Multiple Choice Answers

1. A summary of findings rather than assurance is most likely to be included in a(n): (Points : 10)
agreed-upon procedures report.
compilation report.
examination report.
review report.

2. The Government Accountability Office (GAO): (Points : 10)
is primarily concerned with rapid processing of all accounts payable incurred by the federal government.
conducts operational audits and reports the results to Congress.
is a multinational organization of professional accountants.
is primarily concerned with budgets and forecasts approved by the SEC.

3. Which of the following is not included as a part of the description of the auditor’s responsibility in a nonpublic company unmodified report? (Points : 10)
The audit was performed in accordance with generally accepted accounting principles.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment.
An audit includes evaluating the appropriateness of accounting policies used.

4. When compared to an audit performed prior to 1900, an audit today: (Points : 10)
is more likely to include tests of compliance with laws and regulations.
is less likely to include consideration of the effectiveness of internal control.
has bank loan officers as the primary financial statement user group.
includes a more detailed examination of all individual transactions.

5. An attestation engagement: (Points : 10)
has as its primary source of standards the assurance standards.
includes a report on subject matter or on an assertion about subject matter.
includes search and verification procedures for all major accounts.
is ordinarily an examination, review, or compilation engagement.

6. Which of the following is one of the elements of AICPA quality control? (Points : 10)
Assurance of proper levels of association
Due professional care
Engagement performance
Supervision

7. The risk associated with a company’s survival and profitability is referred to as: (Points : 10)
business risk.
information risk.
detection risk.
control risk.

8. Attestation risk is limited to a low level in which of the following engagement(s)? (Points : 10)
Both examinations and reviews.
Examinations, but not reviews.
Reviews, but not examinations.
Neither examinations nor reviews.

9. Which of the following is not an underlying premise of an audit? (Points : 10)
Management must provide the auditor with all information relevant to the preparation and fair presentation of the financial statements.
Management and the auditors have responsibility for the preparation of financial statements in accordance with the applicable financial reporting framework.
Where appropriate, the auditor may obtain information from those charged with governance.
The auditors should be provided unrestricted access to those within the entity from whom the auditor determines it necessary to obtain audit evidence.

10. The organization charged with protecting investors and the public by requiring full disclosure of financial information by companies offering securities to the public is the: (Points : 10)
Auditing Standards Board.
Financial Accounting Standards Board.
Government Accounting Standards Boards.
Securities and Exchange Commission.