1) The Sarbanes-Oxley Act of 2002, limits the non audit services that an audit firm can provide to public company audit clients. Which of the following is most likely to be a service that an auditor may provide to a public client?
a) Legal services
b) Tax compliance services
c) Internal audit outsourcing
d) Management consulting services
2) Under the Sarbanes-Oxley Act of 2002 (SOX)
a) The audit committee must rotate at least one seat on an annual basis
b) The chairman of the board of directors must be a financial expert
c) At least one member of the audit committee must be a financial expert
d) All members of the audit committee must be financial experts
3) According to COSO, the position or internal entity that is best suited, as part of the enterprise risk management process, to devise and execute risk procedures for a particular department is
a) The internal audit department
b) The chief executive officer
c) A manager within the department
d) The audit committee
4) The Sarbanes-Oxley Act of 2002 (SOX) imposes which of the following requirements?
a) The board of directors must be composed entirely of indecent shareholders.
b) Once the audit committee has selected the independent public accounting firm, the committee must not interfere with the firm's conduct of the financial statement audit.
c) The audit committee must be composed entirely of independent members of the board
d) At least one member of the audit committee must be a former partner of the independent public accounting firm.
5) Each of the following is a method to evaluate internal controls based on the framework set by the committee of sponsoring organizations (COSO), except
a) Distinguishing economy risk from industry risk and enter price risk
b) Identifying mitigating controls to prevent losses
c) Evaluating internal control systems that focus first on risk identification of specific losses
d) Testing to determine whether the controls are operating effectively and have prevented losses in the past.
6) Which of the following is not a component of internal control?
a) The control environment
b) Monitoring
c) Control risk
d) Information and communication
7) Under the reporting requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (SOX), the CEO and CFO must include a statement in the annual report to the effect that.
a) The board of directors has taken responsibility for establishing and maintaining an adequate system of internal control over financial reporting
b) The issuer has used the COSO nodal to design and assess the effectiveness of its system of internal control
c) The system of internal control has been assessed by an independent public accounting firm that is registered with the PCAOB
d) The system of internal control has been assessed by an independent public accounting firm that is not currently that subject of any PCAOB investigation