. provides any type of tax advice to the company
b. prepares the company's corporate tax return
c. provides tax services to key executives
10. - has more task-based The new CPA exam:
activities - is now 14 hours instead of 16
- has an increased
, Auditing and Assurance Services Chapter 1
Study online at https://quizlet.com/_54ki1c
emphasis on critical - has more task-based activities
thinking - has an increased emphasis on critical thinking
11. - review internal con- Internal auditors:
trol systems to ensure - review internal control systems to ensure compliance with company poli-
compliance with com- cies
pany policies - review the effectiveness of achieving results compared to established
- review the effective- objectives
ness of achieving re- - perform audits of financial reports for limited external distribution
sults compared to es- - examine evidence and issue an opinion on the fairness of financial state-
tablished objectives ments
- perform audits of
financial reports for
limited external distri-
butions
12. - internal audit out- Services that public accounting firms are prohibited from providing to audit
sourcing clients under Sarbanes-Oxley include:
- investment services - internal audit outsourcing
- legal and expert ser- - corporate tax return preparation advice
vices - investment services
- actuarial services - legal and expert services
- actuarial services
13. False True or False: When considering established criteria for effective com-
munication, external auditors rely on financial and managerial models of
efficiency and effectiveness.
14. a. assurance services Which of the following statements are correct?
involve lending cred- a. assurance services involve lending credibility to both financial and nonfi-
ibility to both finan- nancial information
cial and nonfinancial b. CPAs who provide auditing services are prohibited from providing other
information types of assurance services
Study online at https://quizlet.com/_54ki1c
1. occurrence; existence As a general rule the ________ assertion relates to events, transactions, pre-
sentations and footnote disclosures and the __________ assertion relates
to account balances.
2. c. attestation engage- An audit is a specific type of:
ment a. assertion
b. explicit representation
c. attestation engagement
d. internal control
3. - provides tax services The PCAOB prohibits an accounting firm from providing auditing services to
for key company exec- a public company if the accounting firm:
utives - provides tax services for key company executives
- consults on "listed" - provides normal tax advice to the company
transaction tax strate- - consults on "listed" transaction tax strategies
gies - accepts fees that are based on tax outcomes
- accepts fees that
are based on tax out-
comes
4. True True or False: Understanding management assertions is a key component
of planning an audit.
5. - auditing and as- Which of the following statements are correct?
surance services are - The level of auditing activity provided increases as the size of the public
the largest source of accounting firm decreases.
revenue for most of - Auditing and assurance services are the largest source of revenue for most
the Big 4 accounting of the Big 4 accounting firms.
firms - Larger CPA firms usually provide more nonaudit and attestation services
- traditional finan- for their clients than smaller firms.
cial statement audits - Traditional financial statement audits are the most frequent assurance
are the most fre- engagement requested y most medium nonpublic companies.
, Auditing and Assurance Services Chapter 1
Study online at https://quizlet.com/_54ki1c
quent assurance en-
gagement requested
by most medium non-
public companies
6. existence; occurence The assertions about the actuality of each balance sheet and income state-
ment balance is ___________, while ______________ asserts that each
event and transaction actually happened.
7. - management or hu- Services that public accounting firms are prohibited from providing to audit
man resource ser- clients under Sarbanes-Oxley include:
vices - management or human resource services
- financial information - financial information system design and implementation
system design and - tax return preparation advice
implementation - bookkeeping and related services
- bookkeeping and re- - appraisal or valuation services
lated services
- appraisal or valua-
tion services
8. attestation engage- When a practitioner is engaged to issue a report on a subject matter or an
ment assertion about subject matter that is the responsibility of another party is
a(n): _________ _________
9. c. provides tax ser- The PCAOB argues that auditor independence would be impaired if the
vices to key execu- firm:
tives a. provides any type of tax advice to the company
b. prepares the company's corporate tax return
c. provides tax services to key executives
10. - has more task-based The new CPA exam:
activities - is now 14 hours instead of 16
- has an increased
, Auditing and Assurance Services Chapter 1
Study online at https://quizlet.com/_54ki1c
emphasis on critical - has more task-based activities
thinking - has an increased emphasis on critical thinking
11. - review internal con- Internal auditors:
trol systems to ensure - review internal control systems to ensure compliance with company poli-
compliance with com- cies
pany policies - review the effectiveness of achieving results compared to established
- review the effective- objectives
ness of achieving re- - perform audits of financial reports for limited external distribution
sults compared to es- - examine evidence and issue an opinion on the fairness of financial state-
tablished objectives ments
- perform audits of
financial reports for
limited external distri-
butions
12. - internal audit out- Services that public accounting firms are prohibited from providing to audit
sourcing clients under Sarbanes-Oxley include:
- investment services - internal audit outsourcing
- legal and expert ser- - corporate tax return preparation advice
vices - investment services
- actuarial services - legal and expert services
- actuarial services
13. False True or False: When considering established criteria for effective com-
munication, external auditors rely on financial and managerial models of
efficiency and effectiveness.
14. a. assurance services Which of the following statements are correct?
involve lending cred- a. assurance services involve lending credibility to both financial and nonfi-
ibility to both finan- nancial information
cial and nonfinancial b. CPAs who provide auditing services are prohibited from providing other
information types of assurance services
