Question 1

What is the size of most public accounting firms in Canada?

Accepted Answer

A)  fewer than 25 employees 
B)  between 25 and 49 employees 
C)  between 50 and 75 employees 
D)  more than 75 employees 
A)  fewer than 25 employees 
B)  between 25 and 49 employees 
C)  between 50 and 75 employees 
D)  more than 75 employees

Question 2

National accounting firms in 2013 were those with

Accepted Answer

A)  offices in most major cities and revenues over $100 million. 
B)  international representation in most cities around the world. 
C)  offices in all major cities in Canada and revenues over $75 million. 
D)  national and international affiliations providing services in all major centres. 
A)  offices in most major cities and revenues over $100 million. 
B)  international representation in most cities around the world. 
C)  offices in all major cities in Canada and revenues over $75 million. 
D)  national and international affiliations providing services in all major centres.

Question 3

There are many elements of quality control at the firm level. Which element does "adequate hiring policies (and documentation of their implementation) that ensure competence and integrity of personnel" relate to?

Accepted Answer

A)  leadership and responsibilities within the firm 
B)  independence 
C)  general human resource policies 
D)  extent of professional development 
A)  leadership and responsibilities within the firm 
B)  independence 
C)  general human resource policies 
D)  extent of professional development

Question 4

What is one of the ways that high-profile business failures (such as Enron, WorldCom, and Nortel) have affected the auditing profession?

Accepted Answer

A)  raised the cost of hiring accounting-firm professionals 
B)  resulted in a need for decreased paperwork on audits 
C)  lowered the number of professionals working on an audit engagement 
D)  created increased focus on standards and high-quality audits 
A)  raised the cost of hiring accounting-firm professionals 
B)  resulted in a need for decreased paperwork on audits 
C)  lowered the number of professionals working on an audit engagement 
D)  created increased focus on standards and high-quality audits

Question 5

What are the different business organization structures that an accountant may use? What are the advantages of these structures?

Accepted Answer

Accountants may establish a sole proprie

Question 6

For a CPA working as a sole practitioner or working in a small public accounting office, the provincial practice inspectors will likely come to review audit files

Accepted Answer

A)  every three years. 
B)  every five years. 
C)  every year. 
D)  never: files are not reviewed in person. 
A)  every three years. 
B)  every five years. 
C)  every year. 
D)  never: files are not reviewed in person.

Question 7

A key difference between the PCAOB in the U.S. and the CPAB in Canada is that

Accepted Answer

A)  the CPAB is involved in the development of auditing standards. 
B)  the PCAOB is involved in the development of auditing standards. 
C)  the PCAOB conducts practice inspections of public company auditors. 
D)  the CPAB conducts practice inspections of public company auditors. 
A)  the CPAB is involved in the development of auditing standards. 
B)  the PCAOB is involved in the development of auditing standards. 
C)  the PCAOB conducts practice inspections of public company auditors. 
D)  the CPAB conducts practice inspections of public company auditors.

Question 8

A strategic and risk-based audit approach means that the client must be assessed in the context of the business environment, including which of the following?

Accepted Answer

A)  ensuring that accounting complies with IFRS or ASPE 
B)  completion of an independence threat analysis with supporting documentation 
C)  corporate governance process and quality of internal controls 
D)  talking to those audit committee members who are also part of management 
A)  ensuring that accounting complies with IFRS or ASPE 
B)  completion of an independence threat analysis with supporting documentation 
C)  corporate governance process and quality of internal controls 
D)  talking to those audit committee members who are also part of management

Question 9

What is the purpose of assurance standards issued by the AASB (Auditing and Assurance Standards Board) in Canada?

Accepted Answer

A)  to expose the newly established standards to as many groups as possible 
B)  to provide current copies of the standards in advance of being placed in the CPA Handbook 
C)  to provide supporting reference material and other resources 
D)  to set standards for engagements such as reviews and compilations 
A)  to expose the newly established standards to as many groups as possible 
B)  to provide current copies of the standards in advance of being placed in the CPA Handbook 
C)  to provide supporting reference material and other resources 
D)  to set standards for engagements such as reviews and compilations

Question 10

Canadian Auditing Standards (including the CPA Canada Handbook) are the authoritative standards for the conduct of financial statement audits in Canada. How would this affect the audit of a Canadian company that is owned by a Swedish company that must also report using Swedish (International) auditing standards?

Accepted Answer

•the audit of the foreign subsidiary mus

Question 11

When conducting an audit, the auditor should look at Canadian Auditing Standards as

Accepted Answer

A)  minimum standards of performance. 
B)  normal standards of performance. 
C)  ultimate standards of performance. 
D)  practical standards of performance. 
A)  minimum standards of performance. 
B)  normal standards of performance. 
C)  ultimate standards of performance. 
D)  practical standards of performance.

Question 12

When the CPA Canada Handbook is silent on an auditing issue, which of the following is the best of other authoritative sources that the auditor could use?

Accepted Answer

A)  Assurance and Related Services Guidelines (AuG) 
B)  audit firm practice manuals 
C)  past practice at the client 
D)  reference to audit standards partner 
A)  Assurance and Related Services Guidelines (AuG) 
B)  audit firm practice manuals 
C)  past practice at the client 
D)  reference to audit standards partner

Question 13

For each of the following situations, state which element of the profession or society encourages the public accountant to conduct himself at a high level.
A) Marco attended a seminar on the topic of business combinations to ensure he was up to date with the new standard.
B) Barbara referred to the standard on hedging to ensure that her client had the appropriate documentation to qualify for hedge accounting.
C) Gretchen refused to perform the audit of her uncle's restaurant chain.
D) Walid worked overtime all week to ensure that the file was properly documented and met the quality control requirements.
E) Sarah took the summer off to study for the Common Final Examination (CFE) to ensure that she would pass the entrance exam to become a Chartered Professional Accountant.

Accepted Answer

A)Continuing Education
B)CPA C

Question 14

There are many elements of quality control at the firm level. Which element does "employees should be adequately trained in the skills needed to conduct audits and reviews" relate to?

Accepted Answer

A)  leadership and responsibilities within the firm 
B)  independence 
C)  general human resource policies 
D)  extent of professional development 
A)  leadership and responsibilities within the firm 
B)  independence 
C)  general human resource policies 
D)  extent of professional development

Question 15

CAS 200 explains that as part of general qualifications and conduct, the auditor should be professionally competent. Which of the following help the auditor achieve competence?

Accepted Answer

A)  using due care in the performance of all aspects of auditing 
B)  having an objective state of mind and independence from the client 
C)  having formal education and practical experience, and pursuing continuing education 
D)  conducting the audit using a risk-based approach and being skeptical 
A)  using due care in the performance of all aspects of auditing 
B)  having an objective state of mind and independence from the client 
C)  having formal education and practical experience, and pursuing continuing education 
D)  conducting the audit using a risk-based approach and being skeptical

Question 16

There are many elements of quality control at the firm level. Which element does the statement "quality control procedures should be developed, documented, implemented, and communicated" fall under?

Accepted Answer

A)  leadership and responsibilities within the firm 
B)  general ethical requirements 
C)  general human resource policies 
D)  engagement quality control review 
A)  leadership and responsibilities within the firm 
B)  general ethical requirements 
C)  general human resource policies 
D)  engagement quality control review

Question 17

During which phase(s) of the financial statement audit does the auditor "evaluate evidence" when using a risk assessment approach?

Accepted Answer

A)  the risk assessment phase 
B)  the risk response phase 
C)  the reporting process phase 
D)  the risk assessment, risk response, and reporting phases 
A)  the risk assessment phase 
B)  the risk response phase 
C)  the reporting process phase 
D)  the risk assessment, risk response, and reporting phases

Question 18

There are many elements of quality control at the firm level. Which element does "processes should exist for following up internal and external complaints" relate to?

Accepted Answer

A)  engagement performance 
B)  engagement quality control review 
C)  documentation 
D)  general human resource policies 
A)  engagement performance 
B)  engagement quality control review 
C)  documentation 
D)  general human resource policies

Question 19

There are many elements of quality control at the firm level. Which element does "work assignments that match employee competence and performance evaluations related to audit quality" relate to?

Accepted Answer

A)  leadership and responsibilities within the firm 
B)  independence 
C)  general human resource policies 
D)  extent of professional development 
A)  leadership and responsibilities within the firm 
B)  independence 
C)  general human resource policies 
D)  extent of professional development

Question 20

Adequate planning and execution to reduce risk to an acceptable level is a requirement of which category of generally accepted auditing standards?

Accepted Answer

A)  general 
B)  examination 
C)  reporting 
D)  quality 
A)  general 
B)  examination 
C)  reporting 
D)  quality

What is the size of most public accounting firms in Canada?

National accounting firms in 2013 were those with

There are many elements of quality control at the firm level. Which element does "adequate hiring policies (and documentation of their implementation) that ensure competence and integrity of personnel" relate to?

What is one of the ways that high-profile business failures (such as Enron, WorldCom, and Nortel) have affected the auditing profession?

What are the different business organization structures that an accountant may use? What are the advantages of these structures?

For a CPA working as a sole practitioner or working in a small public accounting office, the provincial practice inspectors will likely come to review audit files

A key difference between the PCAOB in the U.S. and the CPAB in Canada is that

A strategic and risk-based audit approach means that the client must be assessed in the context of the business environment, including which of the following?

What is the purpose of assurance standards issued by the AASB (Auditing and Assurance Standards Board) in Canada?

When conducting an audit, the auditor should look at Canadian Auditing Standards as

When the CPA Canada Handbook is silent on an auditing issue, which of the following is the best of other authoritative sources that the auditor could use?

There are many elements of quality control at the firm level. Which element does "employees should be adequately trained in the skills needed to conduct audits and reviews" relate to?

CAS 200 explains that as part of general qualifications and conduct, the auditor should be professionally competent. Which of the following help the auditor achieve competence?

There are many elements of quality control at the firm level. Which element does the statement "quality control procedures should be developed, documented, implemented, and communicated" fall under?

During which phase(s) of the financial statement audit does the auditor "evaluate evidence" when using a risk assessment approach?

There are many elements of quality control at the firm level. Which element does "processes should exist for following up internal and external complaints" relate to?

There are many elements of quality control at the firm level. Which element does "work assignments that match employee competence and performance evaluations related to audit quality" relate to?

Adequate planning and execution to reduce risk to an acceptable level is a requirement of which category of generally accepted auditing standards?

The Demand for Audit and Other Assurance Services

Legal Liability

Professional Judgment and Ethics

Audit Responsibilities and Objectives

Client Acceptance and Planning the Audit

Materiality and Risk

Internal Controls and Control Risk

Audit Evidence

Audit Strategy and Audit Program

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters

Exam 2: The Public Accounting Profession and Audit Quality

What is the size of most public accounting firms in Canada?

National accounting firms in 2013 were those with

There are many elements of quality control at the firm level. Which element does "adequate hiring policies (and documentation of their implementation) that ensure competence and integrity of personnel" relate to?

What is one of the ways that high-profile business failures (such as Enron, WorldCom, and Nortel) have affected the auditing profession?

What are the different business organization structures that an accountant may use? What are the advantages of these structures?

For a CPA working as a sole practitioner or working in a small public accounting office, the provincial practice inspectors will likely come to review audit files

A key difference between the PCAOB in the U.S. and the CPAB in Canada is that

A strategic and risk-based audit approach means that the client must be assessed in the context of the business environment, including which of the following?

What is the purpose of assurance standards issued by the AASB (Auditing and Assurance Standards Board) in Canada?

When conducting an audit, the auditor should look at Canadian Auditing Standards as

When the CPA Canada Handbook is silent on an auditing issue, which of the following is the best of other authoritative sources that the auditor could use?

There are many elements of quality control at the firm level. Which element does "employees should be adequately trained in the skills needed to conduct audits and reviews" relate to?

CAS 200 explains that as part of general qualifications and conduct, the auditor should be professionally competent. Which of the following help the auditor achieve competence?

There are many elements of quality control at the firm level. Which element does the statement "quality control procedures should be developed, documented, implemented, and communicated" fall under?

During which phase(s) of the financial statement audit does the auditor "evaluate evidence" when using a risk assessment approach?

There are many elements of quality control at the firm level. Which element does "processes should exist for following up internal and external complaints" relate to?

There are many elements of quality control at the firm level. Which element does "work assignments that match employee competence and performance evaluations related to audit quality" relate to?

Adequate planning and execution to reduce risk to an acceptable level is a requirement of which category of generally accepted auditing standards?

The Demand for Audit and Other Assurance Services

Legal Liability

Professional Judgment and Ethics

Audit Responsibilities and Objectives

Client Acceptance and Planning the Audit

Materiality and Risk

Internal Controls and Control Risk

Audit Evidence

Audit Strategy and Audit Program

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters