Question 1

Standards issued by the Public Company Accounting Oversight Board must be followed by CPAs who audit

Accepted Answer

A) both private and public companies. 
B) public companies only. 
C) private companies,public companies,and nonprofit entities. 
D) private companies only. 
A) both private and public companies. 
B) public companies only. 
C) private companies,public companies,and nonprofit entities. 
D) private companies only.

Question 2

What are the major functions of the AICPA?

Accepted Answer

Major functions of the AICPA include:
•S

Question 3

The methods used by a CPA firm to ensure that the firm meets is professional responsibilities to clients and others is

Accepted Answer

A) continuing professional education. 
B) compliance with generally accepted reporting standards. 
C) quality control. 
D) peer review. 
A) continuing professional education. 
B) compliance with generally accepted reporting standards. 
C) quality control. 
D) peer review.

Question 4

All of the Big Four accounting firms and many of the smaller CPA firms now operate as limited liability partnerships.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) technical training that assures proficiency as a valuation expert. 
B) professional education that is required in order to perform with due professional care. 
C) knowledge required to fulfill assigned responsibilities. 
D) knowledge required to perform a peer review. 
A) technical training that assures proficiency as a valuation expert. 
B) professional education that is required in order to perform with due professional care. 
C) knowledge required to fulfill assigned responsibilities. 
D) knowledge required to perform a peer review.

Question 6

To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,the auditor must fulfill several performance responsibilities,including

Accepted Answer

A) verifying that all audit work is performed by a CPA with a minimum of three years' experience. 
B) obtaining sufficient,appropriate audit evidence. 
C) exercising professional judgment. 
D) providing an opinion on the financial statements. 
A) verifying that all audit work is performed by a CPA with a minimum of three years' experience. 
B) obtaining sufficient,appropriate audit evidence. 
C) exercising professional judgment. 
D) providing an opinion on the financial statements.

Question 7

An auditor need not abide by a particular auditing standard if the auditor believes that

Accepted Answer

A) the issue in question is immaterial in amount. 
B) more expertise is needed to fulfill the requirement. 
C) the requirement of the standard has not been addressed by the PCAOB. 
D) fraud is involved. 
A) the issue in question is immaterial in amount. 
B) more expertise is needed to fulfill the requirement. 
C) the requirement of the standard has not been addressed by the PCAOB. 
D) fraud is involved.

Question 8

List and describe the six organizational structures available to CPA firms.

Accepted Answer

CPA firms can take one of six organizati

Question 9

The principles underlying an audit

Accepted Answer

A) contain the procedures that must be followed during an audit. 
B) carry the same authority as AICPA auditing standards. 
C) only apply to the audits of public companies 
D) provide structure for the clarified Codification. 
A) contain the procedures that must be followed during an audit. 
B) carry the same authority as AICPA auditing standards. 
C) only apply to the audits of public companies 
D) provide structure for the clarified Codification.

Question 10

The "Principles Underlying an Audit in Accordance with Generally Accepted Auditing Principles" provides a framework to help auditors

Accepted Answer

A) understand the ten GAAS standards. 
B) obtain complete assurance that the financial statements are free from any error. 
C) report on the financial statements. 
D) prevent fraud. 
A) understand the ten GAAS standards. 
B) obtain complete assurance that the financial statements are free from any error. 
C) report on the financial statements. 
D) prevent fraud.

Question 11

Form 10-K must be filed with the SEC whenever a public company experiences a significant event.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following does not describe a size category for a CPA firm?

Accepted Answer

A) Big Four national firms 
B) Big Four international firms 
C) local firms 
D) national and regional firms 
A) Big Four national firms 
B) Big Four international firms 
C) local firms 
D) national and regional firms

Question 13

Which of the following is not a characteristic of a small firm?

Accepted Answer

A) Most small firms have fewer than 25 professionals. 
B) Small firms perform audits on small and not-for-profit businesses. 
C) Tax services are more important than auditing services to the small firm. 
D) Small firms are prohibited by the SEC from auditing publicly traded companies. 
A) Most small firms have fewer than 25 professionals. 
B) Small firms perform audits on small and not-for-profit businesses. 
C) Tax services are more important than auditing services to the small firm. 
D) Small firms are prohibited by the SEC from auditing publicly traded companies.

Question 14

The organization that is responsible for providing oversight for auditors of public companies is called the

Accepted Answer

A) Auditing Standards Board. 
B) American Institute of Certified Public Accountants. 
C) Public Oversight Board. 
D) Public Company Accounting Oversight Board. 
A) Auditing Standards Board. 
B) American Institute of Certified Public Accountants. 
C) Public Oversight Board. 
D) Public Company Accounting Oversight Board.

Question 15

Membership in the AICPA is mandatory for all licensed practicing CPAs.

Accepted Answer

A) True 
 B)False

Question 16

The Public Company Accounting Oversight Board (PCAOB)provides oversight to auditors of publicly traded and private companies.

Accepted Answer

A) True 
 B)False

Question 17

________ is an attitude that includes a questioning mind,being alert to conditions that might indicate possible misstatements due to fraud or error,and a critical assessment of audit evidence.

Accepted Answer

A) Reasonableness 
B) Diligence 
C) Professional skepticism 
D) Competence 
A) Reasonableness 
B) Diligence 
C) Professional skepticism 
D) Competence

Question 18

The overall purpose of the Securities and Exchange Commission is to assist in providing investors with reliable information upon which to make investment decisions.

Accepted Answer

A) True 
 B)False

Question 19

The PCAOB requires annual inspections of accounting firms that audit more than ten public companies.

Accepted Answer

A) True 
 B)False

Question 20

Sarbanes-Oxley and the Securities and Exchange Commission restrict auditors from providing many consulting services to their publicly traded audit clients.

Accepted Answer

A) True 
 B)False

Exam 2: The Cpa Profession

Standards issued by the Public Company Accounting Oversight Board must be followed by CPAs who audit

What are the major functions of the AICPA?

The methods used by a CPA firm to ensure that the firm meets is professional responsibilities to clients and others is

All of the Big Four accounting firms and many of the smaller CPA firms now operate as limited liability partnerships.

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

To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,the auditor must fulfill several performance responsibilities,including

An auditor need not abide by a particular auditing standard if the auditor believes that

List and describe the six organizational structures available to CPA firms.

The principles underlying an audit

The "Principles Underlying an Audit in Accordance with Generally Accepted Auditing Principles" provides a framework to help auditors

Form 10-K must be filed with the SEC whenever a public company experiences a significant event.

Which of the following does not describe a size category for a CPA firm?

Which of the following is not a characteristic of a small firm?

The organization that is responsible for providing oversight for auditors of public companies is called the

Membership in the AICPA is mandatory for all licensed practicing CPAs.

The Public Company Accounting Oversight Board (PCAOB)provides oversight to auditors of publicly traded and private companies.

________ is an attitude that includes a questioning mind,being alert to conditions that might indicate possible misstatements due to fraud or error,and a critical assessment of audit evidence.

The overall purpose of the Securities and Exchange Commission is to assist in providing investors with reliable information upon which to make investment decisions.

The PCAOB requires annual inspections of accounting firms that audit more than ten public companies.

Sarbanes-Oxley and the Securities and Exchange Commission restrict auditors from providing many consulting services to their publicly traded audit clients.

The Demand for Audit and Other Assurance Services

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls,

Completing the Tests in the Acquisition and Payment Cycle:

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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