Response to the following multiple choice questions:
1. A CPA, while performing an audit, strives to achieve independence in appearance in order to:
A) reduce risk and liability.
B) comply with the generally accepted standards of field work.
C) become independent in fact.
D) maintain public confidence in the profession.
2. Which of the following is not an underlying premise of an audit?
A) Management must provide the auditor with all information relevant to the preparation and fair presentation of the financial statements.
B) Management and the auditors have responsibility for the preparation of financial statements in accordance with the applicable financial reporting framework
C) Where appropriate, the auditor may obtain information from those charged with governance.
D) The auditors should be provided unrestricted access to those within the entity from whom the auditor determines it necessary to obtain audit evidence.
3. A peer review in which the peer reviewers study and appraise a CPA firm's system of quality control to perform accounting and auditing work is referred to as a(n):
A) Engagement review.
B) Inspection review.
C) Supervision review.
D) System review.
4. Of the following, which are current types of peer review?
System Review Engagement Review
A) Yes Yes
B) Yes No
C) No Yes
D) No No
A) Option A
B) Option B
C) Option C
D) Option D
5. Which AICPA quality control standard would most likely be satisfied when a CPA firm maintains records indicating which partners or employees of the firm were previously employed by the CPA firm's clients?
A) Professional relationship.
B) Engagement performance.
C) Relevant ethical requirements.
D) Monitoring.
6. An audit provides reasonable assurance of detecting which of the following types of material illegal acts?
Direct Effect Without a Direct Effect
A) Yes Yes
B) Yes No
C) No Yes
D) No No
A) Option A
B) Option B
C) Option C
D) Option D
7. Authoritative GAAP sources include:
FASB Concepts Statements FASB Codification
A) Yes Yes
B) Yes No
C) No Yes
D) No No
A) Option A
B) Option B
C) Option C
D) Option D
8. A procedure in which a quality control partner periodically tests the application of quality control procedures is most directly related to which quality control element?
A) Engagement performance
B) Leadership responsibilities for quality with the firm.
C) Monitoring
D) Human Resources
9. A set of criteria used to determine measurement, recognition, representation, and disclosure of all material items appearing in the financial statements is referred to as a(n)
A) Financial reporting framework.
B) Public Company Accounting Oversight Board Criteria.
C) Quality control presentation standard.
D) Special purpose audit standard.