Strayer ACC403 week 2 quiz 1

Question
1

In “auditing” financial accounting data, the primary
concern is with:
Answer

determining whether recorded information
properly reflects the economic events that occurred during the accounting
period.

determining if
fraud has occurred.

determining if
taxable income has been calculated correctly.

analyzing the
financial information to be sure that it complies with government
requirements.

Question 2

The Sarbanes-Oxley Act applies to which of the following
companies?
Answer

All companies

Privately held
companies

Public companies

All public
companies and privately held companies with assets greater than $500 million

Question 3

Which of the following isnotaSysTrustServices principle as defined by the
AICPA?
Answer

Online privacy

Availability

Processing
integrity

Operational integrity

Question 4

Which of the following services provides the lowest level of
assurance on a financial statement?
Answer

A review

An audit

Neither
service provides assurance on financial statements.

Each service
provides the same level of assurance on financial statements.

Question 5

An accountant:
Answer

must possess
expertise in the accumulation of audit evidence.

must decide
the number and types of items to test.

must have an understanding of the principles and
rules that provide the basis for preparing the accounting information.

must be a CPA.

Question 6

Recording, classifying, and summarizing economic events in a
logical manner for the purpose of providing financial information for decision
making is commonly called:
Answer

finance.

auditing.

accounting.

economics.

Question 7

Any service that requires a CPA firm to issue a report about the
reliability of an assertion that is made by another party is a(n):
Answer

accounting and
bookkeeping service.

attestation
service.

assurance service.

tax service.

Question 8

The use of the Certified Public Accountant title is regulated
by:
Answer

the federal
government.

state law through a licensing department or
agency of each state.

the American
Institute of Certified Public Accountants through the licensing departments
of the tax and auditing committees.

the Securities
and Exchange Commission.

Question 9

The most common way for users to obtain reliable information is
to:
Answer

have an
internal audit.

have an independent audit.

verify all
information individually.

verify the
information with management.

Question 10

An examination of part of an organization’s procedures and
methods for the purpose of evaluating efficiency and effectiveness is what type
of audit?
Answer

Operational
audit

Compliance
audit

Financial
statement audit

Production
audit

Question 11

One objective of an operational audit is to:
Answer

determine
whether the financial statements fairly present the entity’s operations.

determine if
the auditee is in compliance with GAAP.

make
recommendations for improving performance.

report on the
entity’s relative success in attaining profit maximization.

Question 12

Which of the following is considered audit evidence?
Answer

Oral statements
made by management

Written
Communications

Auditor
Observation

Y

N

N

Oral statements
made by management

Written
Communications

Auditor
Observation

N

Y

Y

Oral statements
made by management

Written
Communications

Auditor
Observation

Y

Y

Y

Oral statements
made by management

Written
Communications

Auditor
Observation

N

N

Y

Question 13

An audit to determine whether an entity is following specific
procedures or rules set down by some higher authority is classified as a(n):
Answer

audit of
financial statements.

compliance
audit.

operational
audit.

production
audit.

Question 14

A correct relationship among the auditor, the client, and the
external users is:
Answer

management of
a public company hires the independent auditor.

the audit
committee of a private company hires the independent auditor.

the client
provides capital to the external users.

the external
users can rely upon the auditor’s report to reduce information risk.

Question 15

Three common types of attestation services are:
Answer

audits of
historical financial statements, reviews of historical financial statements,
and audits of internal control over financial reporting.

audits of
historical financial information, verifications of historical financial
information, and attestations regarding internal controls.

reviews of
historical financial information, verifications of future financial
information, and attestations regarding internal controls.

audits of
historical financial information, reviews of controls related to investments,
and verifications of historical financial information.

Question 16

The methods used by a CPA firm to ensure that the firm meets is
professional responsibilities to clients and others is:
Answer

continuing
professional education.

compliance
with generally accepted reporting standards.

quality
control.

peer review.

Question 17

Hansen Corporation’s stock is listed on a national stock
exchange and registered with the Securities and Exchange Commission. Hansen’s
management hires a CPA to perform an independent audit of Hansen’s financial
statements. The primary objective of this audit is to provide assurance to the:
Answer

investors in
Hansen Corporation’s stock.

stock
exchange.

Securities and
Exchange Commission.

management of
Hansen Corporation.

Question 18

Members of the Public Company Accounting Oversight Board are
appointed and overseen by:
Answer

the U.S.
Congress.

the American
Institute of Certified Public Accountants.

the Auditing
Standards Board.

the Securities and Exchang e
Commission.

Question 19

The International Standards on Auditing (ISAs):
Answer

are issued
by the AICPA.

override a
country’s regulations governing the audit of a company.

has many of
the same standards as the Auditing Standards Board (ASB).

must be
followed by companies whose stock is traded in the U.S.

e Commission.

Question 20

To obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, the auditor must
fulfill several performance responsibilities, including:
Answer

verifying that
all audit work is performed by a CPA with a minimum of three years
experience.

obtaining
sufficient, appropriate audit evidence.

exercising
professional judgment.

providing an
opinion on the financial statements.

Question
21

The legal right to perform audits is granted to a CPA firm by
regulation of:
Answer

each state.

the Financial
Accounting Standards Board (FASB).

the American
Institute of Certified Public Accountants (AICPA).

the Audit
Standards Board.

Question 22

The purpose of establishing quality control policies and
procedures to accept or continue a client relationship is to:
Answer

provide
reasonable assurance that personnel are adequately trained to fulfill their
responsibilities.

monitor the
risk factors concerning misstatements that arise from the misappropriation of
assets.

document
objective criteria for the CPA firm’s peer review.

minimize the
likelihood of associating with a client whose management may lack integrity.

Question 23

The form that must be completed and filed with the Securities
and Exchange Commission whenever a company experiences a significant event that
is of interest to public investors is the:
Answer

Form S-1.

Form 8-K.

Form 10-K.

Form 10-Q.

Question
24

Statements on Standards for Accounting and Review Services are
issued by the:
Answer

Accounting and
Review Services Committee.

Professional
Ethics Executive Committee.

Securities and
Exchange Commission.

Financial
Accounting Standards Board.

Question
25

For privately held companies who is responsible for establishing
auditing standards?
Answer

Securities and
Exchange Commission

Public Company
Accounting Oversight Board

Auditing
Standards Board

National
Association of Accounting

Question 26

Standards issued by the Public Company Accounting Oversight
Board must be followed by CPAs who audit:
Answer

both private
and public companies.

public
companies only.

private
companies, public companies, and nonprofit entities.

private
companies only.

Question 27

The organization that is responsible for providing oversight for
auditors of public companies is called the ________.
Answer

Auditing
Standards Board

American
Institute of Certified Public Accountants

Public
Oversight Board

Public Company
Accounting Oversight Board

Question 28

The “Principles Underlying an Audit in Accordance with
Generally Accepted Auditing Principles” provides a framework to help
auditors:
Answer

understand the
ten GAAS standards.

obtain
complete assurance that the financial statements are free from any error.

report on the
financial statements.

prevent fraud.

Question 29

Historically auditing standards have been organized into three
categories, including:
Answer

Standards of
field work.

Purpose of an
audit.

Responsibilities
of the auditor.

Proper
planning and supervision.

Question 30

When assessing the risk of material misstatements in the
financial statements,
Answer

inadequate
internal control procedures will mitigate client business risk.

GAAS specifies
in detail how much and what types of evidence the auditor needs to obtain.

company
management is responsible for determining materiality levels.

the auditor
must have an understanding of the client’s business and industry.