Version 1 1
,Version 1 2
,Test Bank for Principles of Auditing & Other Assurance
Services (2024 Evergreen Release) by Ray Whittington
& Kurt Pany.
SOLUTIONs Are At The ENd Of
Each Chapter Chapter 1
StudeNt Name:_
1) AccouNtaNts Are Regulated By A Variety Of OrgaNizatioNs. Match The StatemeNts
With The Most Directly Related OrgaNizatioN:
● AccouNtiNg ANd Review Services Committee.
● AmericaN INstitute Of Certified Public AccouNtaNts.
● AuditiNg StaNdards Board.
● Federal AccouNtiNg StaNdards Advisory Board.
● FiNaNcial AccouNtiNg StaNdards Board.
● GeNeral AccouNtiNg Office.
● GoverNmeNt AccouNtiNg StaNdards Board.
● Public CompaNy AccouNtiNg Oversight Board.
● Securities ANd ExchaNge CommissioN.
● State Boards Of AccouNtaNcy.
OrgaNizatioNs May Be Used ONce, More ThaN ONce, Or Not At All.
StatemeNts OrgaNizatioNs
A. Develops AccouNtiNg StaNdards
For Public ANd NoNpublic
CompaNies.
B. Develops AccouNtiNg StaNdards
For The U.S. GoverNmeNt.
C. Improves StaNdards Of FiNaNcial
AccouNtiNg For State ANd Local
GoverNmeNt ENtities.
D. Issues AuditiNg StaNdards For
Public CompaNies.
E. Issues CPA Certificates.
F. Prepares The CPA Exam.
OrgaNizatioNs: AmericaN INstitute Of Certified Public AccouNtaNts, Federal AccouNtiNg
StaNdards Advisory Board, FiNaNcial AccouNtiNg StaNdards Board, GoverNmeNt AccouNtiNg
StaNdards Board, Public CompaNy AccouNtiNg Oversight Board, State Boards Of AccouNtaNcy.
Version 1 3
, 2) The SarbaNes-Oxley Act Of 2002 Made SigNificaNt Reforms For Public CompaNies
ANd Their Auditors.
a. Describe The EveNts That Led Up To The Passage Of The Act.
b. Describe The Major ChaNges Made By The Act.
3) MaNy People CoNfuse The RespoNsibilities Of The INdepeNdeNt Auditors ANd
The ClieNt's MaNagemeNt With Respect To Audited FiNaNcial StatemeNts.
a. Describe MaNagemeNt's RespoNsibility RegardiNg Audited FiNaNcial StatemeNts.
b. Describe The INdepeNdeNt Auditors' RespoNsibility RegardiNg Audited FiNaNcial
StatemeNts.
c. Evaluate The FollowiNg StatemeNt: "If The Auditors Disagree With MaNagemeNt
RegardiNg AN AccouNtiNg PriNciple Used IN The FiNaNcial StatemeNts, The Auditors
Should Express Their Views IN The Notes To The FiNaNcial StatemeNts."
4) AN INvestor Is CoNsideriNg INvestiNg IN ONe Of Two CompaNies. The CompaNies
Have Very Similar Reported FiNaNcial PositioN ANd Results Of OperatioNs. However, ONly
ONe Of The CompaNies Has Its FiNaNcial StatemeNts Audited.
a. Describe What Creates The DemaNd For AN Audit IN This SituatioN. INclude A
DiscussioN Of How Audited FiNaNcial StatemeNts Facilitate This INvestmeNt TraNsactioN,
ANd The Effect Of The Audit ON BusiNess Risk ANd INformatioN Risk.
b. IdeNtify The PoteNtial CoNsequeNces To The CompaNy Of Not HaviNg Its FiNaNcial
StatemeNts Audited.
5) A Summary Of FiNdiNgs Rather ThaN AssuraNce Is Most Likely To Be INcluded IN
A(N):
A) Agreed-UpoN Procedures Report.
B) CompilatioN Report.
C) Audit Report.
D) Review Report.
Version 1 4
,Version 1 2
,Test Bank for Principles of Auditing & Other Assurance
Services (2024 Evergreen Release) by Ray Whittington
& Kurt Pany.
SOLUTIONs Are At The ENd Of
Each Chapter Chapter 1
StudeNt Name:_
1) AccouNtaNts Are Regulated By A Variety Of OrgaNizatioNs. Match The StatemeNts
With The Most Directly Related OrgaNizatioN:
● AccouNtiNg ANd Review Services Committee.
● AmericaN INstitute Of Certified Public AccouNtaNts.
● AuditiNg StaNdards Board.
● Federal AccouNtiNg StaNdards Advisory Board.
● FiNaNcial AccouNtiNg StaNdards Board.
● GeNeral AccouNtiNg Office.
● GoverNmeNt AccouNtiNg StaNdards Board.
● Public CompaNy AccouNtiNg Oversight Board.
● Securities ANd ExchaNge CommissioN.
● State Boards Of AccouNtaNcy.
OrgaNizatioNs May Be Used ONce, More ThaN ONce, Or Not At All.
StatemeNts OrgaNizatioNs
A. Develops AccouNtiNg StaNdards
For Public ANd NoNpublic
CompaNies.
B. Develops AccouNtiNg StaNdards
For The U.S. GoverNmeNt.
C. Improves StaNdards Of FiNaNcial
AccouNtiNg For State ANd Local
GoverNmeNt ENtities.
D. Issues AuditiNg StaNdards For
Public CompaNies.
E. Issues CPA Certificates.
F. Prepares The CPA Exam.
OrgaNizatioNs: AmericaN INstitute Of Certified Public AccouNtaNts, Federal AccouNtiNg
StaNdards Advisory Board, FiNaNcial AccouNtiNg StaNdards Board, GoverNmeNt AccouNtiNg
StaNdards Board, Public CompaNy AccouNtiNg Oversight Board, State Boards Of AccouNtaNcy.
Version 1 3
, 2) The SarbaNes-Oxley Act Of 2002 Made SigNificaNt Reforms For Public CompaNies
ANd Their Auditors.
a. Describe The EveNts That Led Up To The Passage Of The Act.
b. Describe The Major ChaNges Made By The Act.
3) MaNy People CoNfuse The RespoNsibilities Of The INdepeNdeNt Auditors ANd
The ClieNt's MaNagemeNt With Respect To Audited FiNaNcial StatemeNts.
a. Describe MaNagemeNt's RespoNsibility RegardiNg Audited FiNaNcial StatemeNts.
b. Describe The INdepeNdeNt Auditors' RespoNsibility RegardiNg Audited FiNaNcial
StatemeNts.
c. Evaluate The FollowiNg StatemeNt: "If The Auditors Disagree With MaNagemeNt
RegardiNg AN AccouNtiNg PriNciple Used IN The FiNaNcial StatemeNts, The Auditors
Should Express Their Views IN The Notes To The FiNaNcial StatemeNts."
4) AN INvestor Is CoNsideriNg INvestiNg IN ONe Of Two CompaNies. The CompaNies
Have Very Similar Reported FiNaNcial PositioN ANd Results Of OperatioNs. However, ONly
ONe Of The CompaNies Has Its FiNaNcial StatemeNts Audited.
a. Describe What Creates The DemaNd For AN Audit IN This SituatioN. INclude A
DiscussioN Of How Audited FiNaNcial StatemeNts Facilitate This INvestmeNt TraNsactioN,
ANd The Effect Of The Audit ON BusiNess Risk ANd INformatioN Risk.
b. IdeNtify The PoteNtial CoNsequeNces To The CompaNy Of Not HaviNg Its FiNaNcial
StatemeNts Audited.
5) A Summary Of FiNdiNgs Rather ThaN AssuraNce Is Most Likely To Be INcluded IN
A(N):
A) Agreed-UpoN Procedures Report.
B) CompilatioN Report.
C) Audit Report.
D) Review Report.
Version 1 4
