Question 1: The most common way for users to obtain reliable information is to:
have an internal audit.
have an independent audit.
verify all information individually.
verify the information with management.
Question 2: Which of the following is not a SysTrust Services principle as defined by the AICPA?
Online privacy
Availability
Processing integrity
Operational integrity
Question 3: One objective of an operational audit is to:
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 4: An accountant:
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 5: 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):
accounting and bookkeeping service.
attestation service.
assurance service.
tax service.
Question 6: The three requirements for becoming a CPA include all but which of the following?
Uniform CPA examination requirement
Educational requirements
Character requirements
Experience requirement
Question 7: Which of the following is an element of the CPA's quality control system that should be considered in control policies and procedures?
Considering audit risk and materiality
Using statistical sampling techniques
Assigning personnel to engagements
Complying with laws and regulations
Question 8: Which of the following statements best describes the primary purpose of Statements on Auditing Standards?
They are guides intended to set forth auditing procedures that are applicable to a variety of situations.
They are procedural outlines that are intended to narrow the areas of inconsistency and divergence of auditor opinion.
They are authoritative statements, enforced through the Code of Professional Conduct, and are intended to limit the degree of auditor judgment.
They are interpretations that are intended to clarify the meaning of "generally accepted auditing standards."
Question 9: Which of the following is not one of the responsibilities of an auditor under the principles underlying an audit?
Possess appropriate competence and capabilities
Comply with ethical requirements
Plan work and supervise assistants
Maintain professional skepticism and exercise professional judgment
Question 10: Within the context of quality control, the primary purpose of continuing professional education and training activities is to enable a CPA firm to provide its personnel with:
technical training that assures proficiency as a valuation expert.
professional education that is required in order to perform with due professional care.
knowledge required to fulfill assigned responsibilities.
knowledge required to perform a peer review.
Question 11: Statements on Standards for Accounting and Review Services are issued by the:
Accounting and Review Services Committee.
Professional Ethics Executive Committee.
Securities and Exchange Commission.
Financial Accounting Standards Board.
Question 12: The purpose of establishing quality control policies and procedures to accept or continue a client relationship is to:
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 13: Whenever the client imposes restrictions on the scope of the audit, the auditor should be concerned that management may be trying to prevent discovery of misstatements. In such cases, the auditor will likely issue a:
disclaimer of opinion in all cases.
qualification of both scope and opinion in all cases.
disclaimer of opinion whenever materiality is in question.
qualification of both scope and opinion whenever materiality is in question.
Question 14: If the phrase "except for" is present in the opinion paragraph of the audit report, the auditor has issued a(n):
adverse opinion.
disclaimer of opinion.
unqualified opinion.
qualified opinion.
Question 15: Auditing standards for public companies are established by the:
SEC.
FASB.
PCAOB.
IRS.
Question 16: A CPA may wish to emphasize specific matters regarding the financial statements even though an unqualified opinion will be issued. Normally, such explanatory information is:
included in the scope paragraph.
included in the opinion paragraph.
included in a separate paragraph in the report.
included in the introductory paragraph.
Question 17: When there is uncertainty about a company's ability to continue as a going concern, the auditor's concern is the possibility that the client may not be able to continue its operations or meet its obligations for a "reasonable period of time." For this purpose, a reasonable period of time is considered not to exceed:
six months from the date of the financial statements.
one year from the date of the financial statements.
six months from the date of the audit report.
one year from the date of the audit report.
Question 18: If most or all users' decisions that are based on the financial statements are likely to be significantly affected, the materiality level is:
unrestricted.
material.
pervasive.
risky.
Question 19: Of the four parts of the AICPA's Code of Professional Conduct, which part is enforceable?
Ethical Rulings
Rules of Conduct
Principles
Interpretations
Question 20: A CPA firm may charge a contingent fee for:
an audit.
consulting services for a client for which they do not perform any attestation services.
the preparation of an original tax return for a client for which they do not perform any attestation services.
the preparation of an amended tax return
Question 21: ________ means that a person acts according to conscience, regardless of the situation.
Caring
Fairness
Integrity
Respect
Question 22: Freedom from ________ means the absence of relationships that might interfere with objectivity or integrity.
Answer
independence.
acts discreditable.
impartiality.
conflicts of interest.
Question 24: Which of the following is required for a firm to designate itself "Member of the American Institute of Certified Public Accountants" on its letterhead?
At least one of the partners must be a member of the AICPA.
All partners must be members of the AICPA.
The partners whose names appear in the firm name must be members of the AICPA.
A majority of the partners must be members of the AICPA.
Question 25: The AICPA's Code of Professional Conduct states that a CPA should maintain integrity and objectivity. The term "objectivity" in the Code refers to a CPA's ability to:
choose independently between alternate accounting principles and auditing standards.
distinguish between accounting practices that are acceptable and those that are not.
be unyielding in all matters dealing with auditing procedures.
maintain an impartial attitude on matters that come under the CPA's review.