Question 1

Which of the following is an element of the CPA's quality control system that should be considered in establishing its quality control policies and procedures?

Accepted Answer

A) Considering audit risk and materiality 
B) Using statistical sampling techniques 
C) Assigning personnel to engagements 
D) Complying with laws and regulations 
A) Considering audit risk and materiality 
B) Using statistical sampling techniques 
C) Assigning personnel to engagements 
D) Complying with laws and regulations C

Question 2

The form that must be filed with the Securities and Exchange Commission whenever a company plans to issue new securities to the public is the:

Accepted Answer

A) Form S-1. 
B) Form 8-K. 
C) Form 10-K. 
D) Form 10-Q. 
A) Form S-1. 
B) Form 8-K. 
C) Form 10-K. 
D) Form 10-Q. A

Question 3

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. C

Question 4

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 5

Distinguish between generally accepted auditing standards (GAAS)and generally accepted accounting principles (GAAP).What professional organization establishes GAAS?
 What professional organization establishes GAAP?

Accepted Answer

Generally accepted auditing standards ar

Question 6

An organizational structure where professional services are provided by one or more shareholders.

Accepted Answer

A) AICPA 
B) PCAOB 
C) Securities Exchange Commission 
D) Form 10-k 
E) IAASB
F)Form S-1
G)Due professional care
H)Limited Liability Partnership
I)Professional Corporation
J)Limited Liability Company
K)Peer review
L)1933 Securities Act
M)1934 Securities Act
N) Form 8-k
O) State Regulation
P) Code of Professional Conduct
Q) Quality Control Standards
R) GAAS Standards 
A) AICPA 
B) PCAOB 
C) Securities Exchange Commission 
D) Form 10-k 
E) IAASB
F)Form S-1
G)Due professional care
H)Limited Liability Partnership
I)Professional Corporation
J)Limited Liability Company
K)Peer review
L)1933 Securities Act
M)1934 Securities Act
N) Form 8-k
O) State Regulation
P) Code of Professional Conduct
Q) Quality Control Standards
R) GAAS Standards

Question 7

Quality controls are established for the entire CPA firm whereas GAAS are applicable to the individual engagement.

Accepted Answer

A) True 
 B)False

Question 8

Any public accounting firm can be a member of the AICPA if the firm meets the membership requirements.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not one of the responsibilities of an auditor under the principles underlying an audit?

Accepted Answer

A) Possess appropriate competence and capabilities 
B) Comply with ethical requirements 
C) Plan work and supervise assistants 
D) Maintain professional skepticism and exercise professional judgment 
A) Possess appropriate competence and capabilities 
B) Comply with ethical requirements 
C) Plan work and supervise assistants 
D) Maintain professional skepticism and exercise professional judgment

Question 10

Listed below are policies or procedures that the Crystal Cove audit firm has in place.For each identified policy or procedure state if it is a Generally Accepted Audit Standard (GAAS)or a Quality Control Standard.

Accepted Answer

1.a
2.b
3.

Question 11

Which of the following are audit standards used in professional practice by audit firms?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 12

An organizational structure where the owners are taxed like a partnership and have limited personal liability.

Accepted Answer

A) AICPA 
B) PCAOB 
C) Securities Exchange Commission 
D) Form 10-k 
E) IAASB
F)Form S-1
G)Due professional care
H)Limited Liability Partnership
I)Professional Corporation
J)Limited Liability Company
K)Peer review
L)1933 Securities Act
M)1934 Securities Act
N) Form 8-k
O) State Regulation
P) Code of Professional Conduct
Q) Quality Control Standards
R) GAAS Standards 
A) AICPA 
B) PCAOB 
C) Securities Exchange Commission 
D) Form 10-k 
E) IAASB
F)Form S-1
G)Due professional care
H)Limited Liability Partnership
I)Professional Corporation
J)Limited Liability Company
K)Peer review
L)1933 Securities Act
M)1934 Securities Act
N) Form 8-k
O) State Regulation
P) Code of Professional Conduct
Q) Quality Control Standards
R) GAAS Standards

Question 13

All CPA firms registered with the PCAOB are required to undergo a peer review annually.

Accepted Answer

A) True 
 B)False

Question 14

Discuss the relationship between quality control and generally accepted auditing standards.

Accepted Answer

For a CPA firm, quality control encompas

Question 15

The difference between the Securities Act of 1933 and the Securities Act of 1934 is that only the 1934 act requires audited financial statements.

Accepted Answer

A) True 
 B)False

Question 16

In order to properly plan and perform an audit, an important fact for both the auditor and the client to understand is that:

Accepted Answer

A) the internal control policies and procedures are developed by the auditors. 
B) the purpose of an audit is to prevent fraud. 
C) management is responsible for the preparation of the financial statements. 
D) management can restrict the auditor's access to important information relevant to the financial statements. 
A) the internal control policies and procedures are developed by the auditors. 
B) the purpose of an audit is to prevent fraud. 
C) management is responsible for the preparation of the financial statements. 
D) management can restrict the auditor's access to important information relevant to the financial statements.

Question 17

Statements on Auditing Standards (SASs)are issued by the Public Company Accounting Oversight Board.

Accepted Answer

A) True 
 B)False

Question 18

List and describe the three factors that influence the organizational structure of all CPA firms.What are the most common forms of CPA firm organization?

Accepted Answer

The three factors that influence the org

Question 19

Assume the Public Company Accounting Oversight Board (PCAOB)identifies a violation during its inspection of a registered accounting firm.The PCAOB:

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 20

The form that must be completed and filed with the Securities and Exchange Commission whenever a company experiences a significant event that is of interest to public investors is the:

Accepted Answer

A) Form S-1. 
B) Form 8-K. 
C) Form 10-K. 
D) Form 10-Q. 
A) Form S-1. 
B) Form 8-K. 
C) Form 10-K. 
D) Form 10-Q.

Exam 2: The Cpa Profession

Which of the following is an element of the CPA's quality control system that should be considered in establishing its quality control policies and procedures?

The form that must be filed with the Securities and Exchange Commission whenever a company plans to issue new securities to the public is the:

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

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

Distinguish between generally accepted auditing standards (GAAS)and generally accepted accounting principles (GAAP).What professional organization establishes GAAS? What professional organization establishes GAAP?

An organizational structure where professional services are provided by one or more shareholders.

Quality controls are established for the entire CPA firm whereas GAAS are applicable to the individual engagement.

Any public accounting firm can be a member of the AICPA if the firm meets the membership requirements.

Which of the following is not one of the responsibilities of an auditor under the principles underlying an audit?

Listed below are policies or procedures that the Crystal Cove audit firm has in place.For each identified policy or procedure state if it is a Generally Accepted Audit Standard (GAAS)or a Quality Control Standard.

Which of the following are audit standards used in professional practice by audit firms?

An organizational structure where the owners are taxed like a partnership and have limited personal liability.

All CPA firms registered with the PCAOB are required to undergo a peer review annually.

Discuss the relationship between quality control and generally accepted auditing standards.

The difference between the Securities Act of 1933 and the Securities Act of 1934 is that only the 1934 act requires audited financial statements.

In order to properly plan and perform an audit, an important fact for both the auditor and the client to understand is that:

Statements on Auditing Standards (SASs)are issued by the Public Company Accounting Oversight Board.

List and describe the three factors that influence the organizational structure of all CPA firms.What are the most common forms of CPA firm organization?

Assume the Public Company Accounting Oversight Board (PCAOB)identifies a violation during its inspection of a registered accounting firm.The PCAOB:

The form that must be completed and filed with the Securities and Exchange Commission whenever a company experiences a significant event that is of interest to public investors is the:

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

Internal Control, Control Risk, and Section 404 Audits

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

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, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

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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